2023 Preview: Dealers Prep
For Pricing Battle

Enhancing Value Will Be Key To Success

Image: Adobe Stock / freshidea

At the NASGW Expo this past October, the question resounding around the exhibition hall among attendees was: “Where do we go from here in 2023?”

NASGW President Kenyon Gleason summarized it well when he observed after the event, “We’re entering in a period of discovery. People are still trying to figure out — or discover — where we’re going from here as there aren’t a lot of strong indicators yet.”

There was hope the results of the 2022 midterm election would provide some clarity, but a mixed bag has further clouded the landscape. However, dealers have already detected some changes in the marketplace — and they don’t exactly herald electrifying news for the industry in 2023.

New Year Predictions

At the start of 2022, the industry was riding the buoyant wave of momentum from more than 5 million first-time gun buyers joining our ranks in 2021. But as the year progressed, Jacquelyn Clark, co-owner of Bristlecone Shooting, Training & Retail Center in Lakewood, Colo., observed a noticeable slowdown in her store.

“We went in to 2022 optimistic spending would continue much as it did in 2021, with a potentially slight downturn as things continued to normalize after the pandemic,” she said. “We didn’t anticipate facing a full recession and economic slow down. After the last half of 2022, we’re predicting 2023 will remain the same or decline slightly as consumers’ discretionary dollars continue to be scarce.”

As a result, Clark shared Bristlecone is going to be cautious in 2023.

“We aren’t planning any big capital expenditures or departmental expansions this year,” she said. “We’re going to be conservative with our spending, create operational efficiencies and focus on encouraging repeat business and loyalty with our existing customers.”

One of the benefits of a divided government is President Biden’s anti-gun agenda won’t be fulfilled by the 118th Congress. This will impact sales next year, predicts John Phillips, president and founder of Poway Weapons & Gear, in Poway, Calif.

“I think ’23 will be down 10–15% from 2022. I doubt any legislation will be coming out of Congress — which doesn’t mean there won’t be any proclamations or executive orders from the White House — until the next election,” he said. “So, purchasing out of fear of new gun laws won’t be a driving force for a while.”

It’s not all doom and gloom, according to Alex Hague, co-owner of Vandalia Range and Armory, with a location in Vandalia, Ohio and New Castle, Ind. He sees some positives from 2022 carrying over into 2023.

“I think 2023 has a lot of potential,” he said. “A lot of customers purchased more firearms and ammunition with the uncertainties of COVID, and so they aren’t as pressed to buy as in years’ past. We also see customers holding off on purchases due the rising costs in their everyday expenses. Hopefully we see inflation relief in 2023, which will help give consumers confidence in their purchases.”

Pricing Battle On The Way?

With a recession looming, the dealers polled for this column expressed fear over the return of “race to the bottom” pricing and its detrimental effects.

“Storefront dealers have threats on every corner, and 2023 is going to be no different,” said Clay Ausley, owner of Fuquay Gun in Fuquay-Varina, N.C. “The biggest threat in 2023 will be other brick-and-mortar stores choking on inventory and willing to lose money to pay the bills. This practice happens nearly every slowdown and hurts the entire industry — it devalues the products we all have and forces most of us to race to the bottom and beyond on price. Race-to-the-bottom pricing will be a storyline for 2023.”

It’s a case of the few ruining it for the majority, Ausley added.

“All of this means bottom-line profit will suffer for us all due to the actions of a few that cannot manage inventory, orders and, frankly, their business,” he said.

Barry Laws, CEO of Openrange in Crestwood, Ky., is likewise anticipating a pricing battle in 2023.

“I used to firmly believe ‘service trumped price,’ yet I no longer think this statement is valid. The only thing that apparently beats price is a better price,” he said. “So, staying lean and mean is important in lean times. Only carry the ‘milk and eggs’ that sell in-store.”

While competing against online-only stores and big boxes on price is nothing new, Clark’s team is focused on what it can control.

“We’re going to deal with them the same way as we have in other years — remain aware, yet focused on what we control and what we do, so we can do it the best,” she stated. “The downturn of the economy is the biggest and newest threat facing us, so we all need to come up with creative ways to streamline our operations and inspire growth and success where we can.”

Phillips is most concerned with the ATF being weaponized to demonize FFL holders.

“As dealers, we all would say the same thing: Regulatory risk is a major concern. The ATF’s ‘zero tolerance’ stance with little to no rules or direction is really concerning for us all,” he said. “Outside of regulatory risk, we’ll continue to see the race to the bottom that hurts everyone.”

Perceived Value Will Be Key

Consumers are expected to have less discretionary income in 2023, which will stunt sales of “extras” like firearm purchases and related accessories.

“A lot of customers are in a holding pattern on extraneous purchases until they see more stability with inflation, rates and other overall market,” Hague observed. “Rising costs and expenses are a problem felt by everyone right now.”

With less money to go around, budget-friendly products will stand out. According to Ausley, adding value will be a key to securing sales this year.

“Budget-minded items always sell,” he said. “However, I see 2023 as a year where the consumer will be looking for more bang for the buck — meaning greater perceived value, like free extras or upgraded features on a current model.”

Phillips agreed, but suggested a strong sales team can flip the script.

“I’m sure price will be an issue in some sales,” he contended. “But if our sales folks continue to offer good, consultative service to help buyers understand the benefits and features of products, we can offset much of that. People will buy good quality if they know what they are looking at. We just have to make sure to help them understand and acknowledge the difference.”

Clark likewise sees price playing a bigger role in decision-making in 2023.

“Because discretionary dollars are in shorter supply, customers are likely going to spend more time price comparing before a purchase,” she said. “If the strategy is to be middle-of-the-pack or slightly higher, the sales team better be ready to communicate the extra value for the higher price, because the customer will know what the shop down the street is selling the item for.”

Finding Success In The New Year

When it’s all said and done, dealers are going to have be smart, with a healthy dose of grit and gumption, to make 2023 a successful year.

According to Hague, focusing on the customer is an essential way to start.

“It’s going to take a lot of effort from the retailer to find products at a good price, and then deliver those products to the customer along with a great experience,” he noted. “Finding creative ways to get customers into your store will be important — special events, leagues, fundraisers, etc. We all need to focus on the customer, and find ways to make them feel comfortable purchasing from us.”

To achieve new-year success, Clark advises dealers to streamline operations and be price-conscious, just like their customers are.

“If we’re going to be successful this year, we need to be able to quickly create operational efficiencies and cost-cutting measures on the back end, and at the same time capitalizing on all customer opportunities — while showcasing value across what we do,” she said. “Price-conscious purchasing by customers goes hand in hand with strategic buying by the retailer. We won’t be doing much of ‘let’s bring this in and experiment to see if it sells’ this year,” she said.

Phillips predicts a strong membership base will enable retailers to withstand the challenges of a downturn.

“Memberships are the key to surviving (and thriving) in slow markets,” he stated. “Members will still buy products and they’ll come use the range, thus their benefits. They’re invested, so we’ll make sure the business model continues to revolve around them. If they understand and feel the value, we’ll see the benefits of our service and product offerings.”

Laws encouraged dealers to offer something unique, while staying nimble and responsive.

“Look for really cool brands newer to the market, and need a leg up,” he said. “Be different. Big entities can’t move as quickly as smaller ones so use it to create fun services quickly, then move on if it doesn’t resonate. Keep it simple, keep it fun.”

Ausley predicts a dealer’s resourcefulness will go a long way toward determining whether or not profits are made at the close of the business year.

“To be successful in 2023, dealers will have to keep both eyes open at all times, looking for the lowest cost of goods and making sure the current market price of potential new inventory is actually a profitable venture,” he concluded.

Dealers, the floor is open for discussion — what’s it going to take to be successful this year? Where do you see the greatest opportunity for growth in a likely down year for the industry? I’d love to hear from you: editor@shootingindustry.com.