by Jason Daley | photograph Lance Koudele
Back in the day, you walked into Randy’s gear shop and if all he had was a blood-spattered JanSport exo-frame, by god, you bought it. Now, it seems you can jiggle your smartphone and have your next $10,000 cross-bike delivered to your tinyhome. In recent years, outdoor brands like Black Diamond, K2, and Trek, plus dozens of upstarts, have begun rolling out direct-to-consumer (DTC) retailing, meaning they’ll sell their gear online or through catalogs—bypassing Randy.
It’s not just that Millennials are more apt to buy gear online, according to some, DTC represents a fundamental shift in how goods are marketed. “Specialty retailers are struggling,”says Adam Lewis of Portland-based Foghorn Labs, which consults with gear companies about DTC, “and my clients want more control over their business.”
Cloudveil founder Stephen Sullivan is the perfect example. After his experience with Cloudveil, which utilized traditional retail channels, he started fresh with DTC brand Stio in 2011. Stio runs two company-owned stores in Jackson, Wyoming, and Chicago, and to date doesn’t sell its wares in retail shops that don’t say Stio out front. “With Cloudveil, we were the fourth or fifth brand most shops carried,” he says. “It’s hard to control your brand experience when you’re not top dog in a store.”
More advantages of DTC? No spendy trade shows, fewer reps, and a better handle on pricing. “Wholesale is death by a thousand cuts,” says Tripp Frey, founder of the Hood River clothing company Trew, which went DTC last year. “You have to make compromises in products to keep prices low. But by selling to the consumer directly, we can increase quality and sell for less.”
Traditionally, DTC has worked best with items like sunglasses, bike tires, and fleece. The challenge lies with hard-to-fit items. A pair of shorts may well be a commodity, but a trail running shoe needs to be tried on. “I think we’ll always need experts who can properly fit a ski boot,” says Greg Hoffmann, founder of Vail’s Ski Boot Fitting, Inc.
“DTC is putting a lot of people out of business and making retailers feel nervous,” says Wes Allen, president of the specialty retailer group Grassroots Outdoor Alliance. Allen is fine with emerging brands selling direct, but sees established brands undercutting outdoor retailers for short-term gain. “Many consumers discover their favorite brands in cool little outdoor stores, not online.”
Still, many brands feel compelled to try to capitalize on DTC. Last year, Trek launched Trek Connect, which lets buyers order a bike online and pick it up at an authorized dealer. “The whole world is moving to the Internet, and if you drag your feet, you fail,” says Fred Clements of the National Bicycle Dealers Association. “Consumers are in charge and will guide the industry. If they start complaining that they want bikes shipped to their homes, then that will happen.”
From our Early Summer 2016 issue.