Revisiting Our “De-Evolution” — And Charting A Way Forward

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Image: IRStone / Adobe Stock

Since we have taken a high-level survey of the firearm retail landscape and identified many of its rough spots, dead-end trails and bridges in need of repair in the first two articles of this mini-series, I would like to finish on a note of optimism. Yes, we can chart a forward-looking path for our industry that can potentially fix a lot of the struggles and adversarial relationships we try to navigate.

In my long tenure exploring the firearm retail wilderness, I have seen hopeful moments that attempted to produce a positive move forward for the dynamics of our specific supply chain. Many of these moments have been fleeting, short-term concepts or, in a few cases, new ways of doing business that have persisted and fundamentally made our industry better.

It Starts With One Word

Let me define some principles of how this can become a far better industry than it is today.

When able, I will refer to cases where the industry got it right and where it went wrong. It’s my hope to describe a more holistic approach that could significantly improve things — not just based on profitability, but from vastly improved customer satisfaction. 

It all starts with one important word: Collaborate.

One thing we tend to forget as members of the firearm industry supply chain is we are in the business of customer service. It’s the centerpiece of what we do. And it doesn’t matter if we manufacture the product, distribute it or place it on the retail shelf. At the end of the day, we’re in the business of solving customer problems and delivering solutions in such a way it makes them happy and eager to participate in our industry. When we stay focused on this being our primary goal, many issues become apparent.

All too often in our long history, manufacturers would eagerly (and I don’t fault them for being excited) market a new widget out to the masses and spend significant money to drive customers to the retail shelf, only to end up not having product in the supply chain until many months (and in some cases, years) after the media campaign was launched.

Some manufacturers learned their lesson well and radically changed their business practices to correct this (yes, you, Ruger — well done!) but, unfortunately, this is still the case with many brands. Retailers are frequently the agents who deliver disappointment to eager customers who are, cash in hand, ready to buy the latest-and-greatest new gadget not yet on the retail shelf. 

Often, it is the customer who makes the retailer aware the product was announced. So here is our first interaction with the word “collaborate” to move us forward. The devices we walk around with every day in our pockets (I am talking phones, not carry pistols here!) can alert us at a moment’s notice about things important to us. 

I regularly opt into many brands’ text alerts, which notify me when they have specials, events or promotions. Why don’t manufacturers utilize the same tools already in widespread use to better connect to their retail partners?

Imagine if a manufacturer texted their partnering retailers to say, “Industry partners, we are launching a media campaign next weekend about our new pistol. Be ready for customers. Your distributors have product on the way and should be available in the next 48 hours. Stock up and profit!”

Collaborative communication is the most basic step forward on our path. Let’s get rolling and take our next step of collaboration: Data sharing.

Data Sharing

We are deeply entrenched in what is typically called a “push supply chain.” To put it another way, our inventory system operates from a manufacturer-down concept, which can simply be described as a “Hey everyone, here’s what we made this month. Go sell it!”

This mindset has the manufacturer, arguably the least connected entity to the consumer, making all the decisions on what they think the customer wants. The result? Excesses of unwanted items, while having in-demand items in short supply (again disappointing customers when they can’t find what they want). This model usually creates headaches for every rung of the supply chain because they have valuable cash tied up in unwanted or excess inventory. 

Why not instead flip the process around and live in a pull supply chain? A pull supply chain puts the customer first and lets them dictate — through sales data visibility — what to manufacture. This reverses “Here is what we made, go sell it” to “Here is what we need, go make more.”

There are multiple sources of retail data available to every entity in our industry. GearFire’s RetailBI, NASGW’s SCOPE, GunBroker’s Analytics Tool, and the list goes on. Yet only a small fraction of businesses use this incredibly valuable data to make decisions that would vastly improve the supply chain. 

Product Development

The next waypoint of our collaboration journey is product development.

You might hear the following quite regularly: “I wish someone would make this!” or “Why aren’t they making this rifle yet?” The supply chain is habitually at the mercy of manufacturers, designers and engineers to make decisions around product development based on best guesses of consumer demand, coupled with long development cycles. 

A while back, I was part of a research team that looked at what are known as SMUs or “Special Make-Ups” in our industry. This is the fancy term for “limited edition” or “short production run” items. When looking at the history, roughly two-thirds of every SMU brought to life fails to produce real profits for the supply chain. 

This is usually tied to some well-intended individuals at a manufacturer or distributor board room thinking, “Hey, I have a neat idea that I think will sell” and they then run off to the factory and make a couple thousand of these units with the hope it will sell through quickly. However, they find out the consumer really doesn’t like it for some intangible reason.

At the end of the sales cycle, no one really knows why it didn’t speak to the consumer — so they go back to the drawing board (with limited learning in the process), and try again with another high probability of failure. Over time, manufacturers become gun-shy to produce more of these items as history dictates they will more than likely fail. 

In the landscape of modern retail, this can easily be fixed and result in a far more agile, profitable and customer-centric supply chain. This solution is known as “pre-selling.”

Many industries — from video games, pop-culture products or even entities like Kickstarter — all clearly prove pre-conceptualization and pre-selling of products is a common and well-accepted form of retail today. In essence, products are presented to the consumer before they’re manufactured. It tests the waters to see if the consumer really wants it and allows for agile ideation to modify a potential product to adapt to the consumer’s desires. 

A pre-sale approach also creates an immediate pass-through of the products. Once manufactured, every single unit of the product is pre-sold. I could write an entire article on this concept alone. (And if you think I should, let the editor know.)

The centerpiece here: Should this pre-sale fail to close enough sales, it never goes to production. The only cost and risk were the conceptualization and marketing of the item. This allows the consumer to give feedback such as, “I would have bought it if you had just changed XYZ.” The company can then regroup, make adjustments and push this new (accepted) concept out to the masses. 

As a result, the company has closer connections with consumers, and this system allows vastly faster ideation and minimizes the financial risks of making SMUs. By using this go-to-market strategy we can bring better alignment with the entire supply chain while making the customer feel like they have a say.

Fumble At The Goal Line

So, where is the downside? Once we have all these wonderful products being manufactured, how do they get into the hands of the consumer in a truly efficient and customer-centric way? Now, readers, is our next leg of the collaboration expedition: The customer experience.

All too often a scenario plays out where a customer heads to a local gun store to find a very specific product hoping to find it in-stock, only to be disappointed they do not have it. They then gallivant all over town hoping to find it at another local store. Four stops later and still no luck so they head home, disappointed and hop online, navigating the vast internet — finally finding it on the manufacturer’s website.

Scenarios like this cut the local retailer out of the loop, losing the sale along the way. It creates an adversarial relationship between the manufacturer and the retailer, as the manufacturer is also the competition. There’s a better way.

Partnership & Transparency

Remember at the beginning of this article I stated we’re in the business of customer service — and with it comes customer satisfaction. All along this journey, we have done nothing to make it more enjoyable, easier or satisfying to our customer base. 

The key to this is that through trust, alignment and common goals, we can make our industry as fluid, seamless and customer-centric as possible. So, what is this “better way?” It’s when manufacturers, distributors and retailers work together on a common goal. The goal? To get products into the customers’ hands as quickly and easily as possible. 

We’re not inventing the wheel here. Other industries already do this through strategic partnerships, process transparency and inventory visibility throughout the entire supply chain. 

Nordica, a manufacturer of skis, is a great example. Instead of trying to build competency in implementing a direct-to-consumer platform and cuttimg out their retailers, they chose instead to focus on what they do best — making skis. Though their website draws significant traffic to entice customers, they made the decision to leave the management of the sales cycle to their strategic retail partners. 

What Nordica (and many other manufacturers of winter sports products) has done is help retailers close more sales. This is accomplished by funneling sales to their partnered retailers and leveraging them to be their fulfillment partners to either deliver the product in their stores or ship the product to the end user. This system creates alignment of the supply chain and has retailers seeing manufacturers as partners, not competition. 

Not only does this create a healthier supply chain for Nordica’s retailers but even more importantly it gets the products into the consumer’s hands faster. And the result is a happier customer in the process!

Stepping Out Of Our Comfort Zone

Every single example I have given here can be accomplished today with existing technology. If only we could collectively step outside of our comfort zone and adopt better ways of doing business other industries are already doing — and doing successfully.

We often worry about how we are losing customers over time. Part of it has to do with clinging too tightly to old ways of doing business that no longer satisfy the expectations of the modern customer. These “old ways” have served us in the past, but to truly grow our customer base, maintain profitability and create a supply chain aligned with the needs of our customers the time to change is now! 

I can clearly see the industry could be at the end of the trail. We just need to take those brave next few steps, creating a better one as a result.

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