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Display Your Way To Tavarua

If you’ve noticed a lot of shops with Arnette displays lately, it’s probably because someone in that shop wants a free trip to Tavarua, Hawai’i, or Cabo San Lucas. The sunglass company is challenging its retailers and reps in a contest to put together the best window display promoting Arnette product.

To enter, there’s one simple rule: The display window must be devoted entirely to Arnette. “We just want to get the reps really involved at the retail level,” says Arnette Director of Marketing Gary Siskar. “Going into summer it’s a good thing.”

The judging criteria is simple. “When you see a good window, you see a good window,” says Siskar. He, along with COO Bruce Beach and Sales Director John Gothard will be the judges.

The grand prize will be seven days in Tavarua, while the runner-up will win seven days in Hawai’i (including airfare and lodging). Third gets seven days in Cabo San Lucas (including airfare and lodging).

The prizes will be given to the owners of the winning store, the store’s rep, and the in-house sales rep.

–Aaron Checkwood

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New Blood: SMP moves closer to surf-industry epicenter.

After SMP was sold by Ride Sports, Inc. to its Australian liscenee, questions about the brand floated around the industry. Was it giving up on the U.S. market? Who is Eugene King, president of SMP International, and new owner of the U.S. franchise? And why was the brand located way down by the Mexican border in Chula Vista, California?

Now, five months later, the answers are starting to flow. SMP will continue to cater to the surf, snow, skate, motocross, wakeboard, and BMX customer in specialty shops in the United States. Eugene King has been with the brand for eight years, and his Australian business has sales of twelve-million U.S. dollars a year.

In April, the brand announced that not only was it moving its offices to Santa Ana, California, it had hired two industry veterans–Brad Kingsley as national sales manager and Vipe Desai as marketing director–to help set a new course for the brand into the future.

“This brand has tremendous potential, and the current restructuring process is going to be an important step for positioning SMP in specialty stores across the United States,” says Kingsley.

Desai says his previous position at The Shop was a great opportunity, but he always knew he eventually wanted to grow a brand. “Both Kingsley and I are familiar with SMP and all the miscues it’s made in the past,” says Desai. “We definitely know which mistakes to avoid–which makes working with SMP incredibly exciting.”

Regarding the move, King says, “We wanted to be closer to the pulse of the market and also to have access for better resources in order to grow our brand.”

Kingsley also says the location will make it convenient for fabric suppliers to stop by the offices–an opportunity not available in Chula Vista. “Plus, we’ll be close to so many great shops–like Huntington Surf and Sport and Jack’s–that it will be really easy for me to stop by and see how things are selling. The shops can also stop by our offices for a walk through, which is incredibly important.”

–Sean O’Brien

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Summer Surf Forecast: Big Southern Hemis and Atlantic hurricanes expected.

It’s summertime and the living’s easy–or is it?

With the right combination of good weather and consistent swells, surf shops can expect bonanza-sized summer sales that make Hoss seem puny. But drought-induced Florida fires, months of So Cal June gloom, or a string of swell-free July days can leave the cash tin echoing ominously. So what do the experts say is on tap for this summer surf season?

La Niña In Effect

Characterized by unusually cold ocean temperatures in the eastern equatorial Pacific, La Niña will continue to influence our weather and waves this summer.

La Niña tends to bring nearly the opposite effects of El Niño to the United States: wetter-than-normal conditions across the Pacific Northwest and drier- and warmer-than-normal conditions across much of the southern tier.

According to Surfline Founder and Chief Meteorologist Sean Collins, La Niña will cause cooler water temperatures, more June gloom, and fewer hurricane swells than normal along the California coast.

“As far as the surf is concerned, we’re going to have a poor early season for Pacific hurricanes because the water’s too cold,” says Collins. “In late June and July, hurricanes will develop off the Mexican and Central American coasts. Unfortunately, a strong flow of cold water traveling south down the Baja peninsula will cause most of these storms to peter out before reaching Southern California’s swell window.”

Cold water and hot, dry inland temperatures will also intensify June-gloom fog along the California coast, says Collins, which may keep the typical beachgoer at home.

“Water temperatures should be in the low 60s through July,” he says. “Retailers should keep short-sleeved fullsuits and spring suits in stock. Rashguards and trunks probably won’t really move until August or September, when water temps move up to the mid to high 60s.

“The flip side is that cooler water will produce more wind swells,” he continues. “This should break up the south swells, make the beachbreaks more peaky, and spread out the crowds.”

Southern Pacific Season A “Seven”

Collins says the rare February Southern Hemisphere swell that hit So Cal makes him optimistic that more Southern Hemis will rock the coast from Central America to the Pacific Northwest.

“On a scale of one to ten, I’d say this summer is going to be a seven–maybe even an eight,” he says. “Usually, a huge ridge of high pressure forms in the South Pacific that shuts down these storms. However, early season storms are keeping the shoot open, and may prevent this high pressure from forming or may diminish its strength.”

Collins says spring Southern Hemis should be strong, followed by a flat July. But Southern Hemis should kick back in during August and September. During that same time, Pacific waters should finally warm enough for hurricanes to develop as well.

Trades Dominate Hawai’i

Collins says the spring and summer conditions across Hawai’i will be windier than normal. “The trades will be stiffer, but the same southern hemisphere swells that hit California may also hit the South Shore. The best bet calls for good swells through June. Then, statistically, things back off in July and pick back up in August.”

East Coast On Fire!

Early spring and summer is the typically dry season in Florida, but according to Vern Kousky, research meteorologist at the National Oceanic and Atmospheric Administration and director of that agency’s real-time monitoring program, the drier-than-normal conditions produced by La Niña are making this spring’s fire season especially severe in the Southeast.

“However, there are no general weather predictions associated with La Niña,” he says. “Those conditions are more associated with wintertime activity.”

The Atlantic Hurricane season will be affected by La Niña, however, and Kousky says this season should produce an above-average number of hurricanes: “In general, the cooler Pacific waters increase the monsoonal circulation of air around the globe.”

Dr. William Gray, long-range tropical cyclone forecaster at Colorado State University, concurs with Kousky’s assessment. His 1999 Tropical Cyclone Activity Forecast for the North Atlantic Basin calls for fourteen named storms, nine of which will become hurricanes. Of those hurricanes, four will be categorized as “intense storms.”

This is similar to the 1998 forecast and represents an above-average frequency trend that should continue into the next decade. The 1998 season saw the development of three major hurricanes: Bonnie, Georges, and Mitch.

Dr. Gray’s forecast also revealed coastal U.S. landfall probabilities: 200 percent of normal chance that the East Coast from Florida to Maine will be struck by a tropical cyclone, and 146 percent of normal chance that the Gulf of Mexico coast from the Florida Panhandle to Brownsville, Texas will be struck by a tropical cyclone.

“Conditions are looking very good for Atlantic hurricane development,” says Collins. “We’re already seeing some strong pulses coming off the African coast. The East Coast may be the place to be this summer for surf.”

–Sean O’Brien

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The Beach Is Back: Surfers most influenced by magazines and friends.

Early in the 90s, a change in the economy and a generation of dark and brooding teens called “X” caused a lifestyle shift that was more urban than beach.

With the new generation of teens, known as Generation Y or Millennials, surfwear manufacturers are beginning to see a resurgence of the beach lifestyle–a trend they predict will continue over the next few years.

The market used to be about wetsuits, surfboards, and young men’s surf apparel. Today, it’s about all of that plus shoes, sunglasses, watches, socks, hats, and accessories. It’s about a whole new target audience: women. It’s about a blending of cultures–skate is influencing surf, surf influencing snow, and so on.

According to Surf Industry Manufacturing Association (SIMA), surf retail sales have reached approximately two-billion dollars annually. It’s also estimated that there are two-million surfers, of which approximately 880,000 are between the ages of twelve and nineteen.

Seize The Opportunity

There are lots of different ways to learn about your target customers, their brand likes and dislikes, shopping habits, what influences them, and their lifestyles. Formal research, publications such as this magazine, talking to your suppliers if you’re a retailer, and talking to your retailers if you’re a manufacturer are all good options. But the best route to knowledge is talking directly to the kids.

According to the U.S. Census, the twelve- to nineteen-year-old age bracket will swell from 31-million today to more than 35-million by 2010 and had a reported buying power of 141-billion dollars in 1998.

Board sports have a significant influence on this target customer. In a Board-Trac study of 560 kids who surf, 89 percent said that sports influence their decision to buy a particular brand.

These same kids indicated the two primary factors in brand selection are what looks good on them (91 percent) and what’s comfortable (83 percent). Price ranked a distant third, with 58 percent of the respondents indicating it influenced their decision. These consumers are not price-oriented, but value driven.

All of this points to knowing your customers and the brands they want to buy. If you’re a retailer, with a choice of more than 200 brands on the market, making the right decision will require a little work on your part. But the best place to start is with your own customers. Look at what they’re buying, listen to what they’re asking for, and ask them what they want and why.

Keep in mind the massive changes in the industry over the past five years. Five to ten years ago, the manufacturer dictated style and told kids what was hot. Today, teens tell manufacturers what’s hot.

Don’t Miss The Market

Are you primarily catering to guys, girls, or both? If you’re not catering to girls in a big way, then it’s time you took a hard look at this market segment.

In recent articles, most surf shops reported that they’ve not only added juniors clothing to their store mix, but in many cases are devoting up to 40 percent of their floor space to meet the demand among girls.

In fact, the explosion in women’s beach sports has resulted in magazines and surf shops that specifically cater to women. All of this, of course, can be traced back to the introduction of brands such as Roxy.

Women typically shop and spend more than men. According to Board-Trac, 22 percent of the girls interviewed indicated they shop every week, only thirteen percent of the males did the same.

What are they spending their money on? Clothes and music. When asked how they would spend 100 dollars, 70 percent of the males (compared to 86 percent of the females) indicated they would spend their money on clothes. Research also tells us that women spend as much as seven dollars to every one dollar men spend. Keep in mind, however, that women are also more price sensitive than men.

Knowing your customers, their needs and wants, how they shop, and their price sensitivities are all essential in the overall marketing and promotion of your store or brand. But, equally important is making sure these consumers are aware of you, your image, value proposition, and where and how to buy.

According to our study segmented among kids who surf, 91 percent said they find out about a new line of clothing/shoes/apparel from magazines. About 74 percent were from friends, 40 percent from events they attended, 38 percent from something they received in the mail, and 37 percent said from visiting stores.

This generation of consumers promises to be the biggest, most savvy, and richest group of consumers since the baby boomers. Your long-term survival depends of your ability to identify and address this market. And you will be successful if you use this mantra for the new millennium: “Know thy customer.”

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Angelo Ponzi is the president of Board-Trac.

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Arnette Bought By Luxottica: No changes foreseen with Arnette.

Luxottica SpA, Italy’s largest eyeglass company, agreed to buy Bausch and Lomb Inc.’s eyewear brands (which includes Arnette) for 640-million dollars in cash. Luxottica owns the LensCrafter chain of optical stores and makes designer-name glasses such as Emporio Armani, Ferragamo, Persol, and Briko. As part of the deal, Luxottica also receives Bausch and Lomb sunglass brands, including Ray Ban, Killer Loop, and Revo.

Luxottica said the purchase fulfills its goal of expanding in quality sunglasses. “With this we add the most prestigious sun brands in the world to our portfolio,” says Luxottica Chairman Leonardo Del Vecchio, “We gain access to very cost-efficient, high-quality sunglass lens, and lens-coating production.”

According to Arnette Director of Marketing Gary Siskar, a main reason for Luxottica’s interest in Bausch and Lomb’s sunglass brands was that Luxottica was looking to break into different sunglass markets. There will be no changes in the headquarters, management, and production of Arnette–Arnette will be part of Luxottica but basically running itself. “We’re pretty excited about the whole thing,” says Siskar, “Luxottica is an eyewear company and its focus is eyewear.”

Bausch and Lomb recently bought eye-related surgical companies in an effort to focus more on the health-care business. According to first-quarter 1999 results, revenues from the company’s pharmaceuticals/surgical businesses were up fifteen percent from the same period in 1998, while revenues in the eyewear segment declined two percent. Last November, it publically announced that the investment banking group of Warburgh, Dylan, Reed, LLC was reviewing ownership alternatives for its eyewear holdings.

–Aaron Checkwood

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The View From SIMA: When was the last time you felt like a grommet?

The View From SIMA logo

When was the last time you felt like a grommet?

I recently had the opportunity to attend the rematch of the 1964 World Surfing Championships held in Noosa, Australia.

The original event was the first acknowledged World Championships–staged in Manly, Sydney–where the highly touted Americans lead by Californians L.J. Richards, Mike Doyle (the reigning West Coast champion), and Hawai’ian Joey Cabell came down under to challenge the Midget Farrelly-led Aussies.

It was the first event outside of the annual Makaha Championships in Hawai’i that assembled an international cast of competitors and truly signaled the arrival of surfing as an international competitive sport.

Thirty years later on the beach at Noosa, all the original men’s finalists–with the exception of the late Bobby Brown–were still in great surfing shape. Each of them were at least in their fifties–Cabell is in his sixties. It was a great emotional moment for all of us lucky enough to be in attendance.

Here I was on the beach, feeling like a stoked grommet at 45, remembering back to ‘64 when I followed this event daily in the newspaper (even cutting out the articles and sticking them in a scrapbook). It made me feel young again.

Today, when I attend a WCT event like the Op Pro I feel like a grandpa in awe of the talents of the Kelly Slaters, Shane Dorians, and Shane Beschens who lead modern surfing. It makes me realize how important events like this rematch are to our surf culture. It’s like a gathering of the tribes, and it’s important for us to acknowledge these pioneers who first captured the thrills of riding waves–all the way back to the Polynesians and the acknowledged father of the sport, Duke Kahanamoku.

In America, we have numerous surfing museums, the Surfing Walk of Fame, and events like the UCSD Cancer Center Lu’au that acknowledge the contributions of many individuals who make it possible for us to enjoy the rewards our industry provides today.

We should never forget that feeling of being a grommet. At its heart, being a grommet perfectly captures the spirit of surfing culture.

As I said to Midget after the rematch, “Geez, if they ever have a rematch for the ‘76 IPS year, I hope I surf that good.”

Actually, I think that he, Cabell, Doyle, L.J., and Mick Dooley surfed better now, 30 years later, because the boards are that much better.

Being there rejuvenated my enthusiasm for surfing every day. I feel like a grommet again!

Peter Townend

signature

President

Surf Industry Manufacturers Association

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SIMA Holds Second Summit:Surf executives descended on Cabo, were skunked on surf.

Two young Mexican locals were surfing a left point just east of Cabo San Lucas, Baja California, Mexico. Little did they know that the five gringos who paddled out and crowded their spot were executives working for the companies that made their surfboards, surf trunks, rashguards, and even their shoes they left on the beach. To these two young surfers, their spot was just overtaken by a bunch of rude, loud, aggressive, pasty, white Southern Californians content on taking as many waves as possible, primarily because the rest of the coast was flat.

Indeed, the mood at the Second Annual SIMA Surf Summit was a bit tense. For the owners, marketing and sales directors, and key managers from more than 40 different surf companies and shops who attended the Surf Industry Manufacturers Association (SIMA) get-together, warm water and long, point-break surf were major reasons to head down to Cabo for the weekend. Except there was no surf.

This actually worked to the organizers advantage because the five seminars, dinner, and keynote address from new ASP President/CEO Wayne “Rabbit” Bartholomew were actually well attended by the 70-odd people who’d made their way down to Cabo.

While the evenings consisted of many margaritas and pilgrimages to Cabo’s famous bars such as Squid Roe, the days were spent searching for surf and later relaxing poolside at the Melia Los Cabos resort drinking mai tai’s and Coronas.

But the five seminars and post-seminar discussions between the normally competing company men and women were the highlights of this year’s trip.

Seminar one focused on the changing retail environment. Hosted by Gotcha President Michael Tomson, the panel consisted of 17th Street’s Tom Brown, Spyder Surf Shops’ Dickie O’Reilly, ZJ Boarding House’s Todd Roberts, Ron Jon’s John Sabo, and Inner Rhythm Surfer Girl’s Melanie Swanson.

All the retailers said their women’s business has been growing quickly and is definitely the big news in their stores. Swanson said that 40 percent of her shop’s business is now women’s product, while Sabo said his store has had the lowest amount of markdowns in the last five years because of the new customers and their buying habits.

“We’re adding girls to our surf team, and it’s getting easier to find good women surfers,” said Roberts.

Kids was another hot category, and the panelists also discussed such topics as the shoe market, Quiksilver’s distribution, and the affect of skateboarding on the surf market.

The second seminar was on maintaining and growing surfing’s appeal to the youth. It was moderated by SIMA President and Rusty Marketing Director Peter Townend (P.T.). Making up the panel were Alan Gibby of Dynocom, Angelo Ponzi of the Ponzi Group and Board-Trac, and Bill Harper from Petersen Publishing.

Much of this discussion revolved around the importance of getting surfing back on TV on a regular basis. Gibby noted that a new surf show was just beginning on ESPN2, and the overall ratings of surfing continued to be strong, even beating such sports as ice hockey. He noted that the most-watched surf event ever was the Buffalo Kekai Classic in Makaha.

He also noted that just recently, a Wide World Of Sports surfing show in Australia was watched by 5.6-million households, or almost ten percent of that market.

Ponzi spent some time going over the different statistics that he had compiled from his Board-Trac research, including how important sports are to kids’ purchasing habits. “We asked kids if the sport they participated in influenced their brand purchases,” he said. “For the kids who surfed, 81 percent said it did, while 78 percent of the skaters also said yes.”

The third panel addressed the surf media, and was hosted by Bill Sharp, who now publishes the new publication Surf News. The panel was made up of Surfing magazine’s Michael Marckx, Surfer’s Kevin Meehan, Surfer’s Journal’s Steve Pezman, Wave Action’s Tracey Mikulec, and TransWorld Surf’s Steve Zeldin.

Each panelist discussed ways to get involved with the magazines, their Web site extensions, and even took a few pot shots at each other in jest.

Selling surfboards in the next century was the fourth topic of the event. It was hosted by Pezman, and panelists included Yater Surfboards’ Reynolds Yater, Randy Rarrick, RC Surfboards’ Ricky Carroll, P.T., and Y (the Morey Boogie inventor formerly known as Tom Morey).

Pezman opened the discussion by pointing out that current surfboard production hasn’t changed in more than 40 years, while Carroll speculated that materials will probably change in the future to produce a stronger and lighter surfboard.

“Because of the shortboard, we lost a generation of people surfing,” said Rarrick, looking at the historic evolution of surfing. “Pro surfing drove surfboard designs and trends, and most people couldn’t ride the boards that were available. Now that people are longboarding again, the sport is growing tremendously. In Hawaii, 150 girls signed up for a contest recently, and 270 women just entered a contest in Makaha. Sixty percent of the blanks from Clark Foam are supposedly longboards. The future will be about catering to the full spectrum of customers.”

Yater added that most shapers probably don’t want to see current design and manufacturing processes change because a lot of them will probably lose their jobs.

The last panel focused on the role the Internet will play in the surf industry and was hosted by Surfline’s David Gilovich. There was a special presentation from Ian Leicht, director of strategic consulting for the Internet development company Inspired Arts. He said the Internet market is growing tremendously, and in 1997 there were nineteen-million users, while by the end of this year there will be 67-million.

The panel included Ocean Pacific’s Dick Baker, Spyder’s O’Reilly, Ron Jon’s Sabo, Billabong’s Graham Stapleberg, and P.T. Most agreed that the shopping experience in the surf market was a critical part of a surfer’s lifestyle, and this couldn’t be replaced by the Internet.

“It’s hard to sell fashion over the Web,” said Sabo, who added that Ron Jon currently sells its own clothing brand on-line, but those sales are less than one percent of the company’s business.

But everyone agreed that this was an area the industry needed to continue to watch because it could affect traditional thinking about distribution and competition between retailers and manufacturers.

Back at the surf spot, local knowledge prevailed and the two locals constantly outpositioned the gringos to take the big set waves. After an hour the gringos were gone and the spot was the theirs again. Because of the SIMA surf summit, the Gringos would probably be improving their businesses over the next year, and that meant better surfboards, trunks, and clothing for the young surfers in the water that day. Little did they know.

–John Stouffer

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Point, Click, And Shop: How the Internet may change the surf industry.

How the Internet may change the surf industry.

In the near future, the biggest change in the product strategy of small, hardcore surf shops won’t be in reaction to stores like Nordstrom or Macy’s, but from the quickly developing world of electronic commerce on the Internet.

Sound farfetched? Perhaps.

But it isn’t too crazy to think of some cyber-spunked near future when anyone, anywhere, will be able to buy almost anything online. When surfers can choose from among hundreds of Web sites offering surf products. A future where manufacturers know a good thing when they see it, and sell directly to surfers.

Crazy? To some degree, these things are already happening.

Even now there are a handful of surf shop Web sites where anyone, anywhere can buy products from Da Kine, Hurley, O’Neill, Quiksilver, Reef, Roxy, Rusty, Tavarua, Volcom, and Xcel–among others.

“If I were a retailer, I would certainly be doing it e-commerce. We all know it’s going in that direction,” says one supplier of surf accessories who asked to remain anonymous. “But no one wants to talk about it openly–especially the companies. Everyone is afraid to stick their neck out and embrace it. But it’s definitely happening.”

Still A Hype-Driven Phenomenon

For the amount of attention e-commerce has received in the mass media, it’s still a surprisingly small blip on the U.S.-retail radar screens.

The Direct Marketing Association reported that last year 4.7-billion dollars’ worth of goods and services were sold online–slightly more than five percent of the 87-billion dollars sold by direct mail and telemarketing and a tiny fraction of the 2.6-trillion dollars in overall retail sales in the United States.

But everyone seems to agree that e-commerce is the fastest-growing phenomenon retailing has ever seen.

Kate Delhagen, director of online retail strategies at Forrester Research, an Internet consulting company in Cambridge, Massachusetts, pegs 1999 e-commerce sales at 18.2-billion.

This growth dovetails with the surf industry in at least one significant area: the teen shopper. Teens had a spending power of 141-billion dollars last year, and mainstream companies definitely see the Internet as way to nab a portion of this chunk of change.

For example, Nike is selling all of its high-end, cutting-edge Alpha Project merchandise on the Internet. “Teens see the Web as the arbiter of technological cool,” said Bob Lambie, creative director of Nike.com in a New York Times article. “We need to be looking for opportunities to be part of that.”

According to Teenage Research Unlimited, in 1997 four percent of all teens had purchased something on the Web. In 1998, that number jumped to ten percent–and similar growth is expected this year.

But Does It Matter In The Surf World?

“We’re totally into the Internet,” says a sales director of a surf-apparel company–once again, speaking anonymously, “but surfers want to be able to go into a shop, touch the boards, smell the wax, and talk to the cute girl behind the counter. I remember my first time in a surf shop; it was almost a religious experience. A two-dimensional photo on a computer will never duplicate that.

“However, kids are really into the Internet,” he continues. “It will be an integral part of the future–although I doubt it will enrich us as a species–and manufacturers need to be cognizant of the opportunities it presents.”

Fear Of An “E” Planet

“In this industry the distribution structure is almost set in stone,” says David Gilovich, marketing director of Surfline and organizer of a Surf Industries Manufacturers Association (SIMA) conference discussion group on e-commerce.

“Too many people have been doing too well under the current system for them to want to shake things up,” he says. “For how much we all view ourselves as being this liberal industry, when it comes down to it, we’re all pretty conservative.”

According to Peter Townend, SIMA president and Rusty sales and marketing director, the e-commerce discussion at the SIMA conference may give the industry a common perspective about the entire issue.

“There’s currently a lot of emotion about e-commerce in the surf industry,” he says. “I think we’ve figured out that what happens with e-commerce won’t be determined by the surf industry. It’s out of our hands, and it’s not a question of when, it’s a question of how.

“A lot of the leaders in the surf industry come from the pinball era, not the Sega era,” he continues. “Their minds don’t work like the minds of kids, who don’t need to read an instruction manual to figure out how a computer program works.

“E-commerce is nothing more than mail order on steroids, but I think with the millenium coming, a lot of people are anxious about how technology may change society.”

And some of these anixeties are based on very valid concerns within the surf industry.

“We’re very reluctant to get involved with e-commerce,” says Tom Holbrook, executive vice president of sales for Quiksilver. “There’s not a lot of control over what could happen globally down the road. There’s a real danger of brand overexposure. Because of that–just as we approve each brick and mortar store–we’ll approve the sale of Quiksilver products on a select number of Web sites based on the look and vibe of the site.”

Quiksilver does have its own extensive Web site (found at www.quiksilver.com), but its purpose is strictly marketing, not sales.

Holbrook admits that e-commerce is increasingly a topic of conversation with retailers: “They don’t want to be left in the dust. We all laugh, but the change to e-commerce is like the change from the 8-track to the CD, but on a bigger scale.”

According to Colin Baden, Oakley’s director of design, “Change is the number-one reason people are worried about e-commerce. If you’re not comfortable thinking outside the box, you’ll be afraid. If you spend your life living outside the box, you’ll run at it like a madman and go like hell.”

However, Baden recognizes the concerns some Oakley dealers have about the company selling directly to consumers. “We certainly have a number of retail accounts that have a long-standing relationship with us,” he says. “The last thing we want is to create competition for those accounts.”

Oakley does sell shoes, watches, and accessories on its www.oakley.com Web site, but not its sunglasses.

“We’ve been an eyewear company far long longer than we’ve been a watch, apparel, and footwear company,” says Baden. “Because of that, we have certain relationships that precludes us from selling eyewear directly to consumers. However, that’s not an issue with footwear, watches, and some accessories. Our volumes are fairly low, so the chance of Oakley.com taking business away from our retail accounts is fairly small.”

You still can buy Oakley eyewear online at eyevault.com, however. “We elected to choose one high-quality on-line account to partner with. Our philosophy is selective distribution, and we use that same criteria for e-commerce as well.”

Some surf companies are not opposed to seeing their products sold online–as long as it’s being done by a “good” group of people.

“It seems like I’ve been in this industry 1,000 years,” says the anonymous surf-apparel source. “Everyone knows who the assholes are, and you’re super careful about who you sell to. But really, there’s just as much possibility to get screwed in a surf shop as there is on the Internet. We handle everything on a case-by-case basis.”

This gut-feeling approach is also used at the surf-accessories company: “We pretty much have an open policy,” says the source. “When a shop calls us up and asks if they can set up an online shop, we generally say yes. However, it also depends on the account, so we don’t have a uniform ‘yes’ policy. We want to have the ability to say no as well.”

A Look Inside

Quite a few surf companies seem to trust Becker Surf & Sport to sell their product online. According to the Becker Web site (found at www.realcat.com/catalogs/becker/), “We are damned and determined to make this the first and the best surf and sport superstore on the Web. Well, I guess we are already the first. We will add ten items a day until we drop, or our wives leave us–at which time we’ll add 25 items and surf a lot more. This stuff is in our warehouse and stores right now and is ready to ship!”

Becker President Dave Hollander says he generally won’t comment on his Web site or its success. “We decided when we started not tell anyone how it’s doing. Only three people in the company actually know how much business the Web site takes in,” he says. “I generally will only tell people that I work on the site for six to seven hours each day.”

Hollander says this secrecy is necessary. “I can go into one of my competitors’ shops, and tell you pretty accurately what their sales volume is. However, sales volume on a Web site is impossible to determine.”

Hollander does have these words of warning about e-commerce: “I have more than 800 pieces being sold online, but I’m really selling fashion. Everyone has a pretty good idea of what a shirt will look like when you’re wearing it and how it will fit. And I’m pulling my inventory directly from the shop floor, so my inventory risk is minimal.

“However, if there were twelve of us doing this, there wouldn’t be enough sales to go around–for now at least,” he continues. “As soon as that happens, I’m out. I won’t play that game.

“Another big consideration is that there’s not a single manufacturer who will stand for an online price war on products, so gouging prices is not the way to establish yourself.” However, when asked if his prices online were the same as in his four shops, he declined to comment.

The Human Touch

It won’t happen overnight, but e-commerce will significantly change retailing–including surf retailing. For now, however, most manufacturers in the surf industry appear content to hang back and watch things develop.

Oakley sells products online, but Baden says 80 percent of orders are still taken over the phone. Consumers shop online, but they do want to talk to another human when they fork over the cash.

And brands within the surf industry have a unique and dynamic message to tell consumers about their company. “We don’t want a third party telling consumers our story,” says Holbrook. “We want to be in the shops working with the staff to make sure it’s done right. Plus, there’s no return on investment right now for shops. If someone thinks they can launch a Web site and rack up a bunch of sales on a foggy day, that probably won’t happen–and it may not happen for a long time.”

Until the lifestyle of e-commerce takes hold, it’s stillmore hype than substance. But make no mistake, change is coming. Deny it,and you may be left behind.

biz_editor

Amateur Surfing Is Dead: How can we give it new life?

Amateur surfing in the United States is in deep trouble: teenage competitors pulling in huge contracts and driving luxury cars, the absence of a clear step-by-step process to prepare tomorrow’s surfers for the rigors of life on the ASP pro tour, an acronym stew of organizations corporate sponsors find confusing, the U.S. amateur team’s woeful sixth place at the World Surfing Games. These are just a few of the symptoms.

Who’s to blame? The amateur organizations? The youth-enthralled surf media promising fame to young surfers? The companies that use twelve-year-old amateurs in their ads? Or can we pin the blame on basketball superstar Michael Jordan?

That’s right, one theory is that Michael Jordan and the Dream Team killed amateur surfing in America. The college basketball stars representing America at the Olympics kept losing, and Michael Jordan and his pro cohorts had to bail the U.S. out. The amateur sports movement was never the same.

“There’s no longer a difference between amateur and pro,” says Pierre Camoin, operations manager for the International Surfing Association (ISA), the sanctioning body for the World Surfing Games. “We follow Olympic rules,” Camoin says, referring to the lack of distinction between amateur and pro.

Amateur surfing is hurting and nearly dead. What are the solutions?

Meet The Players

Four major organizations are involved with amateur surfing in the United States, and all have suggestions about how to right the current situation.

The United States Surfing Federation has 10,000 members and includes at least five different amateur organizations, including the Eastern Surfing Association (ESA). The ESA is the largest and oldest stand-alone organization, with 6,000 members, 26 offices, and three regions stretching from Maine to Florida.

The National Scholastic Surfing Association (NSSA), with its 2,000 current members, has been the launch pad for many U.S. pro surfers and runs more than 80 surf contests nationwide.

The Surf Industry Manufacturers Association (SIMA) represents the interests of America’s surf industry and includes 200 manufacturers and distributors of surf-related product.

Finally, the International Surfing Association (ISA) is the governing body of the World Surfing Games (formerly the World Amateur Surfing Championships) and is lobbying the International Olympic Committee for the inclusion of surfing as an Olympic event.

Too Much Pressure, Not Enough School

In 1977, if a top West Coast amateur wanted a pro career, they started with regional Western Surfing Association contests. A high ratings finish meant they surfed in the Western Regionals and U.S. Surfing Championships, and a high placing in the Championships and team trials gave the surfer a spot on the World Team. Back then, doing well in the finals of the World Contest was more than the pinnacle of an amateur career–that’s what defined it.

Surfers knew where they stood in the competitive hierarchy and had a clear idea of what their next step was. That’s not the case today.

Ask Joey Buran. In 1977 he was working his way up the ladder. Back then, amateur surfers didn’t have travel funds or own luxury cars–things that concern Buran about today’s crop of amateur surfers.

“How does it help a junior in high school to worry about 50,000 dollars when he should be worrying about school?” asks Buran, who is one of the USSF’s new U.S. National Team coaches along with former pros and current surf-industry players Mike Lambresi and Mike Parsons.

What’s Buran’s solution? Involve the industry, associations, and competitors. Persuade them to limit what amateurs receive from sponsors, restrict pro-am event earnings, and monitor the use of amateurs in advertising.

Randy Meistrell is part owner of Body Glove, which has been a sponsor of the NSSA for ten years. Up until the 90s, every U.S. champ wore Body Glove suits at one time or another because the company sponsored the national team.

Body Glove wants to see more support for younger talent earlier, but Meistrell is adamant about making surfers prove themselves through their school grades. “Companies should be looking at report cards,” he says, pointing out that he doesn’t want to see hot surfers ending up working at gas stations because they neglected their schoolwork.

“Everybody has to do their part,” says Lambresi, who blames the negativity within the surf industry for the current state of amateur surfing.

Marketing is 99 percent of the business, he says, but instead of focusing on the bad, the industry needs to learn from past mistakes. To him the United States Surfing Federation is the governing body, but on a worldwide basis he sees the Olympic governing body as setting the rules–and consequently loopholes–amateur surfing is using.

“Kids are coming into the pro ranks with a lot of money, and they’re being pushed–pushed to the point of not enjoying it,” says Lambresi. “Kids have got to be kids.” The pressures of sponsorship can drive young amateurs to hate surfing in a couple of years.

Is Surfing America The Answer?

Peter Townend was the U.S. amateur surfing team coach when Tom Curren and Scott Farnsworth won their respective world amateur titles–a definite high-water mark for U.S. amateur surfing.

The ex-patriot Australian watched as his American team won in his hometown of Coolangatta in 1982. “I took a pile of shit from my countrymen,” laughs Townend. “The headline of the local newspaper was ‘Townend A Turncoat.’”

When the Americans won, the Australians created the Surfing Australia association to promote the sport on a cohesive nationwide level. Today, it’s partially credited with Australian dominance on the pro tour and the recent win at the World Surfing Games in Portugal.

Townend, president of SIMA and marketing director for Rusty, saw the success of the Australian program and sought to duplicate it here in the U.S. The result was the launch of Surfing America in 1997.

Townend says the industry isn’t to blame for the poor results of the U.S. team at the Worlds. The previous year in Huntington Beach, Taylor Knox won the overall title and Bobby Martinez was the top junior and one of the most successful surfers in NSSA history–both should have been in Portugal when the Americans placed sixth. Were they expected to put themselves through the USSF trials?

He makes the point that although the industry didn’t pick the team, the industry could’ve given the team money–but they still would have lost with the surfers who competed. “If the seppos Americans want to be the best in the world, they the associations all need to get on the same page,” says Townend. Amateur competitors need a “road map,” with the primary goal being a high-placed finish at the World Surfing Games.

To do that, Townend says the organizations should rethink their aims. He says “amateur” is an irrelevant term today, the rules are dated, and the “old hard-liners don’t see the forest through the trees–and they ought to be looking.”

What About The Ads?

Kathy Phillips, executive director of the Eastern Surfing Association (ESA), says surf companies have been using the ten-, eleven-, and twelve-year-old ESA amateurs in magazine ads to sell product with nothing coming back to the ESA–the ESA is giving exposure away.

In the past, if a company wanted to use an amateur in advertisements it paid fees to the amateur organization the competitor surfed in. The NSSA was first to lift this payment stipulation, and the USSF doesn’t start enforcing it again until July.

The lax enforcement of this rule has forced the ESA to send out warnings to competitors to look out for themselves and the possible ramifications this type of sponsorship may create.

“As the world’s largest amateur surfing organization, I believe the ESA occupies a unique position to influence perceptions of what amateur athletes should be,” says Phillips. “I personally believe that professionalism is distinct from amateurism, and that however much the difference may blur, it’s important for us to attempt to maintain that distinction.”

The NSSA Does It Their Way

NSSA Executive Director Janice Aragon says surfing has changed drastically since she was World Amateur Champion in 1984.

The NSSA parted ways with the USSF (the designated federation responsible for the World Games Team and Trials) due to a question of fairness. For Aragon and the NSSA to send their surfers to the USSF trials again, she says a separate, nonpartisan entity would have to structure the trials and selection process.

She believes that with the NSSA involved, the industry would be more responsive to sponsorship opportunities and encourage their professionals to get involved. Until then, the organization’s main focus is building champs at the NSSA Nationals.

Aragon says there aren’t too many other sports like surfing, where athletes become professionals right out of high school. That’s why keeping kids in school is important to the NSSA, and any competitor who wants to surf in the College, High School, or extremely competitive Open Nationals must have at least a 2.0 grade-point average.

While Aragon says there are some surfers who are handling the pressures of the “new” amateur surfing, there are also plenty of spoiled kids. They can’t handle success because there have no aspirations left. Easy money gives them nothing to work for, she says.

Aragon doesn’t know how much young surfers are making from their sponsors; she says the amateur organizations currently have no way to police this practice when it occurs. For amateur surfing to really succeed, she says companies need to unilaterally agree not to pay kids under the table.

With all the junior pro-am events surfacing, Aragon isn’t sure how much longer it will be before the NSSA starts offering prize money. NSSA rules had the limit on amateur earnings at 16,000 dollars a year–a rule the association erroneously believed was still in the ISA rulebook.

Since the NSSA follows ISA rules, that organization may embrace several rule changes next year that have been contrary to amateur sports until now–like contest prize money. In response to questions about more professionals entering the NSSA Explorers Non-Student Division, Aragon says, “Bring it on.”

The USSF Rebounds

“The USSF would love nothing more than to see the NSSA send representatives to the U.S. Championships and World Games Trials,” says USSF Competition Director Paul West.

After a gradual deterioration of the enforcement of it rules, the USSF will go back to a strict definition of the amateur code in July. “We have a responsibility to our 10,000 members because it’s what they wanted,” says West.

The USSF plans to create an amateur-only national team with trials to be held during the U.S. Championships in July. They also plan on continuing to lobby the ISA to return the World Games to amateur-event status.

“The World Games was a pinnacle taken away from amateurs all over the world,” says West. Until then, he says it’s the USSF’s responsibility to pick the best Dream Team of surf professionals it can to enter the World Games.

Choices

As ESA Director Kathy Phillips puts it, the parallels of the surfing and basketball worlds are obvious and undeniable: “You simply substitute Kelly Slater for Michael Jordan and Quiksilver for Nike.”

Like basketball, money is making many of the decisions in amateur surfing. Young amateurs are far less expensive to sponsor than professionals, and amateur surfing is suffering as a result.

For the U.S. surf industry to reach its true potential, the questions surrounding amateur surfing can’t be ignored. Either we return to a truly amateur system or we move forward together with a new outlook and approach. But if we keep standing still, we’re just a target in the middle of the road.

biz_editor

The Beach Is Back: Surfers most influenced by magazines and friends.

Early in the 90s, a change in the economy and a generation of dark and brooding teens called “X” caused a lifestyle shift that was more urban than beach.

With the new generation of teens, known as Generation Y or Millennials, surfwear manufacturers are beginning to see a resurgence of the beach lifestyle–a trend they predict will continue over the next few years.

The market used to be about wetsuits, surfboards, and young men’s surf apparel. Today, it’s about all of that plus shoes, sunglasses, watches, socks, hats, and accessories. It’s about a whole new target audience: women. It’s about a blending of cultures–skate is influencing surf, surf influencing snow, and so on.

According to Surf Industry Manufacturing Association (SIMA), surf retail sales have reached approximately two-billion dollars annually. It’s also estimated that there are two-million surfers, of which approximately 880,000 are between the ages of twelve and nineteen.

Seize The Opportunity

There are lots of different ways to learn about your target customers, their brand likes and dislikes, shopping habits, what influences them, and their lifestyles. Formal research, publications such as this magazine, talking to your suppliers if you’re a retailer, and talking to your retailers if you’re a manufacturer are all good options. But the best route to knowledge is talking directly to the kids.

According to the U.S. Census, the twelve- to nineteen-year-old age bracket will swell from 31-million today to more than 35-million by 2010 and had a reported buying power of 141-billion dollars in 1998.

Board sports have a significant influence on this target customer. In a Board-Trac study of 560 kids who surf, 89 percent said that sports influence their decision to buy a particular brand.

These same kids indicated the two primary factors in brand selection are what looks good on them (91 percent) and what’s comfortable (83 percent). Price ranked a distant third, with 58 percent of the respondents indicating it influenced their decision. These consumers are not price-oriented, but value driven.

All of this points to knowing your customers and the brands they want to buy. If you’re a retailer, with a choice of more than 200 brands on the market, making the right decision will require a little work on your part. But the best place to start is with your own customers. Look at what they’re buying, listen to what they’re asking for, and ask them what they want and why.

Keep in mind the massive changes in the industry over the past five years. Five to ten years ago, the manufacturer dictated style and told kids what was hot. Today, teens tell manufacturers what’s hot.

Don’t Miss The Market

Are you primarily catering to guys, girls, or both? If you’re not catering to girls in a big way, then it’s time you took a hard look at this market segment.

In recent articles, most surf shops reported that they’ve not only added juniors clothing to their store mix, but in many cases are devoting up to 40 percent of their floor space to meet the demand among girls.

In fact, the explosion in women’s beach sports has resulted in magazines and surf shops that specifically cater to women. All of this, of course, can be traced back to the introduction of brands such as Roxy.

Women typically shop and spend more than men. According to Board-Trac, 22 percent of the girls interviewed indicated they shop every week, only thirteen percent of the males did the same.

What are they spending their money on? Clothes and music. When asked how they would spend 100 dollars, 70 percent of the males (compared to 86 percent of the females) indicated they would spend their money on clothes. Research also tells us that women spend as much as seven dollars to every one dollar men spend. Keep in mind, however, that women are also more price sensitive than men.

Knowing your customers, their needs and wants, how they shop, and their price sensitivities are all essential in the overall marketing and promotion of your store or brand. But, equally important is making sure these consumers are aware of you, your image, value proposition, and where and how to buy.

According to our study segmented among kids who surf, 91 percent said they find out about a new line of clothing/shoes/apparel from magazines. About 74 percent were from friends, 40 percent from events they attended, 38 percent from something they received in the mail, and 37 percent said from visiting stores.

This generation of consumers promises to be the biggest, most savvy, and richest group of consumers since the baby boomers. Your long-term survival depends of your ability to identify and address this market. And you will be successful if you use this mantra for the new millennium: “Know thy customer.”

–––––––––––––––––

Angelo Ponzi is the president of Board-Trac.

biz_editor

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