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Case Study | How evo Scaled Specialty Retail with ‘La Familia’ Network

8.-Antonio-and-BrycePhillips
EVO FOUNDER BRYCE PHILLIPS

evo Founder Bryce Phillips leverages strengths of like-minded retail partners to create ultimate “customer-focused” network

evo has always had a forward-thinking business model, ever since Bryce Phillips conceived the idea for an online snow-specific sales hub in between sleeping on friends’ couches and making skiing his number one priority.  It was a time when very few in the space were dabbling with e-commerce, and Phillips was able to first build his evo store online, and then convert it into what is today: two very successful brick and mortar locations.

Fast forward 11 years later, and Phillips is still innovating. This time, he’s taking a look at the opposite end of the spectrum—and a pretty huge conundrum facing specialty retailers everywhere: how can small, independent brick and mortar shops compete with the likes of online e-tailers when it comes to the ease, convenience, and an infinite product selection e-commerce offers?

What has now been the culmination of several years worth of brainstorming, like-minded industry conversations, and late nights at the drawing board, La Familia was unveiled earlier this year by Phillips and his team at evo. It is, as Phillips describes it, an extension of what the retailer has always stood for.

“Community, for us, is everyone within this industry and beyond, and what we really love about this is it ties back to our DNA, and the perception of community, not just from a customer perspective but from a specialty retail and vendor perspective,” says evo Founder Bryce Phillips.

The basic idea for creating a specialty retail network was to seamlessly integrate the strengths of partner shops with evo’s own strengths, creating something of a “super network” with a strong customer-focused approach.

The La Familia platform will allow evo to work with like-minded shops and communities across the entire country, not just in the Pacific Northwest, where they’ve built evo’s permanent locations. The basic idea for creating a specialty retail network was to seamlessly integrate the strengths of partner shops with evo’s own strengths, creating something of a “super network” with a strong customer-focused approach. In other words, beyond just e-commerce and in-store transactions, how can these retailers collectively build the best customer experience—from selection, to convenience, to everything else in between that’s part of the consumer purchasing experience.

The network gives evo and its partner shops some attractive strengths, that alone they would not be able to provide, including:

  1. Give customers the freedom and convenience of returning products bought online to any local shops in the network.
  2. Provide a solid network of shops and experts on the ground, giving customers an additional in-person location to bounce ideas around, get their gear set up properly (even if they order it online) and feel like they’re part of a local community.
  3. Conversely, allow shop employees to draw on a diverse network of suppliers to track down the exact product a customer is looking for, even if it’s not carried in their store.

“It's a little counter-intuitive for people to see us advertising these stores, but we think that highlighting the great places on the ground that you can go is a great service to the customer,” Phillips explains.

The concept has caught on and so far La Familia has nine partner shops, from Killington, Vermont, to Denver, and several other locations in between. Phillips has brought on Ben Wallace, an industry vet who most recently served as K2’s former VP of Sales, to head up and build out the retail network. We sat down with Phillips and Wallace to examine exactly how this new model could impact the fate of specialty retail.

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INSIDE EVO’S PORTLAND, OREGON LOCATION.

BACKGROUND | WHY DID ALIGNING WITH MULTIPLE SPECIALTY RETAILERS TO CREATE A MULTI-CHANNEL PLATFORM MAKE SENSE?

BP: Time and time again it’s about differentiation, and with our stores, we feel like we can deliver something really different and compelling to our customers. While the web is important, the ability to round out that experience with great stores is pretty critical. And so, that sets the stage for us opening great stores in great locations, Denver being the newest one. It’s so important to have a presence in retail—we've all acknowledged that—but it still begs the question: "Well how does it work?"  especially with being able to deliver the experience, the passion, the presence in the community, and at all of these different locations. We aren't trying to be everywhere for everybody, from a brick and mortar perspective, we want to go slowly but surely, and really be able to deliver when it comes to the stores that we do open.

The idea for building out this network of specialty retailers, we call La Familia, originally came from an experience I had with coming up on a shop that I thought was really cool, and thinking "You know what, this is an amazing thing, and they do something so important for this community, and we've connected a lot of dots here, but how can we be connecting that final dot for customers in rounding out the experience with a great partner store?”

The network will allow customers to return products bought online to their local shops, get additional advice and help setting up gear, and conversely, allow shop employees to draw on a diverse network of suppliers to track down the exact product a customer is looking for, even if it’s not carried in their store.

BW: There's this recurring situation, if you will. There's growth in commerce, and then there's challenging aspects for the brick and mortar retailers, and so the idea of finding a way where both sides can work together is critical. The basic idea is seeing the customer as less of a thing we're competing for, and really more of, how can we each serve that customer differently?

We understand that more and more, customers are seeking convenience, and that's why they're buying online. They're thinking selection, and all the other factors that are going into making that purchase, but like Bryce said, we can't always provide the after-sale support that— especially when it comes to snowboards, skis, and bikes—many of these purchases require. On our partners' side, in all these neighborhoods where we're working, there's a lot of business that's happening right now more or less behind their backs. It's been happening online for years, and there’s almost a denial of its existence, and a real fight against it. A better approach is to accept what's happening, and think "Well how can we get those cutovers, that are for whatever reason, not buying it in our store? How can we get them at least to come by?” We need them, and then we can provide all the support and service and information and community and culture that's so important, that evo can't really provide in others neighborhoods. It gives those businesses not only that opportunity to make a service sale, or an additional sale, but gives them a chance to just bring the customer into their store. In some cases, its gives us a model that businesses should start focusing on more: Less on the direct product transaction, and more on the services, more on events, you name it. And we can talk for hours, but the idea is, both sides really looking and saying: Alright, there's a customer here, let's both give them the best experience possible, and I think either side can offer something that the other side can't.

…While we could think about it as "losing a sale," like "oh shoot, we sold someone a Burton snowboard, and they delivered it to their closest neighborhood store, and now they bought bindings from them." Well, we trust that as a result of creating a better customer experience, we'll create more loyalty with our customers within the network, and that will drive conversions.

BP: We all look at a few metrics. One is traffic, the next is conversion. There’s also average order of value, then you have margin, and we have others. But the fundamental view is you can't convert a customer until you drive traffic. So, if we're driving traffic in to the front door, then by default there will be some level of conversion in those stores, and driving traffic is so critical. We're not just driving traffic, we're driving the most qualified traffic you can get, as a result of them either delivering a shipment there, or highlighting the value in what that retailer does on the ground. And for us, while we could think about it as "losing a sale," like "oh shoot, we sold someone a Burton snowboard, and they delivered it to their closest neighborhood store, and now they bought bindings from them." Well, we trust that as a result of creating a better customer experience, we'll create more loyalty with our customers within the network, and that will drive conversions. So once they're on our site, and they see that we work with these companies locally, it's more likely that they'll transact with us. Whether it be our own store, or a partner store, we can serve you on the ground now, and the web.

BW: And just to back it up, because I think it's super interesting: When you look at our own stores, in Seattle and Portland, the number of people that choose to buy online from those markets and choose to pick up in store, is anywhere from 30-40 percent, depending on the time of year.

BP: And that's without any incentive, we don't give people any. It's just such a traffic driver, and we know that customers want it, but in a lot of markets we can't provide that. So we might be sending them a Union binding and a Capita board, and that's just a dead end. "Here's your board and your bindings, now figure it out." Why we're not sending them into a trusted place so they can really get that great customer experience, that's been the thing that we've been trying to solve for. What we see at the end is it's much better for everybody involved.

 

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SOLUTION | HOW DOES LA FAMILIA WORK?

BP: The tricky thing about specialty is you can only invest so much in inventory, and we've seen that time and time again, especially if you don't have a site, or if you don't have a model to draw from. On our end, we are allowing our partners to not have to carry the inventory and still get a percentage of the revenue. And it's not just a percentage of revenue, it’s allowing them to save the sale, and deliver for a customer.

What we've been talking about lately is this idea of scaled specialty retail. Specialty has often been everyone is on islands. So how do we organize and work together to create specialty at scale, so that we can leverage it?

There's a number of other layers. There's us helping out retailers with their end of life [for products], like how do they end up getting rid of inventory at the end of the year. If we have a special release with a brand; say Nixon called us and was like "We have this amazing new product, and we want to drop it into the best retailers across the nation, we want to be on the web in the major cities," well, we'd have them covered with evo and our La Familia network. I mean there are just so many different ways we can leverage this in the network, once it's in place, but we really see it as being that organized force. What we've been talking about lately is this idea of scaled specialty retail. Specialty has often been everyone is on islands. So how do we organize and work together to create specialty at scale, so that we can leverage it?  We can be on the web and drive traffic, but a lot of small retailers aren't going to be able to get that, and then they start doing something important that we can't do, which would be on the ground and be fully immersed in those communities.

BW: We have all theses stores highlighted right alongside our own stores on our locations page on the site, so they're getting directions, contact info, promotions. It’s a great way of showcasing this partnership.

So how does it work, from a logistics standpoint?

BP: If you're in our cart when you're checking out,  you are able to select where you want to ship it. There's a drop down, and you can ship it to any one of these locations. And that's where it's a direct call to action in regards to engaging one of our partners' stores.

Are you actively vetting who you invite as partner stores, or are you allowing them to approach you?

BP: So far everybody on the list are ones that I've gone after. We're sending our customers in to these stores, and we believe they're going to get taken care of, but it's still good knowing who these people are. So it's the foundation. We at least knew the areas we wanted to target, and all of those were people I had great relationships with, and trusted would be good fits. As we expand, and as word of mouth starts spreading, we have gotten a few inbound, and I think that's really going to escalate here, shortly. But so far they've been put together from our end.

EVO PORTLAND'S ELEVATED SKATE SECTION OVERLOOKS ITS ROTATING ART EXHIBITS.
EVO PORTLAND’S ELEVATED SKATE SECTION OVERLOOKS ITS ROTATING ART EXHIBITS.

RESULTS | THE FUTURE OF LA FAMILIA & SPECIALTY RETAIL

How many stores are currently under the La Familia program?

BW: Right now we have nine live, including our first New England retailer—Killington’s Basin Sports. We've been west coast focused, but now having somebody out at a resort [town] in Vermont I think is going be important. Our goal this year is to get to over twenty.

Why is 20 shops the goal?

BP: Twenty is a really nice number, because we have a footprint across the nation. We also want to make sure that we're really dialing in how we work together. Our commitment is to make sure that we're healthier as a result, while also delivering a better customer experience. If we put this cool program together, and it sounds great, but then it doesn't actually deliver and create health within our industry, and a better situation for our partners, then it's just not going to work. So we want to dial it in, with twenty-plus, and then once we've tinkered with that, and have a solid working model, then we will scale it from there. We see an opportunity to grow much bigger than that, but we want to make sure that we're in a really solid spot before we step on the gas.

How have you seen the program impact your business and your partners’ business so far, or how do you envision it in the near future?

BW:There's a lot of ways we want to impact our business positively, of course, or else we wouldn't be doing it. We also think there's a lot of direct ways to impact our partners’ business. It's this customer-focused approach that I think is pretty unique. An example of that, we had one of our shops, The Sports Creel—they're a mom and pop shop in Spokane, Washington— that had a customer come in to pick up a pair of ski boots. With a ski boot it’s often hard to know what's right for your foot, especially when it just shows up at your house. So in this case, the boot was shipped to the shop, and the shop determined that the boot was completely wrong for the customer. They sent it back to us and sold them something off their wall. They called me, kind of feeling bad about that, but if that happens every so often, I really think that's pretty powerful. That customer is going to be so much better off as a result, versus going out and using a product that's not right for him, and maybe not knowing any better. Getting that service, that support, and that confidence and the trust, they're going to be happier with us for having provided that, and really appreciate the in-person experience.

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BP: The key word that you pulled out is "trust." We have to make sure that whatever it takes we're creating trust among our customers, and that we're trusting that we are delivering a much better experience as a result of partnering with shops in a way that some people might see as strange—people think "Aren't they competitors? Aren't you trying to out-sell them?" But we don't really see it that way. This whole thing is predicated in trust. So often in our particular trade the brands are like, "We gotta make sure that specialty retail survives, it's so critical." Not only is it a big percentage of our sales, but if we don't have that energy, and those places on the ground, then we're all in trouble. So as we talk about La Familia, we're really sitting in the shoes of our customers, and creating a better experience. We feel like it is a solution and a better situation for everybody involved.

Community tends to be a bit of a buzzword, but community has actually been the heart and soul of our business. When we opened in 2005 and welcomed people into our space, to participate in all the things we do, from art to music, and working with non-profits, it was about community. Community, at that point in time, really meant customers, and of course our vendors, too. Community, for us, is everyone within this industry and beyond, and what we really love about this is it ties back to our DNA, and the perception of community, not just from a customer perspective but from a specialty retail and vendor perspective.

 

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