The prevailing trend that has emerged from recent earnings reports is retailers’ emphasis on prioritizing core products, core customers and customer loyalty. Although not entirely new, these three elements underscore another year of “survival of the fittest.” Solo Brands, an outdoor lifestyle-focused company, is embracing this narrative and endeavoring to align itself with consumer values.
Solo Brands owns a portfolio consisting of men’s apparel brand Chubbies, outdoor products company Solo Stove, Oru Kayak and paddle board brand ISLE. In an interview with PYMNTS, Solo Brands CEO John Merris shared the company’s plans for the future in response to ongoing macroeconomic shifts and their impact on consumer spending.
“It obviously looks a little bit different by brand, but overall, I’d say that what we’re looking for is better real estate in stores. And more prominent displays in merchandising,” Merris said.
The idea mirrors the sentiment expressed by Dick’s Sporting Goods last month regarding consumer behavior. Despite reducing spending on non-essential items, consumers continue to prioritize their health and well-being, which has been a prominent trend since the onset of the pandemic, and Dick’s says it has benefited from this trend.
“We’ve seen a shift in consumer behavior where they are prioritizing athletic endeavor sports, health and active lifestyle, and they’re prioritizing Dick’s in order to meet those needs,” Dick’s Sporting Goods CEO Lauren Hobart said on a call with analysts.
Furthermore, since consumers are seeking more in-person experiences, Dick’s Sporting Goods aims to utilize its physical presence and introduce a contextual commerce experience in its brick-and-mortar stores. The company intends to expand by introducing 20 new Dick’s House of Sport concept stores, which offer rock-climbing walls, batting cages, and putting greens to enhance the customer experience.
See also: Omnichannel Athletes Make Sports and Fitness Spending a Top Priority
That’s a place where Merris wants his brands to be. He said Chubbies is intensifying its focus on in-person sporting goods experiences.
“If you were to go into a Dick’s Sporting Goods store now and look at the men’s feature swim wall. You’d know exactly what I’m talking about,” Merris said. “But we’ve been able to pick up prominent real estate and pick up more stores and more real estate within those stores to be able to bring more awareness to our products.”
Chubbies and Solo Brands’ decision also follows a trend that has emerged over the past 18 months, wherein retailers have faced significant inventory challenges due to the COVID-19 pandemic. As a result, many retailers are attempting to stock fewer products that are in high demand, resulting in a reduction in their SKU counts. This trend has created an opportunity for companies with strong brands and popular products to become attractive options for retailers looking to reduce their inventory risk.
Dick’s Sporting Goods has benefited from this trend is and has had success by partnering with trusted and popular brands, seeing the value in carrying fewer products that customers want, as opposed to carrying a large inventory of products that may not sell. This strategy has enabled them to remain profitable while minimizing risk.
But there’s more to claiming space in-store.
Solo Brands’ entire product portfolio strives to reach an affordable price point, while also complementing various aspects of a consumer’s outdoor lifestyle.
In the case of Solo Stove, the company has developed a range of accessories that complement its fire pits, including fire pit stands for use on wood decks or grass, spark arrestors for safety concerns and covers to protect against weather. Solo Stove also sells roasting sticks for customers who want to roast marshmallows or hot dogs.
The company’s kayaks also come with a range of accessories such as life jackets and lights to make nighttime kayaking safer and more enjoyable. These accessories have been a significant driver for repeat purchases, along with product extensions such as the Pie Pizza Oven, which opens up a new category of products for customers to add to their Solo Stove suite.
And as Solo Brands looks to expand its assortment, it leverages social media.
The company places great importance on customer feedback in its business strategy, having established a direct-to-consumer (D2C) relationship from the beginning. This approach enables the company to interact with customers frequently and conduct surveys to gather feedback on its products.
One of the most valuable sources of feedback has been social listening, which provides unfiltered and honest feedback. This feedback has been instrumental in influencing product innovation and driving the launch of new products and accessories. The company claims that most of its new products and accessories have been launched in response to customer feedback, either direct or indirect. By listening to customer needs and addressing pain points, the company has been able to improve its batting average for successful product launches.
The firm is also focused on sustainability.
“We have spent a lot of time finding viable solutions for both recycling and or reselling of used product to ensure that we have a sustainable model,” Merris said.
The company’s two biggest brands, Solo Stove and Chubbies, move the most volume and have dedicated programs in place for recycling and reselling. The return policy for Solo Stove ensures that all returned products are either recycled or resold, with the stainless steel being recycled and the remaining products in good enough condition to be resold. The same holds true for Chubbies, and the company takes pride in this initiative. While not the most cost-effective approach, the company views it as a worthwhile endeavor.
“I think that the consumer is going to continue to be pretty volatile and unpredictable,” Merris said. “Every time we feel like we’re kind of in the clear, something else significant happens. I don’t even know what to predict to happen. But my prediction is that there’s going to continue to be events that create uncertainty, and some amount of fear in consumers which is going to impact consumer spending, especially discretionary spending.”
But while Solo Brand anticipates the consumer market in 2023 will be characterized by uncertain and erratic behavior, the company is optimistic that brands that prioritize delivering positive customer experiences and offering value will have a competitive edge.
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