Firewire Tells Retailers it Will Not Sell Direct
Hello Firewire Retailer Community,
It’s hard to believe that we’re heading into our 13th year of business, it feels like just yesterday that we started! There have been many milestones along the way, and we are proud of what we’ve accomplished during that time. Not the least of which is building and maintaining our retail partnerships – which we feel are stronger and more beneficial for everyone involved than they have ever been.
We built Firewire on a platform of innovative product, premium pricing AND selective distribution, and those principles still hold true today.
However, the retail landscape has changed dramatically since our launch in 2006. Surf specialty retail is under assault like never before. The omni-channel marketplace, especially with the likes of B2C Ecomm, vertical company stores and online-only platforms such as Amazon, which we police regularly to make sure no FW or Slater Designs products are sold on that platform either, have all exponentially increased the challenges faced by surf specialty retail.
As the only surfboard brand operating at scale that does not sell consumer direct, or through vertical retail outlets that also offer ecomm, this was obviously a hot topic at our recent global strategy meet.
There are a number of reasons why brands go direct, and to our mind the main ones are:
- Material changes to a brand’s current distribution profile.
- Access to online customer’s email and other contact details.
- Some customers simply prefer to shop that way.
- Reach underserved markets especially 2nd and 3rd tier international regions.
- Define the online shopping experience.
- Grab that retail margin on the sale.
Taking all of these factors into consideration, Firewire has made the decision not to go direct to consumer in our major markets at this time (or for the foreseeable future) preferring instead to maintain our current commitment to our retail partners.
1). Material changes in a brand’s current distribution profile: This is an important one and we want to be completely transparent here – this decision is not a blanket commitment that we will never go direct-to- consumer in our major markets.
However, if our intention was to reverse this decision any time soon, we would never have sent out this letter. In fact, we would much prefer to maintain our strong B&M presence indefinitely – and in doing so, let this decision stand alongside that floorspace well into the future.
As you know, there are various predictions out there as to the long-term impact of Ecomm as it becomes an ever-increasing percentage of total retail sales. And along the way, we might see dramatic changes in the surf specialty retail landscape.
Given the very long-term view of our business that we have, and the integrity with which we strive to operate, we cannot rule out B2C forever should it become a strategic necessity.
That said, this is not a decision that we’ll be revisiting every year, and should our intention change, we’ll be equally transparent about that, and well in advance of implementing it.
2). Access to online customer’s email and other contact details: We are launching an innovative technology heading into 2019 which will allow us to capture the majority of our customer’s data and enable us to market directly to them, driving even more sales to both our B&M locations and online affiliates as we launch new models etc.
3). Some customers simply prefer to shop that way: We already have well-established online affiliates in our major markets, and they do an expert job of selling our boards online. In addition, with our B2B platform in place and our dropship program, they can fulfill their customers’ requests effectively.
4). Reach underserved markets, especially 2nd and 3rd tier international regions: Candidly, we will address certain Tier 2 and 3 markets directly if it makes sense.
5). Define the online shopping experience: Without going direct ourselves, we don’t have as much control over customers online environment as we would have with our own B2C, but we’re willing to accept that for the greater good of our big-picture decision.
6). Grab that retail margin on the sale: We enjoy a strong presence in the market and a profitable business. Therefore, we prefer to support our retailers rather than compete with them to make an extra buck. Our goal is to remain in business for many years, and while surfers buying boards online is a fact of life, we believe that the selective distribution that we enjoy with our AAA retail partners will remain a vital part of our business now and into the future.
In closing I’d like to thank all of you for your respective contributions to the health of our business, and I hope that the commitment behind this decision, and the transparency with which we are communicating it, has come across in this letter.
In gratitude, and on behalf of everyone at Firewire,
Mark Price, CEO Firewire Surfboards.