Late last year, technical ski apparel company Trew Gear opened a brick-and-mortar shop on a buzzy section of Southeast Division Street in Portland, Oregon. The striking black-and-white exterior attracts walk-in customers headed to nearby shops and restaurants. However, a quick peep inside shows that it is an unconventional retail space.
As much an office and storage space as it is a showroom, Trew founder and lead designer Chris Pew said, “It’s more of a workspace and hub for us to gather. Once you start opening retail stores, you lose the advantage of being able to put all your overhead into your product.”
Trew is just one of a growing number of outdoor gear manufacturers who opt to sell their gear directly to their customers through their own website or store, rather than through a retailer like REI or Backcountry.com.
Internet-savvy customers are moving towards the direct-to-consumer model.
Direct-to-consumer isn’t a new business model, particularly for outdoor gear manufacturers. Many large companies—Patagonia, for example—have some version of the same origin myth: An entrepreneurial founder puts two nickels together and begins selling pitons or skis to friends out of the trunk of a car.
However, more and more smaller manufacturers are betting that the lean-and-mean business model can work just as well for them. And Internet-savvy customers, accustomed to the convenience of online shopping and trusting their own research over the recommendations of a pimply kid in a vest, are proving them right to take the bet.
Why go direct?
As Pew pointed out, the most obvious advantage of moving to a direct-to-consumer model is being able to offer your customer a better deal. The traditional retail model comes with many built-in costs: For example, renting, staffing or stocking a brick-and-mortar with gear that may just end up steeply discounted; hiring sales representatives; or purchasing booth space at trade shows to attract said sales reps or retail buyers. Without a retail markup, products are much cheaper.
Many companies, however, choose to turn around and invest those savings into improving their product. Companies like Trew and KUIU, a manufacturer of high-end backcountry hunting gear, source innovative materials, offering their customers premium products at a not-so-premium price points.
“Based on the quality of the materials we use, we’re able to sell a product for $175 that would be $300 with retail markup,” said Jason Hairston, KUIU’s founder. One of the materials that both companies use is NuYarn, a fabric made by a New Zealand-based company that drafts soft, lightweight and absorbent merino wool around a nylon core. The material is stronger, lighter, stretchier and more durable than other merino wool fabrics—and if they sold in a retail model, neither manufacturer could afford to sell it at the price point that they do.
Henry Shires, founder of Tarptent, which makes lightweight, durable, and easy-to-assemble outdoor shelters, also chose to invest the savings from the direct-to-consumer model—not only in fabrics, but in keeping Tarptent an American-manufactured product. In Tarptent’s case, Shires prefers to pay the premium for American manufacturing rather than pay retail markup.
“I personally feel good about keeping jobs in the U.S.,” said Shires. “We have better control over manufacturing when things are made here. If there’s a problem, I can get on a plane and be at the factory in a few hours.”
A clearer message
With a direct-to-consumer model, you not only have more control over your product’s manufacturing process—you have more control over your product’s story. Of course, customers wouldn’t be seeking out that story without the increasing popularity of online shopping through online retailers like Amazon or Zappos. Both sites allow customers to research different options, and get used to the idea of dropping large chunks of cash online.
When selling to a retailer, a manufacturer must convince a number of different people before the product even gets introduced to the customer. Jeff Popp, founder of MHM Gear, likened the process to playing a game of telephone. “First you have to find a good sales rep,” Popp said. “If you’re lucky enough to find a good rep, then you have to hope that the kids on the retail floor sell the bag effectively. It’s a losing battle to get the message you want across.”
Among other features, MHM’s packs feature a Snake-Loader zipper—an S-shaped zipper that allows the owner to lay the pack entirely flat to organize gear, or to access any panel in the pack at any time. But in the process of explaining the bag’s features from sales rep to retailer to customer, a lot of information gets lost along the way.
Many sales reps and retailers are not necessarily interested in taking a chance on younger and newer brands. Cyrus Schenck is the founder of Renoun, which manufactures skis that feature what Schenk calls Hyper Damping Technology (HDT). Depending on the snow conditions, the ski can function as either a firm or a soft ski due to a polymer that actually becomes firmer as the vibrations from rough conditions increase. But the ski’s innovation is not readily visible to a casual shopper. Or retailer, for that matter.
“Before we opened the website, we started pitching shops,” Schenck said. “There are 1600 skis on the market. ‘Who are you, my customer doesn’t know you, why would I ever carry your ski.’ It’s a lot easier to teach a customer about HDT, who is comfortable with buying a refrigerator from Amazon, than it is with legacy shops who’ve been using the same system for years.”
In other words, it is much easier to educate your customers via your own online ecosystem—an informative website, populated by customers who read your blog and interact with you on social media accounts—than it is through a series of possibly less-than-invested salespeople and reps.
“Short of actually being in a tent, we’ve tried to give customers a sense of the space.”
“It’s shocking to me how few people have chosen to utilize the technology we have,” Shires said, referring to the Internet. “Tents are difficult. You can’t pull it off a rack and set it up in the store. [On the website,] we put lifesize models in 3D animations. Short of actually being in a tent, we’ve tried to give customers a sense of the space.”
Hairston cited KUIU’s blog, which he started over eighteen months before he launched the brand as a way to document the search for fabric and materials, as one of the main drivers of KUIU’s nearly instant popularity—they did nearly a half-million in sales on the first day that the website was open for business. “I took the time to educate the customer on fabric, materials and design, what other companies weren’t telling you about versus what I was choosing,” Hairston said.
The customer connection
And of course, that goes both ways. Even as Hairston kept his customers updated on his processes, he was able to get feedback on design—whether they preferred down or synthetic insulation, hoods or no hoods on jackets. “What I’ve learned from direct-to-consumer is that a lot of it is giving the customer a voice and building trust in what we do,” Hairston said. “Any brand that sells to retail doesn’t know how to reach back to [the customer] to understand their purchase. That’s the lifeblood of our company.”
Getting instant feedback from customers, without being shackled to a retailer’s restocking cycle, allows designers to constantly improve the product line. “People interact with me,” Pew said. “In a retail store, people would just buy another jacket and we wouldn’t know why… We have customers who send me detailed 500-word reviews. You get ten or fifteen customers like that, it’s easy to recognize patterns of what is or isn’t working.”
And like gearheads all over the country—whether they’re in a retail shop, factory or out in the woods—many small manufacturers find that most of their job satisfaction comes from just surrounding themselves with people who have similar passions.
“Everything is a trade-off. A lot of the time, business is about deciding what not to do than about what to do,” said Shires. “If it were a necessity [to go retail], I would want out of the business. It just becomes about unit volume sales. My greatest love in life is hiking and being outside, and talking with customers every day is a big part of why I like to do what I do.”