How European Boardsports Retailers Can Prepare For The ‘New Normal’ After COVID-19

Source COVID-19 Boardsport Retail Coverage: Part III. Read part II here and part I here.

Our COVID-19 Boardsport retail coverage continues with perspectives for what happens when lockdown efforts are over – and how to prepare. By Dirk Vogel, Boardsport SOURCE Skateboard Editor.

Is it too soon? While the majority of European countries remain on social lockdown to curb the spread of coronavirus, the question of when – and how – things can get back to ‘normal’ is being floated across the globe. In the United States, government officials are considering an end to economic shutdown as soon as the month of May while experts in Germany evaluate models to ease restrictions in the weeks after Easter.

Meanwhile, Sweden has refused to enact any social restraints whatsoever, as your relatives who get their coronavirus information from WhatsApp groups have probably already told you. Then again, regardless of ‘alternative’ facts circulating the Interwebs, this is not ‘just the flu’, as the grave public health situation unfolding in the UK and cities like New York makes painstakingly clear.

So yes, maybe it’s still too soon. Especially since right now there are no definite timelines, or transition plans, for when social curbs will be reduced across Europe.

But the economic pressure is mounting and four out of five jobs worldwide are already affected by the pandemic according to the International Labour Organization (ILO). The ILO predicts that nearly 200 million people could end up out of work because of COVID-19 and the scenarios get worse the longer economic shutdowns remain in place.

With this in mind, it makes sense to ask two main questions: Once economies across Europe ramp back up after coronavirus lockdown, what will the ‘new normal’ look like? And what can European boardsports retailers do in order to prepare?

Looking at the current situation is a good starting point to answering both of these questions.

Photo courtesy of Madrid

THE CURRENT SITUATION

Asking around among skateboard brands and retailers, the surprising news is that skateboard sales on the whole appear to be stable, if not increasing. As David Price at longboard company Landyachtz told us: “With almost all schools cancelled for the rest of the year, parents are scrambling to find a way to keep their kids entertained while staying in their house or immediate neighbourhood. Business is actually up for some of our larger distributors that have online retail storefronts.”

While cities like Paris have gone to the extreme measure of banning all forms of exercise in public during the daytime, rolling around the block has provided an escape from the oppressive situation. Sure, this is not the time to skate a 14-stair handrail, but skating is a solo sport, not a team sport. Even isolated, skaters still enjoy the spring weather and skate hardware is in high demand, as distributors and stores confirm.

“The Olympics would have definitely boosted the skateboard market in general. Now, with its delay, the public is focusing more on the pursuits they can do when they are again able to go outside, and skateboarding will be one of those staple pursuits,” said Lowri Holness at SHINER Distribution/Arbor Longboards.

However, only essential businesses such as grocery stores and pharmacies are allowed to stay open in most of Europe. So skate retailers are finding ways to keep supplying customers directly without breaking social distancing protocol, as outlined in previous week’s SOURCE COVID-19 coverage.

As David Price at Landyachtz says: “Most smaller brick and mortar shops across Europe are closed, unless they have an online presence. I’ve heard some shops in big cities are just posting their current inventory on Instagram and asking customers to DM them for what board they want. Payment is made through direct transfer and the shop then delivers the board direct to the customer. The bigger online players are reporting strong sales.”

SUPPLY SHORTAGES ON THE HORIZON

This is encouraging news, but last week’s SOURCE article already posed the question: How long can supplies last now that global supply chains, especially for skateboard hardware, are increasingly broken by coronavirus?

We know that some hardgoods shipments directly from China did make their way to Europe before the Chinese government enacted the big freeze. And we know that these shipments are sitting in the Netherlands ready to ship to stores and distributors. But that will take at least five more weeks.

Looking at the situation in the United States, where the majority of high-profile skateboard brands are based, we know that major players have been forced to shut down shipping operations due to health concerns, including major conglomerates in skate hardware..

A recent article by the good folks at Jenkem mag explores the growing rumour of shortages in critical segments such as trucks, wheels and griptape. And that’s just within the United States. As one European skateboard business owner pointed out, Europe will not be first in line to get resupplied once hardware starts making its way back onto shelves: “It’s going to be America first, at least initially.”

Photo courtesy of Arbor

WHAT TO EXPECT: BUSINESS AFTER CORONAVIRUS

Supply levels are not the only wild card when it comes to predicting what boardsports retail will look like after the coronavirus. Again, there are no definite government plans or models at this point. Some of the more realistic scenarios consist of continued hygiene and distancing measures. Possibly apps to geo-track infected individuals by GPS, like we’ve seen in Taiwan. Or blood serum tests and certificates that would qualify those immune to the virus to roam more freely.

Let that sink in when you get a minute. There’s a lot to unpack and it gets more Orwellian the deeper you dig. But here are some very likely factors to be prepared for in the post COVID-19 economy:

Plummeting consumer confidence. In early April, Credit Suisse already predicted the eurozone economy would shrink 4 per cent this year, and these are just early estimates. Consumer confidence is already hitting record lows at −10.4 points on the European Commission Flash Consumer Confidence Indicator.

Online not a lifeboat. The retail industry was hopeful that sales would shift to digital as brick-and-mortar storefronts remained closed, but that only applies to critical items such as groceries, cleaning supplies, and outliers such as webcams and freezers. According to the German Association for E-Commerce and Mail Order Business (bevh), online sales in Germany had already dropped by 20 percent year-on-year in March 2020 due to COVID-19.

But no future without online. At the same time, the boardsports business will depend on strong digital storefronts for survival, said David Price at Landyachtz: “I’m most concerned about smaller and mid-sized distributors that don’t have any online direct sales, as that is what is going to be the difference between surviving and going under in the next few months. I think when this is all over, the retail landscape in general will be vastly different.”

Low supply in hardgoods, overstock in softgoods. As mentioned above, demand for skate hardware is proving robust, with supply bottlenecks already in the picture. But in softgoods, we may see a repeat of 2008’s Great Recession when overstock left an enduring legacy of heavily discounted apparel. The writing is already on the wall: According to the bevh, online apparel sales in Germany were down 35 percent in March 2020. And 33 percent of German consumers are now looking to spend ‘significantly less’ on fashion in the coming six months (Boston Consulting Group survey).

PREPARING FOR THE POST-CORONAVIRUS ECONOMY

Then again, perhaps breaking out of the ‘fast fashion’ cycle of constant overproduction could be a positive side effect of the crisis. And more sustainable, once business goes back to ‘normal’. Whether that will be in four weeks, eight weeks, or at the end of the summer.

Looking ahead, the good news is: “Skateboarding continues to be in demand, at least hardware, which is now the majority of our business,” said Jörg Ludewig at Urban Supplies Distribution in Germany. “So we can be glad we’re not in an industry where demand has suddenly entirely stagnated. People will continue to want to buy skateboards.”

On that note, here are five quick tips for what boardsports retailers can do right now in order to prepare for opening up their stores once the storm has passed:

1. Speak to your suppliers. Have an open conversation about the next round of orders and your needs in terms of payment plans, deliveries, restocking during the season, and working together moving forward. Right now is not the time to be a stranger, we’re in this together.
2. Double down on digital marketing. We already mentioned independent boardshops getting creative with their social media and keeping customers connected to new products. In the future, it will be important to raise the bar with location-based marketing, SEO, search marketing and other ways to appear first in searches when customers nearby need your services.
3. Click-and-collect and mail order will become status quo. Independent stores are also upping the ante with home delivery in their immediate vicinity, again putting location-based digital prowess to the test (see 2.).
4. Work closely with brands. For digital marketing materials or promotional activities such as online raffles, talk directly to brands, who are ready to step in. As reported earlier, Vans has launched the Foot the Bill initiative of Vans Customs shoes designed in cooperation with independent stores and venues. At the time of this writing, London’s Slam City Skates became the first European store to join the list of featured shoes created for the initiative with a buttery slip-on shoe, with Welcome Skateboards and Black Sheep store following closely behind. All proceeds from shoes sold on the website go to shops to help through this tough time.
   

   Vans Slam City

   

   Vans Black Sheep

5. Anticipate demand and prepare accordingly. Speak to your customers and be realistic about what you need, especially in hardgoods. Supplies can get low sooner than you think. Many consumers may opt for a staycation this summer, but still want to enjoy their time with a fresh set-up.

On that note, let’s keep our eyes on a bright future once all of this blows over. If you have positive news to share or want to drop a comment about coronavirus and boardsports, email us here at Boardsport SOURCE.

Until next week, stay safe & healthy!

Watch this space as our boardsports retail coverage amid COVID-19 returns to boardsportsource.com