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.