In 2011, Graeme Esarey joined Industrial Revolution which makes Candle Lanterns, Pedco tripods, Ice Cream Balls, and Grilliput, and distributes Light My Fire, Esbit, and Mora. He was promoted to president in 2013, and launched a bold new retailer program this year. The Go and See Tour is an effort to work closer with—and understand the needs of-- the company’s retail partners around the country. Esarey and his staff will make hundreds of spontaneous visits to specialty outdoor stores who sell their product, compiling comments and data that will shape the company's programs and initiatives moving forward. It’s a major resource commitment that establishes Industrial Revolution as a shining example of how to be a good partner to its dealers.
SNEWS: What sparked the idea for the Go and See Tour?
Graeme Esarey: It originally came out of a discussion that we were having with Light My Fire. They launched a series of tours in Europe, with a focus on in-store demos, merchandising, and local event support. I confess we absconded with a bunch of their ideas, including the “just walk in” approach. The name Go and See Tour is a play on the Gemba walks that we do in our manufacturing/distribution business. Originally it comes from Taiichi Ohno (Toyota), and it the idea is that leadership needs to “Go look and see the real place.” That’s exactly how we see specialty, the “real place” our work gets done.
SNEWS: How have the initial stops gone? What have you learned?
GE: First, they’re really fun. The people who work in specialty have passion, and that makes it easy to connect with them. There is no better learning environment for people who are interested in outdoor gear, and like us, they learn a ton from their customers’ stories and adventures.
Our goal is to do 100 visits per quarter, which means we’ll be able to cover about half of our retail accounts per year. It takes resources (Industrial Revolution only has 35 full time employees), but we’re on the road a lot so it really comes down to adding a day here or there. It feels like a healthy addition to what we’re already doing. Each visit is only about half an hour. We ask questions about merchandising opportunities, displays, what categories are doing well. We ask questions about the store and customers and about online sales. Q1 is about learning and understanding our retail partners’ challenges so we can figure out what the next steps ought to be. The idea of this tour was actually a head-thumping revelation for us. We came to the conclusion: Why wouldn’t we do this?
As far as my takeaways, it was humbling in that I left every shop feeling like there is so much more that we could do locally to help. I loved that local events were a big part of how stores stay engaged in their communities, whether they were charities, trail runs, or fishing tournaments. We have a lot of work to do.
SNEWS: How will you respond to what you learn?
GE: This is where the rubber hits the road. After sharing the findings from Q1 visits at our quarterly management meeting, it was clear that to do all of the things we came back with, we needed more than a glorified travel plan. We actually need to change the way we do business, and the impact to our organization is broader than just sales. So we set up a cross functional team with Finance, Ops, Sales, PD, and Marketing to take a fresh look at our dealer programs, terms, tiers, shipping, in-store merchandising. And we are looking really hard at our reps to see who is invested, and who isn’t. Amazing what your customers will tell you if you are willing to listen!
SNEWS: This is time of real transition for specialty retail as big boxes are closing and vendors are getting more aggressive about direct sales. Where does Industrial Revolution stand on direct sales?
GE: All brands have to look at direct sales; they’d be crazy not to. But Industrial Revolution is a 45-year old company whose bread and butter has been wholesale or private label manufacturing. We’re not very good at direct consumer business. In fact, we’re lousy at it. Direct sales represent less than 1 percent of our total revenue. But we do have a conscious strategy: We use direct sales when it doesn't make sense for retailers to participate. An example is replacement glass for candle lanterns. It makes perfect sense for us to market an item like that directly to consumers. There’s a place for direct sales, but the issue is promotion. Brands like us need to have an online presence, but we also have to be intentional about how and where we want to interact with consumers: directly or through our specialty partners. I don’t think there are many brands who would go out and intentionally harm specialty partners, but there could be a lot of collateral damage with a promotion that isn’t well thought out. We’re probably leaving sales on the table, but truth is that we’re a manufacturer and distributor and we want to be world class at that. Being world class as an online retailer is a whole different ballgame. Each company needs to choose what it is and be good at it.
SNEWS: Industrial Revolution is both a gear manufacturer and a distributor of other brands. What is the growth strategy for the company?
GE: Industrial Revolution is a quirky company, and our products reflect that. We love innovative, useful products, and we’ve been lucky to have some great partnerships with brands like Light My Fire, Esbit, and Mora. As far as our own brands go, UCO’s lanterns (whether candle or LED powered) continue to drive growth, up almost 30 percent year over year, actually. The other piece of our growth strategy is acquisition, and we have a dedicated team for that as well. If you combine organic growth with acquisition, we have been growing at a rate of around 20 percent a year since 2011 when I joined the company, and 2016 should be strong for us again. It’s been a fun ride!
SNEWS: What happened to the MyFC PowerTrekk?
Regretfully we ended our partnership with MyFC. I love the idea and the weight efficiency of fuel cells—we are putting them in our race boat for the upcoming Race to Alaska, actually. (Unabashed PR grab, check out Team Un-Cruise!) But personal fuel cells might have been a bit ahead of its time.
SNEWS: Let’s talk Candle Lanterns. In terms of efficiency and performance, the good old candle lantern is way outdated, yet it still continues to sell well, right?
Candle Lanterns are a heritage product. This type of product appeals to the Millennial set, which explains the steady but modest growth we’ve seen in sales (up 5 to 6 percent). We launched new “throw-back” colors this year, and we have a new finish (very industrial-looking) that I think will be very popular. Also the Special Edition is a handmade, leather-wrapped lantern that I think would look right at home in the Filson Store. These candle lanterns are made right here in our facility in Seattle, by people who have been working at the company for 20 to 30 years. One more reason they continue to sell: Candles produce heat, and they’re wonderful for taking the condensation out of a tent or RV on a crispy spring morning. We haven’t figured out how to do that with our LED lanterns yet. One of our many nuggets from the Go and See Tour is that the Candlelier did well last summer when park burn bans were in place, as it makes a nice warm light that a group can gather around. Bottom line: We want to be part of the heritage outdoor story, and it’s an easy one for us to tell because we walk the talk.
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