What Can The Industry Expect
From A “Normalized” Market?
By Jade Moldé
With the launch of the 2017 New Business Year, industry executives and dealers are cautiously optimistic. Following Donald Trump’s surprising victory, the long-term future of the industry looks secure: A Second Amendment-supporting president and Congressional Republicans will preserve the Protection of Lawful Commerce in Arms Act (PLCAA) for the foreseeable future.
But short-term challenges will confront the industry: For one, compared to a robust 2016 the market will likely soften in 2017. Additionally, there are still state and local threats the industry will need to contend with in the immediate future.
Several industry executives and dealers provided their predictions on how the “normalized” market will affect the shooting, outdoor and hunting industry this year.
The Industry Has Its Say
Executives in the industry predict 2017 will be more of a “normalized” year. However, they’re still approaching the 2017 New Business Year with optimism.
“No matter the results of the election, we expect the first half of 2017 to be a really good market,” said Tom Taylor, executive vice president and chief marketing officer at SIG SAUER. “I don’t think a lot of the recent gun sales have been solely driven by political pressure; people are starting to realize there are external threats to their safety. Whether it was Paris, San Bernardino, Orlando or domestic unrest, people are nervous about safety and security and we want to make sure we’re well prepared for the first half of 2017. We’re going to be extremely bullish.”
“We’ll definitely see some sort of ‘normalizing’ of growth in the industry,” said Paul Spitale, senior VP of commercial business at Colt’s Manufacturing. “But I also believe some of the particular factors that drove the performance in 2016 still exist. People still have concerns on terrorism, as well as some of the civil unrest we’ve had in our society. Additionally, people are focused on being self-reliant for their own personal protection. This was really driving activity in 2016 and I expect it to continue in 2017.”
Some of the uncertainty in the market is driven by the continued threat of anti-gun/anti-industry measures — which was always likely to impact the industry this year.
“As of now, there remains a lot of uncertainty about what the shooting sports market will look like in 2017,” said Kenyon Gleason, president of NASGW. “Of course there are plenty of ideas now the election is over, but the voter behavior surrounding Trump’s elevation to the presidency should tell us all we need to know about the fickle nature of the American population. And the reality is we still face many local, state and national challenges to the Second Amendment.”
While the favorable results of the presidential and congressional elections may contribute to a softened market in 2017, industry executives are in agreement it will present fresh, long-term openings for the industry.
“I expect the market will soften noticeably as the ‘fear of restrictions’ driver has seemingly been taken out of the selling equation,” said Sandy Chisholm, president of North American Arms. “With the new opportunities available to the industry on the legislative/regulatory front, there may be a temptation to overreach, but I think many sober initiatives — such as national concealed carry reciprocity, suppressors no longer Class 3 items, import/export reform, etc. — are very doable. With the selling frenzy about to subside, I think that product innovation will become increasingly important.”
“Sales may be lower in 2017, but long-term prospects are better,” said Rob Southwick, president of Southwick Associates. “Self- and home-defense sales will still rule. In watching state hunting license sales, we’re seeing increased interest in hunting from the Millennials in the urban fringe areas. While this won’t be the dominant growth source in 2017, it may be a new trend we need to watch.”
Dealers Have Their Say
Following the furor of the nearly two-year election cycle, dealers are anticipating more clarity in how the market responds in 2017.
“We increased our inventory by over 25 percent because no matter who won, we expected firearm and ammunition sales to increase. We had clients purchase guns in fear of a Trump or Clinton win, and I expect it to carry over easily in 2017,” noted Clay Ausley, owner of Fuquay Gun & Gold in Fuquay-Varina, N.C. “The only real question is: how long will the increase be sustained?”
“In order to be successful in 2017, we’ll stay flexible and plan accordingly — at times scheduling buys well in advance of need, while at other times keeping some category buying a bit lean so as not to build the wrong inventory,” said an executive from Turner’s Outdoorsman, a chain with nearly 20 locations in California.
Other retailers have expressed concerns relating to inventory.
“I’m not going to get stuck with dead inventory,” said Doug Torpy, partner of FrogBones Family Shooting Center in Melbourne, Fla. “We stocked up to the safest levels we felt were comfortable to meet the needs of our customers. But if there is inventory that’s not moving, we’ll slash prices even if we have to.”
“Staying on top of new trends and products is extremely important — especially with the rate of speed manufacturers are coming out with new firearms and accessories these days. In doing so, I believe this will prevent mistakes from happening,” added Pete McCluskey of Hoffman’s Gun Center & Indoor Range in Newington, Conn.
Brandon Light, director of retail operations at Thunderbird Firearms Academy in Wichita, Kan., advised against the temptation of becoming a “do-all” dealer.
“You have to buy right; get margin where you can. One thing you can’t do is to try to stock everything when it comes to accessories. For every item/category, have a good/better/best option — more than that can cause stagnant inventory to build up. Be in a position to react to the market. If you aren’t (or you react too soon and get stuck with a bunch of inventory) be prepared for a tough year.”
Keys To Success In 2017?
We asked both industry executives and dealers to give SI readers their “bottom line” projections for what it would take to be successful in 2017.
“It’s going to take persistence and nimbleness,” Gleason said.
“In general, we’re looking to stay agile as new sales patterns emerge. We want to identify opportunities to improve any aspect of our store sales and overall operations, adapt to the changes in our product mix, stay flexible within a market that continues to be very dynamic by being very dynamic ourselves,” the executive from Turner’s added.
Paul Spitale and Tom Taylor recognized dealers remain an integral component to their company’s success in 2017.
“For us, a commitment to retail and distribution partners will be critical to our success in 2017 — and knowing what the customers want to see in terms of products as well,” Spitale said.
“One of our goals at SIG is to be a better business partner for dealers in 2017. We’re focused on being efficient. Even in a challenged market, we want to tell customers when they’ll get their order and how much they can get. Communication with customers is key,” Taylor said.
For dealers looking to succeed, an awareness of consumer trends and new product introductions is paramount.
“Keeping an eye out for new and interesting products that are relative to what’s trending in the industry, staying up to date on current product knowledge and paying attention to the everyday consumer will all contribute to a dealer’s success this year,” McCluskey said.
Additionally, savvy dealers will seek out new opportunities to expand their reach in the local market.
“Diversify your business and look into alternate revenue streams. If you don’t offer training, start. If there are opportunities to sell to new customer bases, take them. If you have a shooting range, look into hosting more events — classrooms that sit empty except on the weekends are a missed opportunity,” Light said.
“We’ll continue to cater to the rapidly growing female market and keep building our training business. We’ll also buy products at the right price and try to give our customers the best experience we can,” Torpy said.
To maintain an in-store advantage, quality customer service is a must to attract (and then retain) loyal customers.
“We strive every year, and even every day, to be the best store to offer all three of the following: price, customer service and selection — with a major emphasis on customer service. Who wouldn’t want to shop where they’re appreciated? At the end of the day if our clients are happy and well taken care of they’ll remain our clients for many years to come,” Ausley said.
“It’s important to run your business like a place you would want to shop. Keeping current customers coming back has to be the first priority. Their sphere of influence adds up in dollars very quickly,” Light added. “Lastly, find a segment of the market to hang your hat on. Be the one-stop shop for suppressors or the best selection of rental guns in town. Once you have that one thing you can claim dominance over, work on the next.”
While some questions remain as the industry rolls into 2017, one thing stands out: Successful manufacturers, distributors, importers and retailers will look to innovate and find ways to meet consumer demand and inspire new demographics of customers. Shooting Industry’s staff looks forward to reporting on these developments as the year progresses.
Dealers, what are your predictions for the 2017 New Business Year? We want to hear from you! Contact us via email; send your observations to email@example.com.