Riding Out the Rough Spots - Ski Industry Adapts to Tight Economy
On Snow Expo may be "young" compared with other trade shows in the ski industry, but it has already become a popular and important part of the Eastern sales circuit. "Expo is well received by the reps and the retail people," said Jim Wilfong of Atomic Skis. "People from as far away as Washington, DC, called me saying they planned to attend. It definitely provides a good opportunity for people in the industry to get together." Tom Mahoney of Look Sports, Inc., agreed. "Attendance at Expo has been very good," he noted, "despite the lack of what-do-you-call-it. . .snow."
Wilfong, Mahoney and hundreds of other ski industry representatives from 260 different product lines spent the week of February 23rd through the 27th in North Conway at the second annual On Snow Expo trade show. Although Mother Nature didn't cooperate until mid-week, enthusiasm for the show and the industry as a whole more than made up for the weather's shortcomings. At the exhibitor booths inside the Mt Cranmore Tennis Club, in the sales writing rooms at the Red Jacket, and on the slopes of Mt Cranmore the action was brisk and friendly.
Duncan Langdon, Jr., Director of the Eastern Ski Reps Association and the New England Ski Reps Association, pointed out that Expo has become a complete show. "In the first year, Expo's purpose was for reps to show new lines of equipment," Langdon said. "But we found to our amazement that retail buyers were willing to put orders on paper. Now Expo offers people the chance to see, test and buy new equipment. Some clothing reps have had sales appointments for the entire week of the show."
In spite of the past two winters' less-than-ideal ski conditions, most reps believe that the industry has fared better than expected, all things considered. Tom Mahoney characterized this year's early season buying as "relatively strong" and rep Steve Reeder of Bonna, Alpha and Splitken cross country gear noted that business was healthy. "But it has been tough for cross-country sales in the last two years," Reeder explained. "We're dependent on the natural snow to bring people in. We can't throw a few feet of the fake stuff on the ground for our skiers."
While current industry trends indicate a revived year for skiing, no one denies that ski manufacturers and reps have made adjustments over the past three years. As an example of this change, Reeder recalled that 96 separate lines of skis were on display at the Ski Industry of America's 1978 Las Vagas Trade Show, traditionally the largest show of its kind in the country. Last year, only 50 lines were displayed. At the same time, annual sales of skis dropped from 1.4 million pairs four years ago. to approximately 750-700,000 this year. Inflation, the cost of travel, a declining number of new skiers and poor winters, all combined to hurt the industry. "In a way we're experiencing a 'weeding out' period," Reeder added. "Those manufacturers having something well-made to offer - whether it's costly or inexpensive - will remain. Those who don't, won't."
The changing conditions of the economy have also altered the relationship between reps and retailers over the past few years. "Each individual rep has to readjust his attitude in relation to each shop's needs and current inventory," Langdon explained. "He has to work with the retailer to find out what he needs rather than focusing on selling what he has." This attitude, in turn, is mirrored in the trend toward smaller and more frequent purchases by retailers.
Cy Seibert of Lange USA and Pre Ski believed that these changes will become the rule rather than the exception in the years ahead. "Now more retailers opt to buy less and re-order", Seibert said. "Instead of ordering 300 pairs of boots at once," Seibert said, "they order half that number, wait and see how they sell, then order more as they need them." Aside from caution over what winter will bring and the pressures of inflation, Seibert explained that many retailers can't afford large orders because interest rates are so high.
Echoing Seibert's views,Jim Wilfong told how the new rep-retailer arrangement would work, "The new mind-set of the retailers is to share the financial liability with the manufacturer," he stated. "Retailers are less and less willing to assume the full cost of ordering all their equipment at once, so the ski industry is going more to 90-day stock orders." In the past, retailers followed a standard pattern of ordering winter gear in spring and summer. City shops were expected to pay for their purchases by December 10th, and rural shops - being farther from the buyer's market - by January 10th. While not all manufacturers have adopted this new 90-day system, Atomic and others have found it works effectively. "Now retailers are buying just what they project they'll need and paying within 90 days," Wilfong continued. "Then they'll reorder additional stock as the season progresses to fill in their needs, and they'll pay for these orders within 60 days. Cash flow problems and inflation make this a more efficient way of doing business."
While most reps agreed that retailers were buying more products this year - in part as a result of cautious purchases last season - and most also agreed that skiing's future appeared solid, they expressed strong interest in attracting new, younger skiers to the sport. Suggestions for ways to best accomplish this varied from rep to rep, but the need for action is clear to all involved. "One of the problems in the ski industry today is that we're not attracting as many new skiers as we were a decade ago," Langdon added, "and this is reflected in the number of ski companies which show a profit from ski equipment and ski clothing lines.
To solve this problem in cross country skiing, Steve Reeder feels that more effort should be made to promote and carry out ski-demonstration days and instruction clinics. "Working in cooperation with shops and ski touring centers to have demo-days is an important way to bring people into the sport," he pointed out. "The sport has tried this to an extent, but it needs to work harder. Demo-days reach Joe Consumer, put him on a pair of skis and give him a shot at the trails. If people don't realize what it's all about, they won't try the sport."
Others suggest that the ski industry use television to draw more people to the slopes. Cy Seibert believes that if it worked for other products, it can work skiing. "National advertising sells cars, Comet, Windex and Babo," he said, "we should try it too." Since young people watch a lot of television, and the ski industry is trying to appeal to them, television would be an effective tool. "When you want to promote something, put it on the tube," he added.
In part, Jim Wilfong favors using television to sell skiing, but he sees it as part of a larger, industry-wide effort which should be undertaken. Calling his comparison of the Florida Orange growers with the national ski industry "rather abstract," he still believes there's a lesson to be learned in their example. "They were independent growers who formed an organization and campaigned together to promote OJ," he explained. "Now you have people drinking their product 'round the clock.' If we could unite the different groups concerned with the sport of skiing - everyone from manufacturers to reps to retailers to the airlines to restaurant and lodging people to the area owners - then we'd be much more effective in promoting skiing as a sport."
Specifically, Wilfong favors a television and radio campaign aimed at urban areas like Boston, New York, Philadelphia and Washington. "We need to show people having a good time on the slopes," he said. "We need to promote the fun of skiing - the exhilaration of the sport. It's a feeling you can't get from any other activity." Wilfong argues that ski magazines convince those people who are already convinced, while radio and television reach those who don't know what skiing is.
The newly appointed executive director of Ski Industries America, Dave Ingemie, feels more should be done to attract new skiers, but he believes that television is less efficient than other methods. "Television sounds like a good idea," Ingemie said, "but at the moment it's cost ineffective. Only 5% of the population skis and it's hard to find a television show which reaches that 5%." In addition, Ingemie pointed out that studies have demonstrated that showing skiing on television - like showing tennis- hasn't proved to be an effective method of bringing people to the sport. Television may become effective in the future, but for now Ingemie favors direct mail, radio advertising, personal presentation and demos as a way to increase the numbers of skiers.
In any case, Ingemie is confident that the ski industry will weather whatever ups and downs nature provides. "We've had a couple of bad years, but it's nothing that a little snow won't cure. The social values of Americans are changing and they're changing to our benefit," he noted. "However, marketing is the key to long-term health, and we need to spend more money promoting skiing and creating a new market."
And what about Expo's future? As Ingemie said: "We're in a free market. If the need is there - as it seems to be - then the show will continue."
Duncan Langdon offered a similar assessment: Expo started off as a New England show, but we found people came from as far away as New Jersey, New York and Virginia and we feel that it can be a totally Eastern show in the future. Still, this show is judged on its merits each year.
"At this time, North Conway is the only area that can house this type of show, but I can't overstate the influence that the Chamber of Commerce and the Valley people have had in making this show a success. Special credit should go to Wally Campbell and Mike Hickey for their efforts. People have gone out of their way to make it all work."