Export  Tips  and  Trends  on  the  Global  Outdoor  Retail  Market       Q&A  with  David  Fiscus,  Director  of  the  U.S.  Commercial  Service  in  Utah    

   By  Linda  Abbruzzese  and  Curt  Cultice                                                                                                                               U.S.  Commercial  Service,  U.S.  Department  of  Commerce       As  one  of  the  largest  trade  shows  for  the  Outdoor  Sports  Equipment  and  Apparel  industry  in  the   world,  the  Outdoor  Retailer  Summer  Market  offers  an  excellent  opportunity  for  U.S.  firms  to   connect  with  potential  foreign  buyers.  At  the  show,  the  U.S.  Department  of  Commerce  has   recruited  12  international  buyer  delegations  with  more  than  100  buyers  from  around  the  world   to  meet  with  U.S.  exhibitors.  In  the  below  Q&A,  David  Fiscus,  International  Trade  Specialist  with   the  U.S.  Commercial  Service  in  Utah,  discusses  global  trends  in  the  outdoor  retail  sector.  Mr.   Fiscus  is  part  of  the  U.S.  Commercial  Service’s  worldwide  network  of  108  offices  across  the   United  States  and  in  U.S.  Embassies  and  Consulates  in  over  75  countries  that  help  U.S.   businesses  export.     Q:  Why  should  the  outdoor  retail  industry  look  at  exporting  or  expanding  into  new  markets?       Fiscus:    More  than  95  percent  of  the  world’s  consumers  are  outside  of  the  United  States.   Exporting  is  not  only  good  for  the  bottom  line,  but  helps  build  competitiveness  and  enables   firms  to  better  weather  changes  in  the  domestic  and  global  economy.  If  a  company  is  not   exporting,  it’s  just  like  leaving  money  on  the  table.  Moreover,  when  it  comes  to  exporting,   there’s  no  need  to  “go-­‐it-­‐alone.”  With  the  Internet,  improved  logistics  options  and  array  of   federal  government  export  resources,  exporting  is  more  viable  than  ever  for  even  smaller  U.S.   businesses.  Many  U.S.  businesses  have  yet  to  export,  and  among  all  U.S.  exporters,  58  percent   sell  to  only  one  foreign  market.  There  are  good  opportunities  to  expand  international  sales  such   as  those  in  the  outdoor  retail  sector.  Companies  in  the  outdoor  industry,  in  particular,  stand  to   benefit  from  selling  internationally,  as  they  can  mitigate  some  of  seasonality  inherent  to  the   industry.   Q:  How  can  the  Outdoor  Retailer  Summer  Market  help  U.S.  exporters?     Fiscus:    The  Outdoor  Retailer  Summer  Market  is  a  premier  annual  gathering  of  leading  and  up-­‐ and-­‐coming  outdoor  gear  and  apparel  brands,  as  well  as  industry  retailers  and  experts-­‐-­‐ affording  brands  an  opportunity  to  showcase  their  latest  offerings  to  the  trade.  Buyers  and   retailers  from  all  over  the  world  come  to  the  show  to  make  their  purchasing  decisions  for  the   coming  season.  For  U.S.  companies,  having  potential  buyers  from  around  the  world  at  a  single   venue  is  a  great  way  to  open  new  markets  without  leaving  the  United  States.    

At  the  show,  the  U.S.  Department  of  Commerce’s  (DOC)  International  Buyer  Program  has   recruited  international  buyer  delegations  from  12  countries.  These  delegations  represent  some   of  the  top  outdoor  retail  markets  for  U.S.  firms,  including  Canada,  Chile,  China,  Italy,  Mexico,   Australia,  Japan,  Colombia,  the  Philippines,  Malaysia      and  Thailand.  During  the  show,  U.S.   exhibitors  and  international  visitors  have  access  to  the  International  Trade  Center,  located  in   the  West  Entrance  Lobby,  adjacent  to  the  show  floor,  where  they  can  enjoy  private   conference  rooms,  complimentary  WiFi  access,  lounge  areas,  and  refreshments.  U.S.  DOC   Trade  Specialists  will  be  onsite  to  provide  matchmaking  assistance  and  export  trade  counseling   to  both  international  attendees  and  U.S.  exhibitors.     Q.  What  are  some  consumer  trends  in  the  outdoor  retail  industry?         Fiscus:    In  2015,  U.S.  companies  exported  more  than  $80  billion  in  backpacking  tents  and  sport   footwear  alone  to  world  markets,  in  addition  to  outdoor  apparel  exports.  The  United  States   also  dominates  the  backpacking  tents  and  sport  footwear  markets,  with  more  than  a  90  percent   marketshare  in  the  combined  top  30  market  destinations.                 Many  world  markets  are  seeing  a  large  growth  in  the  middle  class  with  increased  spending   power,  and  the  largest    overarching  global  trend  in  the  outdoor  space  is  the  notion  of  outdoor   lifestyle.  U.S.  manufacturers  that  have  historically  produced  technical  performance  gear,  for   example  rock  climbing  or  backpacking,  are  now  branching  out  to  include  a  broader  line  of   branded  products.  This  strategy  helps  target  a  more  casual,  urban  “nine  to  five”  audience   whose  outdoor  activities  revolve  around  weekends—and  a  lot  of  these  brands  are  doing  quite   well  in  this  market  segment,  which    continues  to  show  tremendous  potential  globally.  Show   organizers  have  since  dedicated  a  pavilion  called  “Venture  Out”  to  highlight  the  more  casual   consumer  outdoor  lifestyle.     One  growing  trend  in  the  industry  is  the  standup  paddleboard  segment;  just  ten  years  ago,   standup  paddle  boards  seemed  few  and  far  between.  Now  on  ample  display  at  this  show,   paddle  sports  have  really  gained  steam  in  the  U.S.  market.     Q:  What  about  trends  in  new  fabrics  and  applications?     Fiscus:    Increasing  numbers  of  retail  buyers,  manufacturers  and  designers  are  looking  at  new   fabrics  and  technologies  on  display.  Polar  Tech  and  other  leading  U.S.  brands  are  dedicating   much  effort  to  R&D  aimed  at  better  waterproofing  or  better  tensile  strength  to  minimize  or   prevent  fabric  ripping.  There  are  innovations  in  mountaineering  and  in  climbing  with  new   technical  goods,  including  wearable  technologies.  Buyers  at  the  show  have  unique   opportunities  to  assess  firsthand,  the  technical  applications  in  making  purchases.  

Q:      Regarding  the  retail  and  outdoor  retail  industry,  what  should  U.S.  exporters  understand   when  marketing  overseas?           Fiscus:    U.S.  businesses  should  always  become  familiar  with  their  competition  before  entering     a  particular    market.  The  need  for  flexibility  when  going  into  a  new  market  is  important  as  is  an   awareness  that  segmentation  and  sales  channels  might  be  different  than  in  the  United  States.   U.S.  firms  looking  to  build  brand  awareness  and  follow  from  the  ground  up  in  a  new  market   might  find  it  more  profitable  to  take  a  slower,  incremental  approach.  This  could  involve  finding   a  distribution  partner  to  help  build  brand  awareness  and  drive  the  product  in  the  channel,   rather  than  setting  up  a  physical  presence  from  the  outset.     It  is  also  important  to  assess  the  point  of  sale  drivers  in  your  desired  overseas  retail  target   markets  (e.g.  big  box,  specialty  retailer,  B2C  e-­‐commerce,  etc.).  The  United  States  has   numerous  specialty  retailers  focused  on  particular  sports  such  as  running,  mountains,  biking,   cycling  and  skiing.  However,  in  many  international  markets,  those  types  of  retailers  either  may   not  exist,  or  not  in  the  numbers  that  are  going  to  yield  substantial  export  sales.  The  department   store  model  is  still  one  of  the  most  common  presentation  platforms  for  outdoor  products  in   many  markets,  while  online;  B2C  sales  have  emerged  as  an  important  sales  channel  in  the   outdoor  industry  globally.  Also,  be  sure  to  look  at  opportunities  with  the  20  countries  with   which  the  United  States  has  Free  Trade  Agreements.  These  countries  offer  reduced  or   eliminated  barriers  for  U.S.  exporters  in  numerous  industry  sectors.   Q.  For  the  retail  and  outdoor  retail  industry,  are  there  specific  requirements  they  need  to   adhere  to  before  shipping  their  products  overseas?         Fiscus:    For  the  most  part,  there  aren’t  any  real  special  or  unique  considerations  for  shipping   products.  However,  U.S.  exporters  of  soft  goods  like  apparel-­‐type  products  or  footwear  should   be  aware  that  many  countries  have  marketing  and  labeling  requirements  to  show  content  and   origin  percentage  of  the  fabric  composition.  A  good  resource  for  this  information  is  the  U.S.   DOC’s    Office  of  Textiles  and  Apparel’s  website,  otexa.trade.gov.  Military  and  tactical  related   products  such  as  some  rugged  advanced  materials  for  training  or  night  vision  type  applications   might  have  a  dual  civilian-­‐military  use  that  could  require  export  licensing.   Q:    What  are  some  trends  in  the  perception  of  “USA”  made  outdoor  retail  apparel  and   accessories?             Fiscus:    „Made  in  USA“  is  king  in  this  industry.  Over  the  past  few  years  there  has  been  an  uptick   in  what  we  call  a  “Return  to  the  USA.“  Outdoor  brands  are  bringing  manufacturing  operations   either  in  whole  or  in  part  back  to  the  United  States  from  Asia  and  Latin  America.  These  firms   recognize  not  only  is  “Made  in  USA“  a  great  sales  and  marketing  point,  but  that  the  buying  cycle   allows  them  to  meet  demand  on  shorter  lead  times.  A  great  example  here  in  Utah  is  the  ski   industry.  Our  state  has  a  number  of  ski  brands  that  have  brought  manufacturing  back  to  the  

United  States  or  relatively  new,  high  performance  brands  that  have  established  manufacturing   here  from  the  outset.  This  is  not  only  to  levergae  the  marketing  premium  of  “Made  in  USA“,  but   also  because  they  can  prototype  a  new  design  in  the  morning  and  try  it  out  on  the  mountain   literally  that  afternoon.                                    

Key  resources  for  outdoor  retailers  looking  to  go  global   •   U.S.  Department  of  Commerce.  The  U.S.  Commercial  Service  has  offices  in  more  than   100  U.S.  cities  and  in  U.S.  Embassies  and  Consulates  in  over  75  countries.  Trade   professionals  provide  export  counseling,  market  intelligence,  business  matchmaking,   advocacy,  and  participation  in  trade  shows;  visit  www.export.gov.  The  Office  of  Textiles   and  Apparel  (OTEXA)  assists  businesses  with  fabrics,  components  and  CMT   sourcing,  strategic  alliances,  and  targeted  export  services,  including  the  Made  in  USA   Database;  visit  http://otexa.trade.gov/MadeinUSA.htm.  A  full  spectrum  of  information  on  U.S.   textiles  is  available  at  www.Otexa.trade.gov.    

•   Country  Commercial  Guides.  A  great  tool  for  U.S.  exporters  and  a  must  read  for  anyone   who  is  considering  a  particular  market.  These  guides,  updated  annually,  offer  the  latest   market  intelligence,  common  methods  of  payment  (which  in  the  retail  industry  can  be   quite  helpful),  and  information  on  trade  barriers  and  other  regulations  that  a  company   would  have  to  work  into  its  risk  matrix  in  looking  at  the  true  cost  of  doing  business  in  a   particular  market;  visit  export.gov/ccg.   •   The  Outdoor  Industry  Association.  With  a  website  www.outdoor.org,  the  organization   has  a  lot  of  publicly  available  research  information.  There  are  also  a  number  of  trade   publications,  including  “Inside  Outdoor,”  a  monthly  magazine  highlighting  industry   trends  and  tips  for  doing  business.     •   E-­‐Commerce.  There’s  growing  in  interest  internationally  from  the  Business-­‐to-­‐Consumer   (B2C)  side  with  individuals  hopping  online  or  ordering  items  from  an  outdoor  brand’s  e-­‐ commerce  site.  Growing  markets  for  this  platform  include  China  and  other  countries.   When  researching  the  outdoor  industry,  look  at  e-­‐commerce  penetration  rates  markets,   because  that  would  give  you  another  good  indicator  of  potential  demand.  The  U.S.   Commercial  Service’s  e-­‐Commerce  Innovation  Lab  offers  U.S.  companies  a  variety  of   applied  resources  on  global  B2C;  visit  export.gov/ecommerce.    

         

  U.S.  Department  of  Commerce  to  offer  Educational  Sessions  on  Textiles       Join  Analyst  Mary-­‐Lynn  Landgraf  as  she  presents  the  following  topics:     •   Thu,  Aug  4,  2016  -­‐  2:30  PM  to  3:15  PM   Revenue,  Textiles  and  Outdoor  Recreation:  The  Impact  of  Textiles  on  the  Outdoor   Recreation  Industry   Downtown  Marriott  City  Creek   75  South  West  Temple  (across  the  street  from  the  Convention  Center)   Salt  Lake  City  

   

•   Thu,  Aug  4,  2016  -­‐  4:00  PM  to  5:00  PM  

 

Current  Events  Fabrics  Wired  and  Geared  for  Performance  Success   Location:  Trend+Design  Center,  Booth  155,  Salt  Palace  Convention  Center            These  presentations  will  address  the  sweep  of  e-­‐textiles  across  the  spectrum  of   outdoor/recreational  clothing  and  gear.  What’s  hot,  what’s  not  and  trending  of  e-­‐textiles   into  sports  apparel  and  beyond.  Keeping  the  charge,  data  retrieval  and  monitoring   physiological;  events  are  part  of  the  everyday  scene.  What  will  be  the  next  quantum  leap  in   e-­‐textile  developments?  Join  us  for  updates,  trends  monitoring  and  a  peak  into  the  future   of  e-­‐textiles.      

  U.S. Commerce Department Offers Export Services at Outdoor Retailer Summer Market 2016 Once  again  this  year,  the  U.S.  Department  of  Commerce  will  be  present  and  ready  to  assist  U.S.   exhibitors  at  the  Outdoor  Retailer  Summer  Market,  August  3-­‐6.  During  the  event,  Commerce  will  offer   two  programs  to  assist  U.S.  exporters  and  international  buyers:  B2B  Matchmaking  and  Showtime   appointments.  As  part  of  Commerce’s  International  Buyer  Program,  U.S.  Commercial  Service  trade   professionals  will  be  scheduling  meetings  for  over  100  international  buyers  interested  in  meeting  with   U.S.  exhibitors  at  the  show.  The  Showtime  program  will  allow  U.S.  exhibitors  to  meet  one-­‐on-­‐one  with   CS  Delegation  Leaders  from  five  countries  including:  Canada,  Chile,  China,  Mexico  and  Thailand,  who   will  provide  counseling  on  marketing  opportunities  and  exporting  to  their  respective  countries.  To   schedule  B2B  Matchmaking  or  Showtime  appointments  please  contact  Warren  Anderson   ([email protected])  or  Anthony  Hill  ([email protected])  or  visit  the  International   Trade  Center  (ITC)  located  in  the  West  Entrance  Lobby,  adjacent  to  the  show  floor  during  the  show.