Riding The Growing Wake/Surf/Skate Crossover Wave w/Transworld Business
To read an in-depth look at the growing crossover between wake and skate/surf/snow retail, pick up a copy of the September issue of TransWorld Business.
According to ActionWatch, core retailers saw a 24% increase in wake hardgood sales for the first half of 2010 compared to 2009, helping keep year-over-year comparisons in the black for all hardgoods sold at the entire ActionWatch panel. What makes this even more impressive is the fact that wakeboard hardgoods are only sold in 17% of the panel’s 250-plus core retailers (compared to 94% for skate and 55% for surf), yet wake amkes up 11% of total hardgood sales for all stores.
One of the brands accounting for a huge chunk of this growth is Encinitas, California-based Liquid Force. We recently caught up with VP of Sales & Marketing Don Wallace to talk about this crossover and what it means for their business and retailers.
What percentage of your accounts are surf/skate/snow crossover accounts?
It varies by region, but a good guestimate would be 40 to 50%. As far as volume it might be a little less. We do a lot of volume with marine-based accounts. Internationally it’s probably 50 to 60%.
As a brand, more than some of the others, we’ve always had the surf vibe, so the percentage of crossover shops that we’re in might be a little higher than the norm. We’ve always partnered with brands like Spy, Monster, DVS, Skullcandy, all these brands that are associated with all the action sports. It gets more visibility of the sport and lets people know that it’s not just this marina deal.
Liquid Force VP of Sales & Marketing Don Wallace
Do you find that those crossover accounts usually segment it out as a category or how does the product mix work?
The guys that do it right have their wake section with a wake specialist selling the product, but a lot of time it crosses over. A lot of the Florida shops that are surf and wake, the kids that are working in the shops do both. It’s not like they have a wake expert and a surf expert but they have segmented sections.
One thing that has happened, this is something that we used to always say to the apparel brands and it seemed like most of them didn’t listen so we started doing our own apparel, was that a lot of the accounts that aren’t the crossover type accounts were starving for surf apparel. [They] have really embraced our stuff because the Quiksilver rep or whoever doesn’t go into their store so they don’t have the opportunity to sell cool boardshorts. They’re selling a lot of boardshorts and it’s good for us, but I look at some of these other brands and I think that they’re blowing it by not getting into some wake accounts. I know for the surf reps, it’s hard to think about spreading out to some of the inland accounts but there’s volume to be had there.
Right now, people are trying to figure out any avenue.
Yeah. We’re actually doing collaboration with DVS for a wakeskate shoe. They’ve done a wakeskate shoe with some of our athletes for the last few years, but most of our accounts never carried it. There’s a big chunk that didn’t carry it because they don’t carry DVS or a DVS rep didn’t approach them. This year our reps our selling the shoe for them. Sixty percent of our accounts they don’t have access to, and if we can sell another couple thousand pairs of shoes by going with us it will be helpful.
I’ve heard you’re doing really well on the apparel front. Who are your big competitors in wake accounts?
Billabong has always been in there. Of all the brands, they’ve probably done the best job of getting into every type of account that we sell to. [Also] O’Neill, just because they’re so strong with vests and neoprene. It’s not like we’re doing $20 million of apparel but our apparel has grown 30-50% every year in the last couple years.
Where are you seeing most of your sales on the apparel front?
It’s across the board. I think in reality, what’s been interesting about it is that a lot of the crossover accounts have been, it’s weird, they’re the ones that are use to selling apparel but they’ve been the hardest to get into because they look at it like “who’s going to buy Liquid Force when I’ve got Hurley, Billabong, Volcom?” Initially it was the guys that weren’t doing apparel.
More traditional marine/boat type dealers?
Yeah, that’s who we initially had the most success with, but this last season we did some testers with a lot of the crossovers and they’re saying they’ve seen results. Our orders for next year in those accounts have grown.
What’s your take on the health of the wake market right now?
It’s way stronger than it was last year. We’re still down significantly from 2007 and the first part of 2008, but it seems healthy. I look at our past-due report and this time last year we had so many accounts that owed us money and now it’s pretty clean.
I’ve heard that just as in all the other boardsports, there was a huge glut of wake product and that’s starting to get cleared out and new product’s selling?
Yeah, for sure. Our close-out list last year was $1 million worth of product and now it’s like $100,000. We lost out on some opportunities because we didn’t’ have as much product as we needed at times but right now it’s killer.
The market overall seems to have steadied and is going in the right direction again. If there is any struggle in our industry it’s that the boat guys aren’t selling boats-people don’t have cash for new boats.
Hisotrically, the [boat] accounts that were really good didn’t buy anything from us this year. They’re just trying to survive off last year’s inventory. That part of the market is still sketchy but the people that own boats want to buy new boards so they’re buying them from the crossover shops.
The other thing, cable parks have really helped. Internationally, 45% of our business is international, out numbers are stronger than they were in 2007. In Australia and a lot of Europe, it’s cable park heavy. The U.S. is behind, but we’re slowly getting more and more.
A look at Liquid Force’s September 2010 Surf Expo Booth
A look at Liquid Force’s September 2010 Surf Expo Booth
Where are those popping up around here?
There are probably about 20 that are in the works, but right now the biggest ones are in Orlando, there are three or four in Florida, then there’s Wake Nation in Cincinatti. There’s Texas Ski Ranch between Austin and San Antonio. There’s one in Kansas City. It’s more Midwest and East but there are talks of one in Reno, one down here [in Southern California], there are a couple in Colorado . By 2012 there’s going to be one in Boulder and one in Denver and Salt Lake City.
The one in Cincinatti, we had some dealers there that we sold a little stuff to, it was OK business, but then that park opened. The first year business grew a little, and this year that market went from a smaller deal to being one of our bigger territories.
We have a boat at the Carlsbad Lagoon that I can use any day I want, but you get done with work, to cruise up and drop it in, get some friends to go with, it’s just a process. Whereas a cable park, I could drive to it, ride for an hour and be done. I think a lot of people are more frequent users of the product with the park.
Our sport is kind of viewed as somewhat of an elitist sport because all the advertising focuses on kids riding in these $80,000 boats. In reality, it’s somewhat like that, but most of us started on really crappy, cheap boats back in the day and had a blast. I think we’re trying to let people know that you can have $10,000 boat and still have a blast, or if you have a cable park in your area you can spend $500 on a season pass and ride all summer. I hope that trend continues. We’re going to get a lot of people who have never even tried it behind a boat starting on the cable park. That’s what we need. If we just depend on boats, we’ll be a cool little niche sport, but we’ll never grow.
To read the full story, check out: http://business.transworld.net/47463/features/how-liquid-force-is-riding-the-wakesurfskate-crossover-wave/