An exclusive interview with Quiksilver Americas President Marty Samuels.

By Joshua Hunter

About six weeks ago Roxy re-launched its Web site. The site now enables visitors to purchase Roxy product direct from the manufacturer online. Quiksilver’s site will follow as early as March.

The issue of manufacturers selling product direct to the consumer online is a hot topic within the actionsports industry, so Transworld Business caught up with Marty Samuels, President of Quiksilver, Americas Region and a handful of the industry’s most influential retailers—including several Roxy/ Quiksilver online affiliates—to get the full story. Here’s just a little taste of what Samuels had to say.

Transworld Business: Why did Quiksilver decide to go direct online?

Marty Samuels: It’s a huge channel and it’s one that is growing every year. It’s something we’ve got to participate in. We’re like Neanderthals if we don’t. We’re going to do it in a way, as we’ve always tried, that works for us and our retail community too.

We believe that this will help us, and our customers too. It’s not just about us. We think that all this is going to do is increase demand for the brand, and as we learn more about how to operate in that online, direct-to-consumer world we’re going to find ways to include our wholesale customers in the benefits. We’re looking for ways to take what we’re going to learn, and rather than horde it, use it in ways that will enhance all of our businesses.

I think that our industry isn’t that good at matching supply and demand— the whole supply chain, logistics part of it. Making sure that the stores, and not just our own stores, I mean Surfside, Becker, or whoever have the size, color, and style that people want at the time they’re in there.

I once worked in stores and I remember that half the people that were coming in asked for something that we carried, but didn’t have the right size or color. I think one of the great things about the direct-to-consumer thing we’re working on is that it’s hopefully going to improve the ability to match the supply and demand on specific products better.

Are you guys doing it in house or did you hire a third party?

Right now we’re outsourcing all the fulfillment and call center stuff. I want to be careful about sharing too much with my competitors though. I want to be as forthright as possible, but I‘ve got to find the balance of doing that and not teaching the other guys what we’ve learned about how to do this thing.

So you think the other brands will go direct online too?

They’re going to be all over it. They’re just waiting for us to do it. They’ll go out and tell everybody what assholes we are for doing it, then three months, six months, or a year from now they’ll all be doing it.

How did you go about telling your retail partners that you are going to be selling direct online?

We try and give them {retailers} time on these things. I can remember years ago sometimes going out a year in advance of a store opening to talk to the people that we thought might be effected and give them time to think about it and try and work together to make it a positive rather than a negative.

On this one, after we hired Nicholas {Nathanson, former president of swell.com} we felt like that’s a fairly clear signal of intention. So shortly after that we went out and saw our online affiliates and those were the main guys we were concerned about.

We told them the plan and the sequence of events. Our sales managers, our reps, Tom Holbrook {executive vice president, strategic brand development}, and our retail team have talked to those guys every week to keep them informed with what’s going on.

We don’t do these things rashly. We care a lot about our retailers. We take those relationships seriously.

What kind of an impact an impact does this have on Quiksilver and its wholesale customers?

We’re in the wholesale business. That’s 80-plus percent of our business here in the Americas region, and we have relationships with a lot of our retailers that go way beyond just the dollars and cents of it.

We’ve always said that without the core shops we’ve got nothing. We’re going to find all the ways we can to make it positive for both parties. We just started so we’re learning about how it works for us and how it’s going to impact our wholesale customers.

I’ve had a couple of meetings with key sales executives about gathering the feedback we’re getting from accounts over the last month, and there are some ideas in there, and tweaks we’re going to do in response to what we’re hearing from our people.

I know that discounting is another issue that has probably come up. Will Roxy or Quiksilver being discounting online?

The way we’re set up we are going to charge a fair price, but we don’t want to see the retail prices footballed around, and we’ve discouraged our {wholesale} customers from doing that. We’ve also been very disciplined ourselves about that. That being said—for our retail customers and ourselves—we are not Sears.

What we buy and what we ship are not always in the proper proportions, and at some point when the seasons are over the stuff has to go away.

So there is clearance at appropriate times in all the channels, but we don’t promote it, we don’t advertise it, and it’s done in an orderly kind of way. I don’t see that changing at all.

We have our own outlet stores and if there is excess inventory as a result of the direct-to-retail-consumer initiatives then the excess inventory is going to come to back the distribution center and go out to our own outlet stores. So there isn’t going to be any discount merchandise from us on the Web.

Would it ever make sense for Quiksilver or Roxy to do mailorder catalogues?

The catalogue conversation for Quiksilver is kind of a tricky one. I think that what we’re going to be looking at for the next year or two—with DC, Roxy, and Quiksilver—is really using the Internet to better communicate with our consumers.

That’s what is going to be happening in the future; using the physical stores, the Web site, other new media, and print media to get it all more integrated and get the message across to more people. I think that’s the challenge. Maybe catalogues are a part of that or not, but we’re looking at all the ways that we can get more intimate with the customer and I think the Internet gives us a lot new ways, and there are ways that I can’t even envision yet that are going to be out there to customize the communication with customers.

What do you see as the biggest challenge in the future?

The big threat to all of our specialty retailers and us is Amazon and Zappos. I’m not criticizing either of them, they’re doing a great job, but because of their size and strength relative to the independent surfshop guys, they’re going to be able to invest in new hardware, new software, and R&D. All the new ways to do these things are going to be developed by these guys and how are we all going to compete?

I think Quiksilver, Inc. is going to have to work with our existing dealer base as a group to try and compete against these guys.

Those are the things we’re trying to think about with Nicholas {Nathanson}. We’re working on a lot of things. We’re going to be going to our retail partners with some proactive ways to work together and be able to compete. Other wise I think in five years from now it’s going to be a big problem.

How have your online affiliates responded so far?

Unfortunately we had a little technical glitch when we came online and the affiliate links were not accessible, but that was never our intent and when we went to talk to our guys we told them that and we’re fixing that. Certainly we will not go live with the Quiksilver piece until we have that nailed.

We still want to have the affiliate programs. I’ve looked at company’s like Burton and Patagonia that have been at it longer and I think they have some interesting things they’re doing to make it beneficial to retailers as well. We’re lokoing at those things, and not just those things. We’re looking into some other ways to do things that are positive.

So when will Quiksilver’s direct to the consumer site go live?

We’re building the site now, and we’ve only been up with Roxy for about six weeks. We’re learning a lot, we’re getting a lot of feedback from our retailers and our own people. We’re getting all that feedback and at the same time Nicholas {Nathanson} and his team are working with all the Quiksilver marketing and product people to build the site. When we feel we have it totally right and the marketing team and product team and Nicholas’s retail team are all happy with I then we’ll go live. If that’s March, fine, if it’s April, fine. If it’s June, fine. Obviously the sooner the better, but it won’t be until we feel we’re going to present a good experience and the affiliate thing is perfect.

Much, much more to come …

Stay tuned.

Comment on this article right here at twbizblog.com! Check in to the site daily for the latest feedback on this issue, and other breaking news. Also make sure to get your hands on the January issue of Transworld Business for the exclusive, feature-length article covering Quiksilver going direct online.

Tags: marty samuels, quiksilver

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