Matt Powell  (00:00.27)

I would tell you the underlying part of the business is actually pretty healthy. But there are issues that we're facing around inventory, around product, around the way we bring product to market, the way we address our customers, the total available customer base that are making us not so good right now. So it was a tough year. I think 24 is going to be a tough year. But I do again feel the underlying piece of the business is still solid.

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Cole Heilborn (00:34.606)

Welcome to the Backcountry Marketing podcast. I'm your host, Cole Heilborn. On this podcast, you'll hear from leaders in the outdoor marketing industry discuss the gritty details of their work, as well as the latest challenges and lessons they're learning along the way. If you want to hone your craft and become a stronger marketer, then this podcast is for you.

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This podcast is produced by Port Side Productions, an outdoor film production company based in the Pacific Northwest. Welcome to the Backcountry Marketing Podcast. Today, I'm sitting down with Matt Powell. Matt, you've been in the industry for 51 years now, all across the retail world. But today, you currently work with SpurWink as an advisor. You study data and trends and help all of us make sense of where the industry is going, what's changing, what's evolving. And you've got some really fascinating insights to share with us today. So welcome to the show.

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Matt Powell

Thanks very much for having me. I'm excited to do this. 

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Cole Heilborn

So if you could give us an opening statement, I'm going to limit you to 60 seconds. From your perspective, what is the state of our industry today? 

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Matt Powell

I would tell you, the underlying part of the business is actually pretty healthy. But there are issues that we're facing around inventory, around product, around the way we bring the product to market, the way we address our customers and the total available customer base that are making us not so good right now. So it was a tough year. I think 24 is going to be a tough year. But I do, again, feel the underlying piece of the business is still solid. 

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Cole Heilborn

Well, I'm excited to dive into this. I think there's a lot of talk out there about the state of the industry. Some people are very pessimistic, some are incredibly optimistic. And I'm excited to, as I said, kind of to dig into this and evaluate what are the trends that you're noticing. What are the opportunities that exist that maybe we aren't considering? But before we go there, I'd love to back up a little bit. And 51 years of retail experience is, I can only imagine the amount of stories that you have, but I'd love if you could give us kind of the quick background on yourself. Kind of what your expertise is and some of the work that you've done 

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Matt Powell

Yeah, so I started out my career in the department store business actually I spent many years and almost 20 years with one retailer which in today's world is completely unheard of and in the early 90s there was sort of an implosion around the department store industry that created giant retailers like Macy's and A whole lot of us got to find something new to do I then had crossed over to the sports world. I worked for Sport Mart in Chicago, which at the time was the largest big box sporting goods retailer in the country, later acquired by Sports Authority and now out of business. I left there, went to work for a sneaker superstore. We carried 1,500 styles of sneakers and I don't recommend anybody do that either. That company was sold and they wanted some of us to go to Alabama and I didn't see myself in Alabama so I stepped away. I worked for Models for a year. I tried consulting for a year and failed horribly at it and then I got a call to take what was the second coolest job I had after this one. I was a dot com in the early days of the dot com business called MVP.com that was started by Michael Jordan, John Elway, and Wayne Gretzky. And I got to meet those guys who work with them. But like a lot of early .coms, that one burned down. And I tried my hand at consulting again, and I had met a couple of hedge fund managers when I was at SportMart, who would call me periodically to get my opinion on what was happening in the sports industry. And when I said I was consulting, they said, hey, we'll pay you to do research. So. 23, 24 years later, I'm still doing research on the industry. So I was working for myself in the very beginning. I had an affiliation with Sports One Source, which publishes Sporting Goods Business Magazine. I left there 10 years ago, went to work for NPD, which is a large market research firm covering all of sports and that company was sold and then merged with another company I left a year ago and started my own thing. And I'm also having an affiliation with a group called BCE Consulting, which is where I'm doing most of my work. And it's been a lot of fun. We're doing strategy work, merchandising work, five -year plan evaluations. We're doing some very specific market sizing kinds of work. So it's been a wide range, but really my goal was to do fun and interesting things to give back to the industry because the industry's been so good to me and to take some control over whatever my final years, and that's plural years, in the industry. I'm not going anywhere yet. I'm having too much fun. So I told somebody the other day, as long as I can remember people's names and phone numbers, I'll be fine. 

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Cole Heilborn

So when you talk about research, can you share a little more in terms of where you're finding information, what sort of information are you pulling and how are you using that to help folks? Just to provide a little context to what that means for you and your world. 

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Matt Powell

Well, when I was at NPD and prior, I actually had POS sales data that would help inform my decision making. I no longer have access to that. There are public statements that are out there from brands and retailers. Sirkana, who replaced NPD is now putting out some information so that it's in the public domain so I have access to that. There are other sources out that provide again public statements on their data and then I'm talking to a lot of brands and retailers all the time and so anecdotally I can piece together what's happening in the industry and you know I've been to this rodeo more than once so I see things coming around again that happened before. And nothing ever happens the same way twice, but there are always parallels to that. So it's really very informal today. But I talk to so many people that I really feel very well informed about what's happening in the industry. 

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Cole Heilborn

So it's not a surprise, but I think everyone understands kind of the basics of the COVID boom and then bust and kind of the downward spiral that we've been in. And that's a really common, you know, that's a common tale that everyone references. I'm curious though if you can kind of shed a little more light, maybe a little more nuance into what happened to put us where we are today, but beyond maybe just the surface-level explanation as to what 2024 looks like and how we got here. 

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Matt Powell

Sure. Well, so it, I mean, I think there's some really good things that happened to the industry during COVID. People felt safer outside. I think people wanted to get out of their houses. I think they were feeling claustrophobic, wanted to get out and recreate. And so there was a huge surge in outdoor activity that happened. And that's continued. Perhaps we're not surging, but they've remained at very high levels. I live on the Spurwink River, hence the name of my company. And there's a tremendous amount of recreation that happens on this river. Stand-up paddle, kayak of all sorts, swimming, some small watercraft. So you could see it just looking out my window that the world had changed. And on the trails and lanes around where I live, lots of people out walking, hiking, again, trying to get outside where they felt safer and to recreate. Big positive there. That caused a surge in business. The stimulus money that went out, caused a big surge in business. And it was initially a very good thing, but it's become a problem in that if you bought a big ticket item during the pandemic, a kayak, a stand-up paddleboard, a bicycle, a fire pit, you don't need another one unless you broke it or you didn't like it and wanted to get something different. So there was a huge surge during the pandemic and we've come down from that now, but we're not back to 2019 levels. And so there's more good news for the industry that longer view, we can say, hey, you know what, we're still in a pretty good place, although we are giving some of those gains back. On the negative side, a couple of things. I think the shortages that happened during the pandemic didn't give the consumer a full breadth of products to buy. And if they were in a fever to buy something, that perhaps they bought something that was above their skill level or above their needs. And when they tried to use it, they found that they couldn't use it because they didn't know how to use it. They weren't an experienced user. You know, I think some retailers oversold people product just to, to make the sale. And again, I think there's that hurt the industry. I think people who were oversold lost interest very quickly said, oh, this isn't for me, I can't do this. And so they abandoned it altogether. I have no data on this, but my sense is the secondary market has flooded with products that people tried during the pandemic and then decided they didn't want to use. And by the way, if you live in an apartment, what do you do with a stand-up paddleboard? What do you do with a kayak? I mean, you can't leave it on top of your car all year long. Well, maybe you can, but you know, there's no place to store it. So now what do I do with it? So a whole lot of things happen.

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Cole Heilborn

 I'm curious if you have any data or anything that expresses kind of the state of our industry. So I think people would say, well, it seems like there's there's kind of conflicting messages. Some people would say things are in a downward spiral. There is obviously the the report that came out last November about the industry being a trillion-dollar industry. And there's a lot of nuance there, certainly. So it seems like there's conflicting messages about how the industry is performing overall. What insight can you provide that might help us better understand what's happening? Well, I think we can look to the public companies, the large big boys out there, REIs and the VFs and so forth, Wolverine to some extent, and get a good read through on at least a part of the market. And pretty much everybody's put up some pretty disastrous numbers. That doesn't mean there aren't bright spots out there. And I think we're going to find that when we look at it, that some small retailers have done well, maybe even some larger retailers have done pretty well. Big Five, who we don't really think of as an outdoor retailer, but has actually a fairly significant portion of their business in outdoor, had a really tough quarter of California before all the snow came to California.  I guess, from public companies would tell us that the business is not very good. But again, that doesn't mean there aren't bright spots. And there's another, actually there's another interesting element that I think says that probably the future is going to be better but more challenging, and that is the number of companies who are getting into the outdoor business. And I put my fake quotation marks up with that. You know, who are adding outdoor products to their assortment.  Maybe they're using private label to bring in outerwear and fleece and plaid shirts and so forth. And I've had a lot of calls over the last two or three years from people with money saying, how do I get into this business? Where are the openings for me to get into this business? So the space is becoming more crowded, particularly on the apparel and footwear side. The blending of outdoor and athletic, another piece of the story here. And ultimately, I see those as good things for the industry. Anytime we're forced to be more competitive, we get better. So these are not structural issues that are putting up roadblocks into us. It's more competition. We're saying, hey, we've got to get better at what we do. So I see that as a potential bright spot for the industry. 

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Cole Heilborn

So this is what I've always wondered. How much of the decline is inflated because there was a massive surge? If we were still on track with the same growth numbers that we had in 18 and 19, would we still be in a decline, quote unquote, now? Or how much of, OK. 

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Matt Powell

No, I think what we're doing is giving back some of the business that was artificially stimulated, which was, I guess, the intent, if you will. But, you know, again, and again, people bought things they didn't need. People bought things that they don't know how to use. All of those things are weighing down on us. But, you know, if you bought a if you bought a car during the pandemic, you don't need the car right now. So it it there is definitely some give back here. But, you know, if we were at the more normalized rate, we wouldn't actually probably be as high volume numbers that we're actually at today. Are there other industries that are facing a similar trajectory or is outdoor unique in some way? No, I mean, the bike business is another one that's very, very much a parallel here. The fitness equipment business, which was terrible before the pandemic. When the pandemic hit, people couldn't go to gyms, so they went out and bought a bunch of equipment. That industry is giving back those gains as well. And frankly, even the sneaker business is not great because people filled up their closets with sneakers and you don't need another. And by the way, the marketplace hasn't brought anything new out. And maybe that's another layer on the conversation here is that, particularly in the sneaker industry, the big brands really shut down their innovation engines. And there's not a lot new out there. We look really old and tired on the floors and in sneaker stores as an example. So, you know, one of the ways we're going to get out of this is by fresh products, fresh ideas. You know, and I think embracing the family as a really viable channel here, something that the outdoor industry has kind of shunned. You know, we saw a lot of people trying to take their home into their backyard during the pandemic, again, to extend their homes and sales of things like pop -up shelters and grills and outdoor furniture and fire pits all went off the charts during the pandemic. Now, again, if you bought a fire pit or a pop-up shelter, you probably don't need another one right now, but people are outside more. And so I think that there's an opportunity to extend that as well. But I think the industry has really focused far too much on themselves as the end consumer and not really look to the much bigger marketplace, which is the family side of Outdoors. 

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Cole Heilborn

Yeah, tell me more about that. I mean, the industry is kind of notorious for trying to remain core. I think there's often been this struggle of what is outdoor? You know, what, what do we, what do we allow? What do we accept? And there's a lot of, um, I have a lot of questions about why do we put these parameters on ourselves as an ego thing? Is it a, um, you know, is it just a, are we just being gatekeepers for the sake of trying to keep our, our mountains and our places pristine? Um, but as, as you mentioned on our previous call, there's so much opportunity outside of the core and there's this struggle internal and external, I think to really like allow ourselves to embrace, you know, what is considered non-core, if you will. Can you share more about your thoughts here? 

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Matt Powell

Yeah, well, I look at the industry has always been a club, a clique, however, you want to mean girls, however, you want to describe that. But, you know, the outdoor retailer show was always people who were standing in the aisles talking about what are their latest exploits were. And that's fine. If that's what you want to be as an industry, that's fine. But you have to understand that it's finite. And it means that there are going to be limits to how much you can grow. And there are so many public companies in our space today who have to grow to satisfy the stock market and their shareholders that they have to have growth. And so to some extent, being small and I'll use the word elitist or exclusive, it argues against growth. So if you're happy being a small company, a big fish in a small pond, good for you. But you're never going to be Nike. And everybody has these ideas that they could be a $50 billion brand. And if you're going to be $50 billion, you've got to do a lot of more broad-based kinds of productsAnd again, there are people who are recreating today who weren't doing it before, but they're not doing a three-week pack -in. They're going out for an hour or two hours or driving to a state park and having a picnic. And that's part of the outdoor world as well. And I don't think that threatens the core in any way. And a lot of the products the core uses will never be used by this consumer. But I think everybody's after the same ultimate goal, which is to get outside and have fun and be healthy.

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Cole Heilborn

Yeah, what's the risk then? Like, why is the industry hesitant? 

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Matt Powell

Well, I mean, part of it is that the industry is an echo chamber. OK, and so they they're talking to themselves about topics that they concern themselves with. And they don't really understand the broader market. I remember I did an address to the OR show 10, maybe 12 years ago, a study the National Sporting Association did a study on Hispanics and the outdoor business and noted that Hispanics do things as families. They like fishing as in recreation. I don't remember all the points of it, but the big point of the white paper was there's a huge business opportunity the industry's overlooking. And so the industry talks about being more inclusive, but it tends to be more inclusive doing the core stuff as opposed to being inclusive doing the more family-oriented stuff. So it's not sexy It's not dangerous. It's not it's not elitist it but there's that's where the business is for in that example, like how big is the opportunity the Hispanic population represents, do you know I? Don't recall I think we'd have to dig up that white paper again, but there was a significant economic opportunity around that business so You know, I think that's really the question I think the industry needs to confront is, are we willing to not be so core? Are we willing to have a bigger tent to let people come in and be part of this industry? How do we do that? How do we encourage people to get outside and support all the things that this industry supports?

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Cole Heilborn

I mean, that's a conversation that we've had many times on this show. Folks are asking themselves, how do we be how do we reflect our core? How do we honor them and, you know, who we were, where our brand started, our foundation, but then how do we bring in people who don't look like that, who aren't, you know, somebody and accomplishing FKTs and all of the ridiculous things that folks do. So there are conversations that are happening, but what do you think, what will it take for things to really change, to go from beyond conversations to action to actually making an effort. 

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Matt Powell

Well, look, I think if a retailer is successful and is able to execute against this, I think that sends a message to the rest of the industry. I think if you look at a retail like LL Bean, as an example, my neighbor up the road here 45 minutes away, it's a very big tent there. While they do sell products for more extreme activities, they sell an awful lot of products that are just for general use. And they're very, very successful as a retailer. So again, if we're gonna spend all of our time looking down our noses at people who aren't as core as I am, I think that's a problem. But if we open up and say, hey, there's some business being done here and it's good business why wouldn't we get after it? One of the things you brought up was the hesitancy for the industry to sell their products in big box stores. Again, it probably feels like a conflict of, well, we can't we can't sell on a Target or a Walmart because that's not, you know, that's not special. That's not who we are. Is that a part of the opportunity as well that you see to reach beyond the specialty retailer? Absolutely. Now, look. I understand a lot of the product that the industry sells is very technical. You have to be trained in how to sell it. You have to be trained in how to use it in order for you to be happy with that. So not every product can go into a big self-serve retailer, but a kayak, sure, why not? Again, a fire pit, a pop -up shelter. I mean, I got to tell you Walmart sells a lot of pop-up shelters out there. So it’s wouldn't mean everything that the industry sells goes there, but I think there are an awful lot of products that could be there. And maybe it has to be sub-branded if you want to try to protect yourself there, although you're giving up some brand equity. If you've spent all your career or your lifetime of your brand building up the equity of that brand, and then you come up with a sub-brand that doesn't mean anything, you've given up some leverage there. Look, I think a lot of brands have figured out how they can be in more than one place. You look at, say, Nike and how many different kinds of retailers they sell their products to. And they've been successful in being able to segment that product around all those different channels. Yeah, and I don't know that they've diluted their brand equity as much as people might think they are, based on how diverse their product really is and all the corners of the world that it reaches.

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Cole Heilborn

Do you feel like this downturn, is it healthy? Do you look at this as a good thing? 

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Matt Powell

Yeah, I do. Again, I think if you take the longer view, we really aren't in a downturn. We had it up and down, but we're still way above where we started. And I think, again, side effect of it, there are more people out recreating. The park visits are up, and the people spending time outside is going up. And it's probably weeded out some weak players and you never like to see anybody lose their business or lose their job. But you know, I think weeding out is always a good thing for the overall business. So in many ways, I think this has been healthy.

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Cole Heilborn

 As you look around, what questions are you asking yourself? Are there things that you're unsure about? Things that you're trying to answer these days? 

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Matt Powell

Well, I think, yes, I'm always trying to understand what's happening. And I challenge myself every day on the assumptions that I've made and the conclusions I've come to. I think you have to do that as an analyst. If you went outside, I got all the answers, and I don't need to learn anymore. You're out of business. So I'm constantly questioning myself. I don't know that I have a big thing that's troubling me, but I think I try to keep a very open mind about where I am and what I'm seeing. But look, we need freshness here. We need new ideas. We need new approaches. And in some cases, we've taken things as far as we can take them. We can't make shoes much lighter than they are today. We're not going to have any big breakthroughs there. We can't make a puffer jacket any lighter than it is. I mean incrementally lighter, yes, but breakthrough lighter, no. But you know, where's the pickleball of outdoors as an example, okay? What's the next big thing that people are going to gravitate to? We have some interesting things like Stanley Quentcher's that are having a moment right now, but I'm looking for more revolutionary kinds of things. Think about stand-up paddling and where it was, say, 15 years ago and where it is today and how that became a thing, going back even further with snowboarding when it first started up and how that just flipped the industry upside down. Mountains were saying, no snowboarders, only skiers, and all that silliness. But we need another big idea, I think more than anything right now to really reverse the soft spot that we're in. I know the core will always continue to cycle through new gear because people like the newest and latest thing. But has the industry become saturated?

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Cole Heilborn

 I think you mentioned at one point, our industry makes good product. It lasts a long time. It does its job. Have we just become saturated and that's part of this equation also?

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Matt Powell

I think perhaps on the on the core side that we may be getting to the point of saturation. But on the family side, no way. There is so much more room there. So much more opportunity to, I think, to introduce consumers to being outside and other less strenuous outside activities, but nonetheless other activities. And, you know, this, I mean, one of the cool things about the outdoor industry is it's a bunch of gearheads, right? So, And even I think the family side, you know, whether, you know, the Yeti cooler run up that was so dramatic. You know, I think a lot of people who were not outdoorsmen bought Yeti coolers. And so, you know, can we do another version of that? Absolutely. So I know I think there's still a lot of run room here. 

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Cole Heilborn

Do you feel like our industry is short-sighted? Do we have a habit of not looking far enough into the future? 

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Matt Powell

Yeah, well, I think that is really impacting the entire sports industry. I think, first of all, the lead times are far too long. And so that you tend to get locked down in the process and maybe not looking ahead to the next thing. There are a lot of smaller, more entrepreneurial firms that are undercapitalized. Therefore, they have to be very careful about how they're allocating their resources, which holds us back. The bigger brands have all been really soft goods for the most part. Again, I don't know how much more innovation really can come in on the soft goods side. We certainly write fashion trends, but I don't know how we make a puffer lighter or a sneaker lighter or a boot lighter.

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Yeah, I think there's a certain inherent caution that has come into this industry as maybe risk -taking as the activities themselves are, the business has not been particularly ris -taking. 

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Cole Heilborn

What do you mean by that? 

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Matt Powell

Well, look, I mean people doing extreme things, they're doing dangerous things, rock climbing, solo hiking, and so forth. I mean, these are really dangerous activities that you have to have a lot of preparation a lot of courage for but then we get into the business side of things and I think people tend to be very conservative in their business practices not sure if we want to open up this retailer not sure if we want to go into this city not sure if we want to make things for the family and so I think that there's a tampening tampening down of that that that's holding us back as well. 

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Cole Heilborn

Why do you feel like that is because I'd almost I would assume that we would be a very risk calculated industry, we would know what risk to take and what to avoid.

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Matt Powell

Yeah, you know, money does funny things to people. So, you know, I think when you're talking about my money, maybe I'm going to be a bit more conservative than I would be with somebody else's or even, or the courage that I have to tackle a really dangerous activity because I trust myself. I know what I can do and of course people make mistakes doing that as well, but I think there's a different thing when it comes to money. I think people just tend to be much more conservative there. 

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Cole Heilborn

Interesting. So to summarize, it sounds like there's a few different factors at play here that you think will help kind of right the ship or pull us out of this slump a little bit. And again, some of it sounds like it's just we're due for it based on the last few years. But to recap, it sounds like we just need to kind of ride the wave, ride it out, because it's here, it's going to be here. You just have to make things, you have to make it work. If we can find a new budding sport to kind of grow with and build upon, new product innovation, like how can the industry, how can we double down and continue to innovate? And then I guess maybe the biggest component is how can we get beyond ourselves. How can we get outside of the echo chamber and find others who don't look like us, don't act like us, who are different, but who still love getting outdoors in different ways. It sounds like that's kind of the three or four main points that you've summarized for us today.

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Matt Powell

 I think the only thing I would add is I think we need to de-risk the weather. I think we need to figure out or accept the fact that this is now the new normal, that we're not going to have cold and snowy winters. We're going to have warm and wet springs.

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And how do we respond to that? How do we reinvent ourselves around that? If 50% of the apparel business is outerwear and we're not gonna sell that much outerwear, how do we replace that? How do we find a spring business that can offset the loss of the winter business maybe as an idea? And so I think there needs to be a lot of thinking about how do I respond to my merchandising rather than just, I sold 5,000 jackets last year, I'm buying 5,000 jackets this year. And I'd rather figure out how do I transform this into something different, something new.

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Cole Heilborn

Yeah, well, unfortunately, that's a topic that's bigger than any one of us to tackle, but nevertheless, something to be aware of and just observing. Matt, is there anything that we haven't discussed today that you'd like to leave our audience with? I appreciate your insight. I appreciate your perspective on some of this. Maybe one final question is, why does this matter for our audience? Why does this matter for our marketing industry? Well, look,

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Matt Powell

I mean, I think the greatest thing about the outdoor industry is the passion of the people for the sport, for the activities that they do, for the environment, all of those things together, and people who figure out how to make a living and still supporting all of those things. And I think that's one of the great things about this industry is the passion of the people. And that's not going away. And I know I've been critical of some of the business practices perhaps, but never the passion. And I think that's one of the things that's kept this industry going. There are hardly any trade shows anymore. There are more than one trade show in the outdoor industry. And I think that speaks volume to the commitment of the community itself to want to preserve. And so I see that as a big, big plus. And again, I know I'm critical, but I'm also very in awe of the commitment of the people who are in the outdoor industry. 

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Cole Heilborn

Well, you can be critical and still want the best for everyone. Those two don't. They're not mutually exclusive. Exactly right. Matt, if folks want to find you, if they have further questions, if they want to learn a little bit more about what you're up to, where can people go to find you?

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Matt Powell

Sure. Well, I'm on LinkedIn and I'm very active on LinkedIn. I repost a lot of stuff. I write a fair amount of things that are on there. So link me on LinkedIn. My email is matt@spurwinkriver.com And I'm easy to find. So reach out anytime. I'm always love talking and philosophizing about the industry.

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