A Retailer Competes With the Big Guys By Joining With Other Small Guys
How does a small company beat big competitors, online and off? By joining with other small companies to create a big presence. That’s the strategy behind La Familia, a network of 13 specialty retail shops. The network is the brainchild of evo, a small retailer of sporting goods in the Pacific Northwest.
In the past, evo founder, Bryce Phillips, says the retailer encountered a lot of “dead ends” with customers. They would buy, say, a ski and a binding from its website. Evo would ship the purchased products. The relationship would then be over. Unless the customer lived close to one of evo’s stores in Portland, Seattle or Denver, it was nearly impossible to create a community where customers could get expert advice and guidance.
When Phillips was visiting his parents in Bend, Oregon, he stopped into a sporting goods shop called Crows Feet Common. Phillips was impressed with the owner, David Marchi, with whom, by coincidence, Phillips had skied the year before. They worked out a deal where their customers could pick up items at each other’s shops. A partnership that would allow their customers to benefit from custom fittings and personal service.
“Independent specialty retailers and multi-channel specialty retailers like evo have all been working in islands,” Phillips says. “It could sound counter-intuitive considering that we are sending customers into our competitors’ stores. But, we don’t see it like that. We trust that when we deliver a better experience, two major metrics that are important to us will improve: conversion and loyalty.”
The initial stores were selected because of personal connections and friendships. Even so, Phillips acknowledges some were initially reticent to link up with competitors. “At first it’s common for an owner or manager of a store to ask ‘What’s the catch?'” he says. “Like any partnership, we have to establish trust that we are looking to create a win for both sides.”
Through the growing La Familia network, the small independent brick and mortar shops can now compete with box stores and online e-tailers when it comes to the ease, convenience, and a larger product selection from all 13 stores.
Those mutual wins include a revenue-share program where La Familia partners receive a slice of the pie if a customer purchases a product that evo sells and they are out of or do not carry. “This is only the tip of the iceberg when it comes to evaluating the network given the ways that all involved can benefit,” he says.
Many Ways to Grow
Phillips envisions many ways the network can grow. When one of the network’s vendors launches a special product, it can be leveraged across evo’s flagship locations, its web site and the La Familia network.
“This is also compelling when considering a launch of an entire brand. Then there is the end of life inventory. And we now have the ability to optimize pricing when the season is up” he adds. On the marketing front, partnering with stores on events can make those events larger and make customers more enthusiastic.
Now that word is spreading about La Familia, Phillips is being approached by sales managers and reps from stores he doesn’t know personally that want to join. He has some simple advice for retailers in other niches that want to put together a network: “Reach out!” he says. “We are in this business not only because we love the sports and lifestyle but also because it’s always awesome to meet and work with great people. We know that it’s very early when it comes to how our industry and retail as a whole will evolve. But we are excited to be working with great people who share our passion for building lasting relationships and great businesses.”