Apr 20, 2012
Author: Christina Raymond
The women’s market in action sports is highly competitive, and outside players are more of a reality and challenge than ever before
By Christina Raymond
It’s well accepted that the past few years have proven challenging for the action sports industry—retailers, distributors, manufacturers, every corner of the business. Bearing the brunt of the blame has been the infamous economic recession, which led to a decline in retail sales that ultimately trickled down to adversely affect profits for the entire industry.
Before the economy tanked back in 2008, action sports retailers throughout Canada began to notice an alarming trend in their sales, more specifically that the women’s streetwear category was experiencing disappointing sell-through. Later polarized by tighter consumer spending habits and reduced sales across the board, the plunging women’s category was cast aside to focus on overall sales and how best to deal with the biggest issue plaguing the industry. More recently, things are looking up with promising profit growth thanks to steadier retail sales throughout 2011. Yet, one thing has become clear: the once-heralded women’s market in action sports has yet to rebound, even with consumers feeling confident in spending once again. Now, women’s streetwear is facing its greatest challenge yet: the disappearance of the female consumer.
But exactly who is the female customer in the first place? How does she shop? What does she look for? While the buying behaviours of males have typically been cut and dry, it’s quite a bit more difficult to define the parameters of the female shopper.
Nina Marchewka, women’s streetwear buyer at Top of the World in Ottawa, Ont., says it’s a constant challenge to define her shop’s female customer, a similar and critical struggle many shops are facing in this category. “I couldn’t say who she is,” Marchewka says, “which is why it’s so hard. If I could put my finger on who the client was, then I could buy for her.”
The lack of a definable customer further demonstrates the state of what Marchewka says is going on in the fashion market at large. “There is no ‘one kind of female customer,’ and she doesn’t have any specific likes nor is she brand-loyal. So you can’t target her and figure out what to put in the girls’ section. Do you go basic, do you go fashion-forward, do you go core skate? It’s impossible because we don’t know who she is, so we’ve just chosen who we’re going to cater to and hope that she comes in.”
While it may be difficult for Marchewka to characterize Top of the World’s benchmark female customer, one thing is for certain: she’s seen a consistent decline in the number of those women coming through the doors over the past few years.
SBC Business has tracked this growing trend over the past three years in the results of the bi-annual retail survey conducted with over 100 of Canada’s core retailers. Notable data highlights a fairly drastic decrease in the reported percentage of male to female customers shopping in the stores. From the 2008 Winter Issue average of 60%/40% male to female, to the 2010 summer average of 82%/18% male to female.
Tina Guindon, women’s streetwear buyer at The Boardroom in Vancouver, B.C., says her shop’s female customer base has actually expanded over the past few years, which she attributes in part to the improved designs and fashionable offerings by the industry’s leading brands, as well as the geographic location of her shop being in an area that benefits from major tourism. “I would say our customers are an average age of 19 to 40, and they come from as far as the States, the [Fraser] Valley, and our usual city locals,” Guindon says. “Fashion, these days, really is all about the basic pieces mixed with a piece of flare, so it makes the trends very age-diverse.”
Unfortunately, foot traffic does not always translate into sales, and sales are the single variable by which success is gauged within a retail environment. Both The Boardroom and Top of the World have had to take measures in order to address the declining category. For Guindon, this has translated into buying budget cuts and smaller order sizes. “My budget has decreased, and we’ve been a little more cautious of the buys, but we’re having greater sell-through with higher margin than previous years. Women’s streetwear is a tough market, and everyone knows that. There is so much to choose from out there, so it’s my job to keep it fresh and up to par with today’s trends.”
This decline in budget allocation to the women’s category has also been underscored by the SBC Business retail survey in shops across the country. Over the last three years, 25 to 41 per cent of stores polled have continually reported decreased spending on women’s streetwear.
The sales decline in women’s streetwear has had a heavier impact on Top of the World, including a fairly substantial renovation that saw the store’s women’s section decrease drastically in real estate. The decision was made to expand the hardgoods area in the store, says Marchewka, as it’s carries greater profit. “When we redid the girls section, I would say we cut back the floor space allocated to girls clothing by approximately 40 per cent,” she says. “We also cut the purchasing budget for women’s streetwear by about 30 per cent. I’m trying to just do more rotating of stock in the smaller section.”
While it’s a generalization to say that women of all ages love to shop —and clothes shopping would top almost every women’s list—buying habits present truth to that claim. But as the shopping stride picks up and purse strings loosen in this post-recession climate, why is that women are choosing to stray from the store fronts of our industry? It wasn’t long ago that the industry was buzzing with talk of the burgeoning women’s market. In the early- to mid-2000s, women’s-specific products were touted as the fastest growing category. So, what’s changed?
Guindon and Marchewka share a similar sentiment regarding why women are choosing to shop elsewhere and where, exactly, the ‘elsewhere’ is. Both women say it boils down to brand loyalty, something the action sports industry not only thrives on but also depends on for success and growth. Yet, both women agree the outlook on that concept is bleak. Marchewka says she feels today’s female consumer has no loyalty to fashion brands, and, according to Guindon, the only allegiance she sees women showing in her store is to the non-endemic brands The Boardroom carries. “Sometimes, we’ll have customers looking for a specific brand we carry, such as Black Orchid denim, Cheap Monday and Blank Denim—brands that many skate shops might not carry,” Guindon says. “But most of the time, if they like an item that pops out and catches their eye, it doesn’t matter what the brand is.”
The advent and continued growth of vertical retail and so-called fast fashion has taken a major bite into the overall women’s fashion market, and the cash registers of both traditional retailers and action sports retailers alike are feeling the pinch. Stores like H&M, Zara’s and Forever 21, to name a few, are a new breed of fashion retailer that run on a specific premise: uncover the latest trends, quickly produce them as cheaply as possible, and have them on hangers in a matter of weeks. These retailers have the resources to turn around the next hot trend at an extremely low price point, often before the consumer is even aware that they want it, ultimately scooping traditional fashion channels on its release speed to market. In effect, these retailers are eliminating the need for the usual buying seasons and lead-time that both our industry and high fashion have always followed.
Still a relatively new force in Canada, Guindon says the retailers of fast, ever-changing fashion may be the place to find action sports’ former female customer spending money. “It’s always going to be hard with your H&Ms and Forever 21s,” she says, “I think it all depends on the age group. In their early twenties, for the most part, girls are more price conscious and want inexpensive fashion trends.”
For Marchewka, it’s two-fold: fast fashion not only seems to be attracting her former female customers with its inexpensive, disposable styles, but the store environments also employ an inviting atmosphere, creating a winning formula to draw women through the doors. “We’re losing our customers to fast fashion stores,” Marchewka says. “I really feel like girls don’t want to spend money just to quickly be over the trend. They want to buy something just for the weekend in a lot of cases, and don’t want to spend $100—they want to spend $30. Also, girls are really visual and they need the work done for them nowadays, especially the young ones. They want it well-merchandised and really spread out with repetition in sizing, like the way they do it at stores like H&M or Urban Outfitters.”
Unfortunately, for Top of the World, as with many core shops, the space to merchandise in this manner just doesn’t exist, nor does it seem like a realistic idea to be expanding the floor space allocated to women’s clothing when the category is performing poorly. “It’s like a catch 22,” Marchewka continues, “you need to have less stuff but represent it in twice as much space in order to make it easy for the girls—it’s a nightmare.”
There’s hardly a quick fix for the problem, yet both Guindon and Marchewka agree that hope isn’t lost for a resurgence in the women’s streetwear category. Both shops are putting various initiatives in place to tackle the issue and positively motivate sales and customer loyalty.
“We’re trying to develop better relationships, build a new customer base and work on loyalty because that’s what we had to bank on with women and men in the past: their loyalty to the core values of the core shop,” Marchewka says. “The younger generation doesn’t shop this way, so we’re trying to grab onto them to get that loyalty and build that sort of sense of family with them by offering the girls night we’ve been hosting as a means to reach out and regain some contacts and regulars, as well as build some new relationships.”
Top of the World’s girls night has been hosted on a quarterly basis for the past few years, Marchewka says, with each one having a special theme in conjunction with a streetwear brand. The store offers ladies a 30 per cent discount on all women’s clothing, shoes and accessories.
Likewise, Guindon and The Boardroom have made it a point to focus specifically on areas where fast-fashion retailers fall short. “In a time when the women’s market is tough, we have to step it up with customer service because customer service is not what you’re going to get when you go to H&M or Forever 21. Ladies want help when trying to find the perfect fit of denim, they want help putting together an outfit.”
Neither Guindon or Marchewka blame current product offerings as the explanation for struggling sales; both buyers say they’re confident that endemic brands are on-trend and, in some cases, far more fashion forward than the offerings of typical mall stores. Both women agree that the industry’s leading brands are doing a good job providing women with a unique and more exclusive take on styles so they’re less likely to find themselves in the same clothing as every other girl.
Brands like Nikita and Insight target the same female consumer that shops at both Top of the World and The Boardroom, says C4 Distribution marketing manager Scott Prunier, adding that both brands have a very clear definition of who she is. “We create clothing for a female consumer between the ages of 14-35, an active boardsport enthusiast with a keen interest and eye for fashion, music and social contexts revolving around art and subculture,” he says.
Given that retailers are the frontline of the industry, when they struggle, it affects all other facets of the business. According to Prunier, Nikita and Insight have not been immune to the current trends in women’s shopping behaviour. “The decline has been steady over the last few seasons, namely due to the increase in vertical retail competition entering the Canadian market and decreased end-consumer spending while we ride out the economic downturn,” he says, adding that it hasn’t been one type of account that has suffered more than another. “Across the board—from endemic action sports retailers to non-endemic sporting goods and fashion retailers, large and small.”
Prunier says one of the most significant goals of C4’s brands is a direct measure to combat fast fashion. “With retailers such as H&M, Forever 21, Zara and Joe Fresh taking significant market share, we’ve worked hard with our suppliers in order to align pricing with the current market dynamics. The women’s space is currently plagued by low-priced, low-quality quick-turn product.”
Efforts to maintain profitability of the brands within the core shops has been a great focus for C4 Distribution, rather than trying to open more or different types of accounts as a means to make up for losses. “Our focus has been tenfold towards our independent core skate and snow retailers; this channel needs to remain healthy and vibrant for our brands and industry to stay healthy over time.
“Skateboarding, snowboarding and surfing will continue to thrive and grow in active participants,” Prunier continues. “The last few years, the women’s component has sort of lost its way, in a sense. Go back in time to the cusp of the action sports explosion in the early 2000s... the women’s component was targeted to be the biggest growth category—and it was. We’ve just let ourselves be blindsided by emerging trends, an economic storm and changing consumer demands. All that said, girls will still ride and be interested in boardsports culture, we just need to make it fashionable again.”
Action sports goods and the products that come with the lifestyle that surrounds the culture have come a long way from their rudimentary roots, and women’s products are no different. “Women’s action sports product was very much a byproduct of men’s designs, tomboy in its approach, and often take-downs and colour-ups of men’s designs,” Prunier says. This couldn’t be farther from the truth today, he adds, noting that many of the industry’s brands are at the forefront of fashion and have broken down the boundaries of action sports.
There’s an obvious quality difference between brands like Nikita and Insight and the disposable clothing found in fast-fashion stores, but how do we create brand loyalty amongst women? Convince them to spend a little more money on our industry’s name brands? Prunier says it’s all in the story we tell. “Our industry is unique in a way no vertical retailer can copy,” he says. “We have amazing, creative people behind our brands, and each piece of product tells a story. We need to get back to storytelling and building brand belief systems that transcend just a commercial transaction or a commodity.”
With the right marketing focus, action sports lifestyle fashion can once again become a means by which women shape and display their identity, he explains. “By building compelling clothing design, intriguing promotional aesthetics and social brand platforms unique to our culture, we will be able to connect longer and deeper with our core end-consumers.”
If brands take on the challenge of capturing the attention of the female consumer through the dissemination of compelling stories and the other marketing initiatives, Prunier says retailers need to execute them in order to make this category resurgence successful. “Catering to a female audience is all about creating an experience. The environment needs to be clean, non-abrasive and comfortable for the client to try on many different looks. A knowledgeable staff and a well-merchandised shop floor need to complement this. “At the end of the day, customers are still buying, and I’ll go even as far as saying they’re spending even more, just redispersing their funds towards low-cost, high-volume fashion giving the impression they are getting more for their money.”
Roxy Reminds Us About the Junior Girls Category
The independent core retailers we spoke to—Vancouver’s The Boardroom and Ottawa’s Top of the World—told us know that they’ve abandoned the women’s junior market in their stores. Both shops pointed to the multitude of mall-based retail chains in Canada as the reason they no longer feel they can compete for the youngest of the action sports consumers. However, this doesn’t mean that the junior girls category hasn’t been experiencing exactly the same struggles as the overall women’s market we already examined. We spoke to Tracy Tomlinson, key accounts manager of Roxy Canada, to get an idea of how Roxy, a brand that really attracts and resonates in the junior market, is striving to maintain its leading status. According to Tomlinson, Roxy has not been immune to the decrease in female consumers the industry has witnessed.
“In the past two years, the juniors’ market has gone through an extremely rapid change,” says Tomlinson. “Girls have a massive range of choice when it comes to their spending now—from verticals, big box, your local grocery stores, online and even in-house PL brands—with our retail distribution in Canada.”
It’s been a challenge for Roxy to keep up with this ever-changing market and, similar to Insight and Nikita, Roxy has felt the effects. “The 2010 fiscal year was challenging, and we did have a decrease in sales. But now, with half of 2011 under our belts, our retailers are coming back with positive numbers in their pre-book, and the shift back to brands is beginning to be felt. So, it’s a collective optimism for 2011.”
Tomlinson says Roxy has ramped up its support for the sell-in and sell-through of the brand in all of its key retailers in an effort to grow sales. “Where the brand is being supported, we are investing fabulous marketing initiatives, staff incentives, consumer rewards and national increase in awareness for Roxy. Roxy has been quiet for some time on the marketing front, but we have an incredible marketing and PR team in place in the U.S. and Canada. Our product will be seen in every major U.S. and Canadian publication, bringing momentum and support to our retailers to help promote sales of Roxy.”
Tomlinson says it’s a very specific retail segment that has been struggling the most with the battle for the female consumer. “I think the biggest impact is mall-based retail, as they are most affected by fast fashion and having to compete with the early promotion cycle of verticals. Many Canadian accounts, though, have fought this by expansion to more doors or larger square footage per door, fully revamping and renovating existing doors and getting creative with staff/consumer incentive to drive sales at full margins,” she says.
Aside from the physical changes, some mall-based stores have made an effort to continually bring customers through their doors. Tomlinson says it’s true differentiation that will appeal to junior girls with a plethroa of retail options. “The key issue is not the location of the shop; we have incredible retail partners coast to coast located in malls and on main streets of cities and towns,” Tomlinson says. “The issue is for Roxy—and all of my fellow brands, such as Volcom, Billabong, O’Neill and Hurley—to be strong in their product mix, bring exciting brand imagery and have a unique point of view that big-box mall verticals cannot duplicate.”
Taking advantage of the unique story our industry can tell through its product lines, Tomlinson says, “We’ve re-grouped within Roxy to bring to the consumer what she expects from our brand. The best boardshorts, swimwear, dresses, sandals, beach pants and fleece. A brand cannot be all things to all retailers and consumers, and we are being true to the roots of our history by bringing authentic items to market in 2011. What Roxy is going to give the junior market is a fresh point of view and an authenticity that the vertical guys cannot copy. Our retailers have responded extremely well to this strategy.”
Tomlinson sees the brand and its retailers working in a partnership to successfully rebuild the girls category. She says some changes are necessary within retailers’ current product mix to help bring strength and attention back to action sports brands. “My competition has never been my own industry,” she says, “it’s the increased move toward cheap-and-cheerful fashion, private label within our current retail doors, and brands outside of our industry, like Bench, taking focus and real estate away from our lines.
“If we are collectively strong together in product mix, the end consumer is provided with an experience and good service when they are in the store. And if we, as brands, bring strong marketing to the table, this will help drive the female consumer into these doors, whether independent or mall-based.”