Josh McDonnell speaks to Ripcurl marketing manager Neil Ridgeway about how independent retailers played a key role in the shift from predominantly wholesale to an even split between bricks and mortar.
How are you shifting with your retail as opposed to wholesale?
It's way more of a hybrid business.
Our distribution would be 50/50 these days whereas 10 years ago it was far more weighted to wholesale and independent retailers. That was because a lot of those doors have closed and we've also acquired those closing doors. We've acquired some independent surf rack retailers because they are going out of business or getting older.
We want to keep the distribution alive so that is why we take them on. There are three reasons for having retail, the very first reason is to showcase the brand and products, second, to get distribution where there is none and thirdly to make money.
The first one is interesting because often when we open a store, and this happens around the world, particularly 10 years ago, but if we opened a big store in Huntington Beach or Manly, the retailers at the time were not very happy and some of them said we aren't going to carry your products any more because you're really opening in competition with us.
What we have found is, when we put a big well run Ripcurl store in a town, the other surf accounts benefit from it because it's such a powerful brand statement that the customers come through and get a dose of Ripcurl. They may not buy it from us but they walk across the road to the other shop and ask have you got Ripcurl and at a different price.
In the end, after 12 months those accounts that may have thrown us out say hey we want you back, and that has happened all over the world.
How does this 'shop across the road' attitude influence your price points?
Well we want good clean sales for customer wholesale levels, whether it is to ourselves or to our independent retailers and we want good, solid margins. We are a full price full service brand. So we don’t discount. You won't get terms and conditions individually as a retailer from Ripcurl like you would from some of our competitors.
We want good clean sales at the strongest market we can get and if there is a discount policy in the region, it's the one policy for every retailer in the region. For example, you buy so much you might get a discount, you buy more you might get a discount. We don’t vary on that and we don’t go on sale or cut prices.
Even online, you will not find our estore on sale at any time in the year, even when the rest of our brick and mortar stores are on sale, which is stocktake in July and post Christmas, and every other store is doing the same thing. You will not find out estore on sale. Now every other estore in the surf market and out of the market are continually sending customers EDMs with 50% off, 60% off, liquidation, etc.
We just don’t operate that way, so price points stay consistent for Ripcurl goods around the world.
The only difference is if an independent retailer buys it from us at full price wholesale, which they will, and they want to liquidate it themselves at the end of the season, they are going to do it because they own the stock.
What are the key markets? Any new for 2017?
Australia is the bedrock of the entire global business. Australian sales are pretty consistent, topline sales year in year out will go up. It's generally been us, Quicksilver and Billabong but there are other brands that are making headway but it is still usually those big three.
When they falter it's up to us to keep making product to take the market share. That happens around the world in the core market. So we are just chasing having better products that are targeted for our customers.