SPECIAL REPORT:
3 Silver Linings (And 3 Fears) At The Dealer Level

By Jade Moldae, Editor of Shooting Industry

With a surge of first-time gun owners, dealers can serve as trusted resources to educate and promote safety — which will be key to retaining these customers.

Prior to the onset of COVID-19, the firearms industry was already poised for a strong 2020. Weighing in on SHOT Show in early February, John McConkey, president of The Modern Sportsman in Burnsville, Minn., said: “SHOT Show reflected the industry as a whole is in a great place right now.”

In the weeks since, dealers across the U.S. have reported sales numbers that rival (and even exceed) previous surge years of 2013 and 2016 in the wake of COVID-19. Through discussions with dealers and industry professionals we’ve uncovered three silver linings (and three fears) that have emerged in the early weeks of this crisis at the dealer level.

Silver Lining: New Customers Bring New Opportunities

A defining characteristic of the COVID-19 surge compared to previous ones is the motivation to buy has shifted. In 2013 and 2016, the fear of anti-gun legislation served as a primary motivating factor for consumers. In recent weeks, a buyer’s motivation is being fueled by self-defense fears — which is bringing an entirely new type of gun buyer into storefronts today.

“The overwhelming majority of these customers are first-time gun owners,” observed John Phillips, founder of Poway Weapons & Gear Range in Poway, Calif. “And interestingly, these are people who — prior to this pandemic — had zero interest in owning a firearm. They’re more left-leaning, with liberal views on firearms ownership and they’ve been surprised they can’t just walk out with a gun.” (California has a 10-day “cooling off” period for firearms purchases.)

With an influx of customers, it presents an opportunity for the industry.

“While we’re bringing more new people into the industry, we need to think of how we’re engaging them,” shared Nancy Bacon, Southwick Associates VP of business development. “As an industry, are we positioning ourselves to offer training and safety education opportunities? Look for ways to stay connected to these customers so they’ll come back to you when they can.”

Jacquelyn Clark, owner of Bristlecone Shooting, Training & Retail Center in Lakewood, Colo., offered a similar viewpoint.

“It will be all about how we as an industry bring these new folks in to the fold, and keep them engaged via education over the next few months.”

Fear: Rapid Influx Comes At A Cost

With the surge of customers comes a classic catch-22 quandary.

“It’s great news we’re getting a huge rush on first-time buyers, but the terrible news is they’re coming into our stores and ranges when we can’t give them our usual level of service,” said Doug VanderWoude, managing director, commercial for Range Systems. “These folks are coming into establishments at the very point when they need extra handholding, but — out of necessity — we’re pushing them along as fast as possible.”

When interacting with new customers, make sure you and your sales team are letting them know about education, training and safety opportunities on hand at your store. It wouldn’t hurt to have a flyer with pertinent information or to send a digital mailer with links to trusted resources and an embedded welcome video from you or an instructor on basic gun safety.

Joe Kriz, FMG Publications digital content manager and part-time sales associate at Bristlecone Shooting, suggests offering incentives to new customers.

“Encourage new gun owners to take an Intro to Pistol class, get their concealed carry permit or watch your safety video by incentivizing them with special reward programs,” he contends. “Reward them with a free hat, extra magazine or online discount code. Don’t settle for them being a SIG SAUER gun owner, motivate them to be a responsible SIG SAUER gun owner.”

Editor’s Note: FMG Publications, parent company to SI, has videos on its YouTube channel on the 4 Firearm Safety Rules (https://youtu.be/AGUVP2iQinw) and an entire playlist on safely unloading firearms, basic gun cleaning, trigger presses and more (https://www.youtube.com/playlist?list=PL17C4930B074E77FF).

If you don’t have time to invest in embedded videos to welcome new shooters to the industry, look to trusted resources to help. A video introducing the four firearm safety rules would be a great start.

Silver Lining: Selling Through Inventory

Rob Southwick, president of Southwick Associates, predicts sales of all firearms to receive a significant boost during this time — enabling dealers to sell through previous slow movers.

“Expect sales of handguns and MSR’s to spike higher than shotguns and traditional rifles, along with matching ammunition,” he forecasts. “In some areas, shotguns will do better where purchase restrictions inhibit sales of handguns and many rifles.

Adam Wagner, owner of A&P Armory in Magnolia, Texas, shared the surge in panic buying has already enabled his store to move inventory.

“We’ve been extremely fortunate to sell much of our inventory,” he said. “We may use this opportunity to cleanse and eliminate certain sectors in which we’re getting beaten online — such as reloading.”

In addition, Wagner plans to use this surge to refocus his business once it subsides.

“We’re considering using this opportunity to relaunch a focus on used guns and services. I’m encouraging my customers to bring in consignments; used guns are fetching new prices right now — bringing better margins and no risk to dealers of being buried in stale inventory when the bubble bursts,” he noted.

Fear: Feast Now, Famine Later

David Rich, owner of Naples Gun Shop in Naples, Fla., reports while his store has experienced increases of 1,000% in the early days of COVID-19, he’s prepared for an extended slowdown once it ends. Training will be one way his store can bring in revenue and reengage first-time gun owners.

In the days immediately following President Trump’s March 13 national emergency declaration, Naples Gun Shop (Naples, Fla.) Owner David Rich reported a 1,000% increase in daily sales.

“Daily, we’re selling out of GLOCKs, and have to stay up late hours finding available replacements throughout our distributor network,” he said. “Our new customers are now looking into Taurus, SCCY and other brands — basically telling us they’ll purchase whatever we have.”

Rich added a very real concern: “Although it’s a ‘feast’ for gun shops this week, I fear next week may be a ‘famine’ — and one that won’t last only a week.”

Unlike previous surges, it’s expected COVID-19 fueled purchases may only last a few weeks — meaning inventory management is going to be key.

“I really hope retailers manage their inventories and don’t go hog wild,” said Barry Laws, CEO of Openrange Gun Range in Crestwood, Ky. “All we need is another situation where retailers are dumping their inventory after the scare passes and driving the market further into the ground (even below where we were previous to this emergency).”

Silver Lining: Investing In E-Commerce

In a state-by-state (even county-by-county) battle, storefront dealers are being affected by the essential/non-essential business category argument. For those businesses able to stay open, calls for social distancing is impacting how commerce is done. (We previously reported on Openrange’s temporary adoption of a curbside pickup model (https://bit.ly/2w5Qw0l).

Social distancing and limiting “non-essential” travel can result in a positive change for the industry: necessitating the need for brick-and-mortar dealers to ramp up the e-commerce segment of their business.

E-commerce and software providers have noted an early uptick from storefront dealers looking to elevate their online presence. 

“We have definitely experienced an uptick in online sales for our firearms dealers who are online — and for those not already selling online it’s a big focus to now do so, and quickly,” informed Michele Salerno, director of marketing and assistant VP at Celerant Technology Corp. “We’re shifting our resources internally to help expedite new websites so dealers can go live faster than ever before.”

(Salerno also shared a client went “live” on Friday and already had 1,000 orders over the weekend.)

Shawn Tibbitts, president of Tegrous Consulting (developers of OneShot business software for the firearms industry), noted in times of high demand customers want real-time availability — and companies without this information could be missing out.

“Customers want real-time availability of not only on-hand inventory, but they also want to know lead times for any ‘make-to-order’ products. Industry companies that do not have a robust ERP (enterprise resource planning) with real-time connectivity to e-commerce are causing hesitation among customers — who may bounce to other sites or place calls to the company, which ties up resources,” he said. 

“Those companies that are on top of their business are in much better shape than those that will be returning to work in ‘XX’ days to see where they stand. Putting an ERP system in place is going to be essential moving forward in these difficult economic times,” added Travis Noteboom, Tegrous director for the firearms/outdoor industry.

Bottom Line

In this uncertain era, there is at least one certainty: the dealer who can be nimble and innovative while navigating through this new normal and staying connected to customers will stand to benefit once things “return to normal.”

Rob Southwick sets it up well: “We know shifts will happen, directly related to COVID prevention or new social norms — the person who figures it out will make a lot of money.”

How is your store coping in the COVID-19 fight? Do you agree or disagree with the silver linings/fears above? Let us know: comment below or send an email to editor@nullshootingindustry.com.

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