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| skategeezer |
 Posted: Fri Dec 14, 2007 10:04 am |
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Joined: 03 Jul 2003
Posts: 1227
Location: Toronto
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from my silverfish blog...
Just A Technical Glitch�or A Vicious Circle?
Transworld Business Magazine originally covered the story on blanks in 2006. In the fall of that year, a decision was made to develop a booklet to counterbalance the impact of blanks and shop decks. At the beginning of 2007 there was a tremendous uproar as a result of the booklet entitled �Industry Under Fire,� the argument set forth was that if shops and consumers continued to purchase blank decks and don�t support pro decks, then skateboarding would die. (there would be no more pros, no more magazines, no more dvd�s). The backlash was severe from both shops and skaters. People were incensed by the hypocrisy and sheer arrogance of the industry�s position. Among the highlights of the backlash: skaters were incensed at the World Industries ad chastising skaters for buying blanks and the world without pros website got parodied into a world without ceos. As predicted, the issue burned red-hot for a brief period and slowly petered out. Then it was back to business as usual. Well, maybe not so usual. Skate retailers realized that skaters would speak up for their right to do business however they saw fit. Blanks or pro models � what was important was the choice to sell both, if necessary.
So now we come to another piece in Transworld that in many ways is even more contentious than the �war on blanks.� Recently Transworld reported that Quiksilver�s Roxy division had set up on-line to go direct to consumers. This is not something new. What is new was their decision to remove any affiliates from their site. At the Quiksilver, Burton and Billabong sites, if you want to buy something, you are automatically linked to a number of shops (ie K-Five, Val Surf, Swell) who will sell to you direct. It is worth noting that at the Burton site, you have the choice whether you want to order from direct from Burton. Again, the crucial word here is choice. If you want to order direct, you can. If you prefer to deal with an online shop you already have bought from before, then it�s your prerogative.
When Marty Samuels, President of Quiksilver, Americas Region was asked about the absence of the affiliates, his response was telling:
How have your online affiliates responded so far?
�Unfortunately we had a little technical glitch when we came online and the affiliate links were not accessible, but that was never our intent and when we went to talk to our guys we told them that and we�re fixing that. Certainly we will not go live with the Quiksilver piece until we have that nailed. We still want to have the affiliate programs. I�ve looked at company�s like Burton and Patagonia that have been at it longer and I think they have some interesting things they�re doing to make it beneficial to retailers as well. We�re looking at those things, and not just those things. We�re looking into some other ways to do things that are positive.�
Well, it�s been over 8 weeks since the technical glitch appeared and the affiliates are still nowhere to be seen on the site. From my experience, a technical glitch is a page not loading fast enough or flash not working correctly. Removing your entire affiliate program seems like a pretty big �technical glitch.� What it seems like to me is that this an effort to cut out those folks who have helped build your brand.
Of course, what�s really driving this is money, pure and simple. Roxy is not a difficult brand to find and they spend millions on marketing. If you live anywhere in the Greater Los Angeles Area, there are over 35 places to buy Roxy. As Quik is a public company with revenues of a billion plus dollars, it�s all about getting the most stuff out there, the most profitable way possible. Again, I am not na�ve to think that companies should not go direct. If you can�t get the stuff you want from a local retailer, then you sometimes have no choice. But if someone is already on-line, why cut out the affiliates? This seems like a slap in the face to the very people who got you to where you are now. I consider this the thin edge of the wedge and it is a very worrisome trend indeed.
I originally wanted to call this piece �Phoenix�s Still Get Burned� because I am amazed at the resilience of the independent skate and surf retailers. They have been bullied for carrying products like blanks and shop decks. They have seen a huge amount of their business go to big box shops and chains like Zumiez and Pac Sun and yet they remain committed to servicing their customers and keeping the magic alive. Yes, distribution plays a key part in how these brands are marketed. I am not pleased to see the action sports industry become just another commodity driven business run by beancounters, devoid of soul. Independent shops are the lifeblood of the industry because they take chances on new brands. They are hothouses of new ideas. But don�t take my words for it, look what Marty said in the same interview; �without the core shops we�ve got nothing.�
So, why screw again with a formula that works? Why mess up your relationships with the very people who have helped you succeed? Well, it�s like that old chestnut: �it�s nothing personal, it�s just business. I sense however, Quiksilver might regret this move and that a backlash is brewing. Tom Martin of Val Surf (the world�s first skate shop) was somewhat surprised by their actions. In his interview with Transworld he says: �one day we noticed that our affiliate traffic took a nose dive. So we went to roxy.com and found that customers could just buy straight from their site� many mouths dropped as we realized that our strongest affiliate traffic driver had cut us out of the loop without warning. They had told us that they had a new site in works a few months before, but there was no mention of selling direct.� Ouch and double ouch!
Like many retailers, Val Surf is pissed, but they are also realistic. As Tom notes: �they cut out the retailer. Plain and simple. Everyone knows that the future of retail is going to involve ecommerce more and more (in all industries, not just our own) � it�s just inevitable. And now we have a major vendor putting in motion a trend that will undoubtedly have vendors directly controlling a large fraction of retail down the road. And with the margins they�ll be making by selling direct, they�re just going to have more and more money to throw at it, making it even that much more difficult for a retailer to survive.�
He continues: �it�s about the biggest kick in the teeth they could give us. I think a lot of shop owners are still blind as to how much this is going to affect them in the years to come. The more digital the world goes, the more even the brick and mortar stores are going to be hurt by vendors selling direct. If someone can go straight to a vendor�s site and get everything they want shipped right to their door with no shipping and no tax (in some cases, depending on the state the vendor�s located), why come to us? After all, if a customer is looking to buy Roxy, and they type that into any search engine, who do you think is going to get that traffic? And thus the sale? Any vendor that goes this route is looking the corner the future market, plain and simple. From their perspective, it�s easy to see why they�re doing it. They�ll obviously make serious bank. But from a broad economic view, this trend (and I�m talking beyond the scope of our industry) will only squeeze out retailers� vendors will get bigger� more and more shops will close their doors� make the rich richer, and the poor poorer. Back to Ramen noodles from Costco.�
I think a number of skaters can identify with the plight of independent shops. Tom provides a detailed scenario of what is happening out there. To paraphrase it: as big vendors move towards selling direct and opening up their own shops, it squeezes out the sales that the core shops rely on to keep the lights on. The truth is that the smaller up and coming brands don�t bring in the sales the way the big brands do.
So, what is basically described as a technical glitch, is in fact something far greater. It�s a monumental shift in the way business is conducted. It was not surprising to read how annoyed Val Surf is with having a Burton/CI superstore located near his main shop. He senses something that many folks are starting to realize: Vendors will make serious bank online with their extremely high profit margins and low overhead. In turn that money will also fuel more vendor brick and mortar stores. It will become a vicious circle.� |
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| auragreg |
| Posted: Fri Dec 14, 2007 1:48 pm |
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Joined: 31 Aug 2004
Posts: 2382
Location: Highland, Michigan, USA, Earth
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what really sucks is that all of these big companies use the small shops to get big, and then once the big co's have their footing in the market, ditch the small shops who helped em.
Loyalty is gone.
"It's only business" is a cheap cop out. |
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| skategeezer |
| Posted: Fri Dec 14, 2007 1:51 pm |
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Joined: 03 Jul 2003
Posts: 1227
Location: Toronto
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Greg
do me a favor, and get this out to your friends
if enough core shops say STOP THE MADNESS
you might be surprised what could happen
not many people want to take on a billion dollar corporation...
but i don't take any advertising from Roxy...
you and your network of indy shops do have the power ...but i admit, it's very hard to deal with brands that just keep using you and then treat you like shit...twisting in the wind. |
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| motorpsycho67 |
| Posted: Fri Dec 14, 2007 3:01 pm |
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Joined: 19 Sep 2007
Posts: 18129
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I'm guessing that if all the retailers boycott Quicksilver, it'll put a dent in their bottom line. That should give Mr. Quick cause to reflect on his poor judgement.
Speaking for myself, I prefer to hold something in my hand before buying it. With hardgoods mostly. I wish there was a retailer near me that carried a good amount of DH/Speedboard/Slalom goods. I live in LA, so you'd think there would be. The best I can hope for is a few carving completes. With clothing, not such a big deal if you're familiar with the product. Then again, I'm old. Maybe the kids are fine with ecommerce. |
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| Cappy |
| Posted: Fri Dec 14, 2007 3:20 pm |
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Joined: 13 Sep 2005
Posts: 11580
Location: Cloud cuckoo land
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skategeezer wrote: ... Yes, distribution plays a key part in how these brands are marketed. ..
Of course, because you can bundle orders. But you have a middle man there, and there, and there, and there...(and dubious conditions)
Normally with the weak dollar, the imported stuff must be go like shit here now - but you look at what they cost (regardless if hard or softgoods) and nothing has changed! Then you wonder, were did all that money go? With the current advantage, small shops could sell alot more cheaper and small brands could sell alot more (maybe they are, but the stuff fills up a warehouse somewhere in between the chain, to keep the market price "stable").
All this "action sports industry" fuckers are involved with alot of softgood companies, those who cry the most, have the most to loose! Do you see the small brands cry on the net? The small independent shop owners? No? And that�s why? Because they are the heart of skateboarding!
All the people, sitting behind a desk and cashing in, have no clue. They should rather think about, that a small skateshop today "use" some stuff, only to pay the bills. If there is no support over the shop, you mostly are left with the poser market. And that�s fine! Quiksilver, Burton and Billabong, bwahaha, no kid wears that shit here. Might be a USA thing only, however if some of the middle man get cut out, this probably means, the smaller brands coud sell alot more in europe.
However, thanks for the laugh Transworld, as usual! |
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| brianzig |
| Posted: Sat Dec 15, 2007 9:49 am |
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Joined: 25 Aug 2006
Posts: 342
Location: South Carolina
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Quote: If there is no support over the shop, you mostly are left with the poser market. And that�s fine! Quiksilver, Burton and Billabong, bwahaha, no kid wears that shit here.
True. Those brands have already moved into "poser" territory. You can buy those brands in department stores and discount stores. I have a few Burton shirts on the clearance rack at $6 and still can't sell them. And Quicksilver, Billabong.....ha. I would lose all credibility selling that here. No way. Leave those brands to the rest of the sheep that go to PacSun. I actually tell my reps...if Pacsun has it I don't want it.
Now, on the whole issue of going direct. I've been telling my employees for a long time now....online is the future. At least for our shop. We have two online stores in development with the first about to go live in the next month. One is just an extension of our b&m shop with about 10,000 items but the other is a specialty shop zeroing in on a very specific part of the industry. Our eBay sales already help supplement our bottom line. Slow day....post some auctions. They all know the drill. So that being said, if the "core" brands started bypassing us and going direct, it would pretty much leave us dead in the water online. That's part of the reasoning behind the development of the specialty site. It will be more resilient against that type of scenario.
But...the independent shops still have a power the big guys can't handle...we are in direct contact with the end consumer everyday. And not to sound big headed or narcissistic but what we say or do in the shop can help develop or degrade a brand. World Industries....after they starting showing up at Dicks Sporting Goods, we ceased stocking anything by them. My own little stick it to the man. When kids came in and asked for it (usually noobs) we would tell them exactly where to get them. "World Industries...go to Dicks. We don't carry that kind of a brand here. But we do carry brand XXXXX and we love them. And we can get it put together for you at the same price. We ride XXXX and can highly recommend them". What do you think they end up doing? I'll tell you, they don't drive to Dicks. They aren't riding a World Industries, no longer think they are cool, and a "core" brand gets a board sale and some cool factor. I'm sure the same thing happens in shops everywhere. At least the good ones. It's about the only real power we still hold in this crazy industry. Our direct contact with the end consumer. |
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| slob-air |
| Posted: Sat Dec 15, 2007 11:46 am |
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Site Admin
Joined: 27 Oct 2001
Posts: 63453
Location: S&B HQ
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Roxy is a girl focussed brand. More than 70% of female skaters shop on line. The reason, they don't like the treatment they get in skateshops.
Any other company and there's an issue, but Roxy? Not really a catalizing effect. |
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| skategeezer |
| Posted: Sat Dec 15, 2007 12:14 pm |
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Joined: 03 Jul 2003
Posts: 1227
Location: Toronto
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you missed the issue, Slob
the issue is not on-line...the issue is cutting OUT the affiliates on line.
on-line will continue to grow, that's for sure, but it should grow with the shops that have helped the brands grow...or at least give customers a choice...don't cut out the affiliates 100%.
Re-read what Val Surf talked about...their affiliate traffic from Roxy vanished. |
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| yoyo |
| Posted: Sat Dec 15, 2007 12:41 pm |
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ORDER OF THE SKULL
Joined: 27 Apr 2005
Posts: 2228
Location: Germany
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Basically they are doing the 'same' thing with the distributors who built up the brands they now own. Just talked to a buddy the other day, and he told me that Quiksilver will handle the distribution to dealers directly from France instead of Germany. If it's a good thing; time will tell. They have no connection to the German market, but who cares.......
I just know from Lib Tech snowboards, which they own too, that they are looking for a distro in Germany again after ditching the previous one. Very strange business principles, but it seems to be common these days.
The folks / shops who built up the brands are only needed to make it big for the common market, then they are not needed any longer.
How can the 'core shops' survive.......??? |
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| skategeezer |
| Posted: Sat Dec 15, 2007 12:46 pm |
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Joined: 03 Jul 2003
Posts: 1227
Location: Toronto
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funny no one seems bring up the classic case study of burning the folks who made ya:
AIRWALK.... |
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