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One of my subscribers is Keith Curtain from Australia, who runs Australian Surf Business magazine. Keith was the national marketing manager at Reef in Australia before jumping into publishing. His magazine goes to every surf shop in Australia, New Zealand and Indonesia. The 21st issue comes out this month.
Even though he was jamming to make his deadline, Keith took some time to give me a report from the ground in Australia.
It's tempting to throw out my gut feelings on this, however, like most of your readers I suspect, I sit at a desk, and rely on numbers or more quantifiable data. I like to deal in facts and numbers. In Australia we don't have a SIMA and we've only just started a small band of retailers forming under the Independent Surf Retailers Association (much like your BRA).
So two and half years ago we launched our Retail Market Research Report (RMR) © to provide a snapshot of trends across participating stores. The survey goes to every surf shop in Australia, New Zealand and Indonesia six times a year. We manage a 4.5% response rate and when I compare it across the results of the RW Baird Boardsport Report which has been operating in the USA for many years, I'm comfortable with our numbers and aware the report will gain traction and relevance over time.
The short answer is Billabong is consistently the hottest brand (across those stores surveyed), both guys and girls apparel. Quiksilver/Roxy is the second hottest. Although Rip Curl is next in line, I feel the gap is (statistically) widening between 2nd and 3rd (hottest). Rusty consistently rates highly, especially with its girls line. The commitment of the major brands to the sport shouldn't be forgotten, the marketing firepower they exercise is almost out of whack with their sales, team, marketing, events, every layer. They keep the whole train moving forward, some of the other brands are just passengers. So it's more a case of hot and lukewarm.
In Australia, its surf, surf, surf. From your blue collar worker to your corporate executive; we eat, live, breathe and %$#! surf. Again, I'll throw to our RMR © where over 90 percent of participating stores classify "surf" as their primary distribution channel. Although the distribution mix varies, surf outweighs skate and snow fairly heavily.
It's also indicative of our climate and geographic spread. Almost all our capital cities are within 1.5 hours of the coast and the entire country has undergone the effects of the "sea change" phenomenon with masses of city dwellers exiting to regional coastal towns. This is good news for surf shops. Fourteen percent of the total population classify themselves as surfers, that's 2.8 million surfers which is a sizable chunk of the pie. Street and fashion enter the equation through fashion cycles, but its SURF that's outwitted, outplayed and outlasted them all.
There's speculation in all this because of the dominance of the major brands. If you are looking for names, then there's already momentum behind brands like Insight (obviously). Rusty is a giant killer and from the upstarts, the shining star is Rhythm, a small Gold Coast label run by Jamahl Grey, a former Billabong and Rip Curl boardshort designer who has been in the game (along with the whole Grey family) from day dot.
Yes, but to a lesser degree than the US and Europe because our distribution is so diverse.
Hard to say, but I think Hurley under former General Pants/SDS GM Simon Haskell's stewardship is poised to do really well over the next few years. New comers include RVCA with former WCT surfer Nathan Webster at the helm...maybe.
We published an article two years ago that comprehensively looked at this issue. It was called "Are We Killing the Golden Goose?" It was a ground breaking article in my opinion. It's as relevant today as it was then.
Brand owned stores are only an issue where they cross over into an independent retailers natural trading area. We have a good spread of distribution here with multi-door retailers such as Jetty Surf, City Beach, Rush and Brothers Nielsen amongst others doing good numbers along the East Coast all the way through to the single door operators. Because of this saturation, I think many of the major brands are looking for expansion in other parts, such as Indonesia and throughout Asia for new market opportunities.
It also depends largely on the terms. Billabong, for example, likes to enter into a partnership with existing retailers in these locales. Byron Bay is a a microcosm of this trend where in a small town of population 6,000 you've got flagship stores from Billabong, Quiksilver and soon Rip Curl. We published an article by Derek Hynd about this very topic, it was an honest and at times hard hitting analysis by Byron Bay locals Mark and Gary Timperely from Bay Action and I can tell you they didn't pull any punches and neither did Derek!
I think its important to note that most of the brand managers at these companies are committed surfers and their first desire is always to work in with local retailers in key locations. However, if your store's not doing the numbers, not giving adequate representation and you are in a good location - then look out.
We are fortunate (or unfortunate) enough to be on the receiving end where the Australian dollar has reached record highs against the green back (US$) and of course your readers would be aware how this has effected Billabong. The Australian economy has been very buoyant of late but there are warning signs. Successive interest rate rises, climbing petrol prices, booming real estate prices (thanks largely to the aforementioned "sea change" phenomenon) and unseasonable weather patterns have all conspired to make retailers a little jumpy.
Retailers will tell you when its sunny, they (shoppers) spend. Lately that's been a little hard to predict, consequently the number one issue becomes oversupply, stock and inventory issues, as well as an emergence of factory direct outlets exacerbating the problem.
I'd like to let interested readers have the opportunity to subscribe to ASB. We launch our website in January 2008 loaded with resources and over 1 million words archived, basically everything that's transpired in the industry "down under" since we launched 3 years ago. Our splash site is online now.