Outdoor Gear Exchange expanding to ‘click-and-mortar’ concept

The unorthodox, yet innovative move for a local outdoor shop in Burlington, Vt., in May could be a future trend for specialty retailers. SNEWS looks at how Outdoor Gear Exchange is growing its physical store thanks to its success online.
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The unorthodox, yet innovative move for a local outdoor shop in Burlington, Vt., in May could be a future trend for specialty retailers.

The Outdoor Gear Exchange plans to quadruple its size by moving into the 44,000-square-foot former Old Navy space in Burlington’s main downtown shopping district along Church Street.

That’s right – a local retailer is taking over a larger space from a national chain. You don’t hear that every day.

How Outdoor Gear Exchange plans to fill all that extra space might be where the retailer is setting a future trend. The shop floor will cover only 15,000 square feet of the space. The remaining 29,000 square feet will host offices and warehouse space, mostly serving the company’s growing online retail business GearX.com.

Outdoor Gear Exchange co-owner Marc Sherman says he is tapping into the “click-and-mortar” business concept.

The growth of GearX.com, which now accounts for 25 percent of the retailer’s revenue, was a large factor in the company’s quest for a larger location, Sherman told SNEWS.

Online orders used to be filled by pulling products from the retail floor, which was packed to capacity (see right, with tents even set up on the ceiling) to serve both sides of the business. At the new location, GearX.com operations will run from the warehouse space, freeing up space on the retail floor, but will also retain the advantage of having plenty of items on stock in the same building.

While most of GearX.com’s online revenue is from outside of Vermont, a majority of the website’s visitors are from within Vermont. Sherman said he thinks that’s because local consumers are learning to browse and check the website for products before they come to buy them at the store.

“People shop online now before they go anywhere,” he said. “With gas at $4 a gallon it makes sense. They don’t want to waste a trip.”

Of course, they’re also checking and comparing prices, Sherman said. And one advantage of the website and increasing social-network marketing is that Outdoor Gear Exchange can keep its customers updated on sales and specials going on at the store.

Sherman also points out the seasonal advantage of the growing online business.

“In the middle of April, business is still slow in the store but, online, business is picking up -- it’s starting to be sunny and warm somewhere in the country.”

The investment to redesign and improve the store’s e-commerce operation a few years ago has paid off. It’s hard for Sherman to contemplate now that the company once considered abandoning that side of the business.

In a sense, the success online is leading to success in the store, rewarding customers with the new larger location, Sherman said. The two businesses can co-exist and build off one another.

Outdoor Gear Exchange plans to move and open the new location by this mid-May. It would be the fourth location for the shop, which was founded as an 800-square-foot store in 1995. In 1998, it moved to 4,000 square feet, and then to its most recent location of 10,000 square feet in 2003.

The outdoor shop will lease its new larger space, but plans to purchase the building in about three years, Sherman said. While the company didn’t release financial details of the deal, the struggling real estate market may have led to the opportunity. It’s not often that you see higher-cost retail space being converted into typically cheaper warehouse space. Sherman said the single-location synergies will be worth it, and there’s the opportunity for some of the extra warehouse space to be converted to retail if needed.

For now, the 15,000 square feet of retail space – 50 percent more than the last – is plenty for the store to make room for open-tent displays and more paddling gear, from kayaking to stand-up paddleboarding. It also plans to start carrying adventure travel, vehicle racks and more kids’ outdoor products. And, because Outdoor Gear Exchange is replacing value-oriented retailer Old Navy, the company wants to provide more affordable and entry-level outdoor items too.

Outdoor Gear Exchange plans to keep its same store hours after the move.

--David Clucas

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