Outdoor Insight

WHEN MOST PEOPLE THINK ABOUT THE merchandise carried by outdoor retailers, their thoughts turn to tech and gear, from tents and back- packs, to kayaks, mountain bikes, snowboards, camp stoves and more. But it's the products designed to haul all that equipment — racks and cargo boxes — that hold tantalizing potential for many retailers. The estimated wholesale sales in the rack/carrier category per year in North America is between $300 and $400 million. The margins are good, so that equals close to $700 million a year in retail sales. That is big business and it has had steady growth of approximately four to five percent over the last five years. But the rack department, in many cases, does not get the attention it deserves. Top-Selling Categories Many people are into a variety of sports and have the challenge of hauling bikes plus a couple of kayaks or SUPs with them. A dilemma for many consum- ers is that so many are driving the smaller cars and compact SUVs today. With smaller interior cargo capacity, there is a growing need for car top racks, cargo boxes, hitch mounted bike carriers or a com- bination of these to take it all with them. The top-selling products are bike racks — car top racks, trunk lid racks and the popular hitch mounted racks. Car top racks are in decline, while the hitch- mounted styles are increasing, mainly due to the ease of loading and unloading bikes. The next top sellers are cargo boxes. They are popular because of the amount of gear they hold and that the items are locked up safe and dry. With the new easy latch systems to mount the boxes to factory roof racks, they are quick and easy to put on or take off. The top two brands in this category, with almost 85 percent of the market, share are Thule and Yakima. Thule being the larger of the two. There is compe- tition from companies that build hitch mount bike racks that can be used on any SUV or truck that has a receiver hitch. Some of the other companies selling racks are Kuat, Malone, Rhino Rack, Rocky Mounts and, in the mass-market channel, Allen and Bell. There are also specialty companies like Space Trailers, who make towable trailers specifically designed to haul outdoor gear. Retail Competition While most regional sporting goods chains and outdoor specialist stores stock at least one rack brand, it is surprising the number of outdoor stores that do not stock racks or cargo boxes. This could be due to a lack of space, or concern on the amount of inventory required to do it right. Whatever the reason they are passing up a huge opportunity for tie-in sales. In many cases consumers spend just as much or more for a rack, cargo box or system than they have spent on the gear they are hauling. Outdoor retailers selling racks and cargo boxes have some competition in the retail space. These include: Rack Specialty retail. These dedicated specialists focus on racks and systems for hauling cargo. Rack Attack and similar chains are known for having a great selection in stock, knowledgeable staff and on-site installation and customized adaptations. Mass merchandisers and the discount channel. This group has had limited success selling this category. Mainly due to the fact that they will only stock a few limited, lower prices items, and no service for the customer. The main items that they sell are the hitch mounted bike and cargo racks that are not vehicle application specific. Auto Dealerships. This group is starting to wake up to the fact that there is a real opportunity to add on to the vehicle sale and make a significant margin by lumping rack systems and cargo boxes into the loan. The ones that have done the best are auto brands and dealers that have partnered up with Thule or Yakima. Consumers want these well-known brands instead of a generic product. Online. There is a significant channel shift to online that is undeniable — even cargo boxes are being shipped to consumers. The process online can be made easier with consumers able to shop by type of activity or by a specific vehicle. They can then make sure the racks they buy will fit the car they have. Q Ron Menconi was SVP–merchandise and marketing for G.I. Joe's for more than 10 years. He is currently president of Menconi Consulting, which works within the sports and outdoor industries at retail and whole- sale. He can be reached at ron.menconi@gmail.com August 2018 • Outdoor Insight • 41 outdoorinsightmag.com Unlocking the Potential of the Rack Business. CAR RACKS & rack ro l l The key to success in the rack business is making a real commitment to the category and a partnership with the brands. Without going "all in" on the rack category, it is hard for a store to see success in it. Some tips for retail success: Use displays and point of purchase materials from the brands. On the sales floor, use the brand's online configura- tor to make sure to have the right parts for specific vehicles. Carry more than one brand in depth to give the customer the best possible selection and make the store a destination for the category. Make a real investment in inventory and stay in stock. (Nothing is worse than losing a $500 sale by being out of one part of a system). Have trained staff who can also assist installing the product if necessary. Promote the category in all types of media and focus on brands, selection and service. Stay on top of trends. As this category matures there will be opportunities with new sports and products like roof rack tents and trailers. Be mindful of challenges from broader distribution, margin erosion from online competitors and keeping up with a fast-changing auto industry. How To Rack Up Sales

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