Dealers Focus On Growth, Adjust To
“New Normal” For 2014.
It’s little secret independent retailers face many challenges today. Competing with big box and online stores, adjusting from the impact of 2013’s unprecedented buying frenzy and subsequent ammo shortage and facing the “New Normal” represent just a few of the difficulties confronting dealers. Add to these the mystery of how events in 2014 and even 2015 will impact sales trends and, in short, dealers can only be certain of uncertainty.
Miles Hall, founder and president of H&H Shooting Sports Complex in Oklahoma City, Okla., recently sat down with Shooting Industry to outlay his projections for 2014 — including potential difficulties dealers will face. He identified two primary difficulties confronting dealers today: the availability of ammo and interacting with the new wave of consumers.
Interacting with your customer provides teaching moments and opens a line of communication
between you and your customer. Richard Sprague, president of Sprague’s Sports in Yuma, Ariz.,
understands the value of connecting with customers. He cofounded the first P-20 group.
Ammo To Attract Customers
The widespread ammunition shortage in 2013 left dealers scrambling to keep up with the unprecedented demand. Ammunition manufacturers report working around the clock and adding personnel and new equipment in an effort to increase production, but this still didn’t meet the voracious demand.
After the initial buying frenzy, what’s being dubbed as a “New Normal” settled in, which brought its own set of questions: How long will the ammo shortage last? How much inventory should a dealer maintain?
Hall recommends dealers focus on maintaining a healthy inventory of popular calibers like .22 LR, 9mm and .223.
“The ability to get ammo represents a big concern. Today’s shooters are looking to be entertained. We’re in the business of entertaining; customers want to have a good time being social with friends while at the range. If you don’t have ammo for them to shoot, that’s a problem and they’ll move on to be entertained by something else,” Hall said.
The ammo shortage impacted new consumers’ views of the industry, according to Hall. He notes new consumers want to be able to shoot right away, and at the peak of the ammunition shortage, they didn’t understand why they couldn’t shoot — a problem not common in other industries.
“For a product like an iPhone, you can either be the first in line on the day of its release or wait two or three weeks, but the end result is the same — you get an iPhone. Our industry is different, we need ammo to get people to come to the range, shoot and handle the products. Without ammo, they’ll get bored and move on to other things they can get their hands on,” Hall said.
The demand for ammunition has decreased somewhat from early-2013 levels, and supply is beginning to meet most of the demand. There are still shortages in some calibers, but dealers report increased availability overall, meaning they can expect to welcome a growing number of new shooters in 2014.
But how can these new shooters be reached effectively? Hall believes this is the second biggest concern facing dealers.
The extensive array of materials is one sign of business being done as these
performance-oriented dealers share ideas on how to increase profits and reduce expenses.
Connect With New Customers
Relating to the wave of new consumers being introduced to the shooting sports is a significant challenge facing dealers. The NSSF recently released a study of data from 2008-2012, revealing a dynamic shift in the demographics of new consumers: they’re young, female and urban — a stark contrast to established shooters who are generally older, male and live in rural areas.
With this shift, dealers face the question of how to market to these new buyers effectively. (For more on this report, “Analysis Of Sport Shooting Participation in the U.S.,” visit www.nssf.org/research, or read the article, “The Newcomers” in the December 2013 issue of SI.)
“The sport we love is relevant to this new age group, we just need to communicate with them consistently. What we’ve been hearing from this new group is they need ammo to shoot and they need to be talked to. There are a lot of opportunities here if dealers would educate and mentor them,” Hall said.
The interests of today’s younger shooters vary considerably from established shooters. This younger generation values entertainment and instant gratification — evidenced by the success of numerous video game platforms — while established shooters tend to enjoy more traditional forms of the shooting sports: hunting and target shooting.
This is why it remains important for dealers, as Hall says, to stock popular ammunition calibers — .22 LR, 9mm and .223 — for customers to enjoy for hours of plinking entertainment.
Dealers and their staff have a unique opportunity to guide these new shooters by representing the friendly face of the shooting sports. Dealers have the ability to make an impact at the local level that others in the industry are unable to fulfill, which helps grow the market.
Hall is quick to suggest getting new shooters acquainted on the range has many added benefits for other segments of the industry.
“There’s an upside of connecting with these new shooters: They haven’t found hunting yet. And when they do, there’s going to be an explosion in the hunting market. It’s just a different process from previous years,” Hall said.
With the recent rise of social media, there are now multiple avenues for dealers and their staffs to interact with customers, receive feedback and to highlight upcoming classes or special rebates. Platforms such as Facebook allow for instant access to customers. This communication is essential for building a relationship with customers, Hall said.
“An open line of communication comes in many levels: your staff, website and Facebook page. These channels can generate thoughts and ideas, while you can respond to complaints and praise. Dealers have to be tuned into this,” Hall said.
This is essential for performance-oriented dealers, who continually look for new ways to develop revenue streams, analyze their current financial information and observe buying trends. When a group of dealers are looking at this information with a critical eye, they all benefit. Groups like this already exist, in the form of the Performance-20 (or P-20) Groups, and they are primed to impact the industry in 2014.
Rex Gore, president of Black Wing Shooting Center in Delaware, Ohio, highlights the
importance of advertising in print media. P-20 groups analyze data throughout their
meetings to identify buying trends.
Honest Growth Goal Of Performance-Oriented Dealers
The first P-20 group, cofounded by Miles Hall and Richard Sprague of Sprague’s Sports in Yuma, Ariz., had a meeting earlier in 2013 at Project 2000 Range, near FMG Publications’ headquarters. Shooting Industry was privileged to sit-in on one of their breakout sessions, focusing on the site evaluation of Project 2000 Range.
At its most basic level, the two firearm dealer P-20 groups consist of retailers from around the country representing more than $200 million in gross sales (a third group is slated to begin in early 2014). In each P-20 group, these performance-oriented dealers share financial data, report buying trends, network and highlight business strategies to increase profits. Popular in other industries, such as the auto industry, these P-20 peer groups are the first of their kind in the shooting industry.
“The P-20 Groups feature dealers that are all in the same boat and are all trying to achieve the same thing: making a profit and growing the sport. It’s a credible peer group. The more you know, the more you can develop a better store — it’s something that drives these performance groups,” Hall said.
One of the group’s most valuable tools is its peer-review process. Members of the individual P-20 groups meet twice a year, rotating to meet at another member’s range or store. Throughout the week, the other members of the P-20 group evaluate the host dealer’s storefront, staff and financial information of the previous quarter. Then, the group has a combined session, hosted by an outside moderator, where the visiting members provide direct feedback to the host dealer. The sessions are frank and honest. So, this begs the question: Why would dealers willingly go through this process?
“In these peer-review sessions, you’re hearing from people who are in your shoes and they come with a critical eye to tell you what you’re doing right and what you’re doing wrong. It gives you a reality check. There’s nothing worse than thinking what you’re doing is perfect and cannot be improved further. It’s a painful process, but after, you realize it makes sense and you might ask yourself, ‘Why wasn’t I doing this before?’” Hall said.
Because members in each P-20 Group are not in close geographical proximity to one another — an important stipulation in joining a group — they are not competing for the same customers and can encourage honest growth. Financial information stays within the group, and each member signs a confidentiality agreement prior to joining.
Dennis Rohman, Project 2000’s general manager, considers the on-site evaluation a success — even though it wasn’t easy to be critiqued.
“In this process, we’re hearing advice from top people in the industry. It’s not comfortable, but a different way to explore what we’re doing. In sharing financial information, whether members are selling $2 million or $20 million worth of product, their percentages should line up in products sold. This is one of the biggest benefits of being a part of this group. It’s a free flow exchange of information and networking,” Rohman said.
Smiles abound in this first P-20 group. They’ve laid the groundwork for a second
and third group (to be opened later this year) with the aim of furthering the
voice of the independent retailer.
One thing that sets these groups of dealers apart from other dealers is the importance they place on data. They examine trends, look at the spending habits of consumers and place an emphasis on interacting with them as frequently as possible.
Accountability is a central component for members of a P-20 group.
“Each time we meet, we have an objective sheet we fill out, and report on its progress at the next meeting. Other than operational accountability, the group also has a critical look at each other’s numbers for financial accountability, as well,” Rohman said.
Another important tenet of the P-20 system is visionary thinking, by highlighting the importance of building relationships with the customer.
“It’s not about selling gun today, but about selling the gun five years from now,” Hall said.
Hall anticipates there will be additional groups in the future, with the aim of eventually representing over $500 million worth of sales and providing real-time data on buying trends.
For additional information on P-20, contact Miles Hall at (405) 947-3888.
By Jade Molde
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