In the 21st century, mass-media tastemakers and far-flung social networks can take a product from the niche to the mainstream literally overnight. Change is always challenging, and scaling up from a small, comfortable, stable operation to an international sensation can be stressful. Larger investments, narrower margins and increased competitive pressures present a clear choice: become more efficient, or fall by the wayside.
Cloud computing (where key applications to manage your business are based “in the cloud” and are accessed using a browser, an iPhone/iPad, or other mobile devices) solutions have a proven track record enabling rapid scaling of outdoor specialty brands by eliminating many of the growing pains associated with fast-growing businesses and significantly improving efficiency. More importantly, “going to the cloud” frees companies from the overhead and distraction of creating costly and complicated IT departments and allows them to focus on developing superior products, values, and customer experiences.
The increasing expansion of outdoor specialty products into a wider range of retail outlets and direct consumer sales channels means that small companies can find themselves competing with multi-national giants for shelf space and customer loyalty. The biggest brands have vertical and horizontal integration advantages that were nearly impossible for contenders to match. Cloud computing levels the playing field with affordable access to detailed supply chain and demand planning insights previously found only in high-end on-premise ERP systems. A firm command of costs, margins, and availability throughout the supply chain is what gave a few elite companies a competitive advantage in recent decades. That same power is now being put in the hands of today's innovative outdoor brands through the adoption of cloud computing.
Outdoor apparel company Mountain Khakis knew it was on the path to rapid growth when in less than two years it went from zero to 150 dealers. As the company continued to grow, its on-premise ERP solution was unable to meet the company’s demands. Adopting NetSuite has given Mountain Khakis the kind of efficient flexible solution it needed to add hundreds of additional dealers and manage an increase in shipments that grew by 1,500 percent. The company now has sophisticated marketplace controls for its suppliers and product-by-product sales insight from its most significant retail partners, ensuring that products stay in stock and are available to meet the growing demand.
Cloud solutions make it possible for suppliers and retailers across the world to access and update data crucial to operations, with no need for complex technology integration. Major retailers, distributors and brand partners all demand that key product information be provided in an accurate and timely fashion. Building custom data integrations is cost-prohibitive for smaller companies with on-premise software. Cloud solutions can format and deliver data at the right time, without forcing company employees to become programmers instead of outdoor goods experts.
Because cloud solutions are Web-based, any connected computer or handheld device can help run a business from anywhere—a vital consideration for growing companies with little time to spare. Operations no longer need to be delayed or run inefficiently because key personnel are out of the office. And the number of users with access to crucial, timely information has no arbitrary limit. Amazon Stores provide instant access to one of the world's largest consumer marketplaces with almost unlimited inventory; likewise, Amazon's EC2 services provide the exact computing power a business needs, whenever it is needed. Google Docs can be shared with one collaborator or 1,000. NetSuite, powering some of the leading outdoor specialty brands, can process transactions in multiple currencies, in dozens of languages, and provide accurate, actionable information for business operations in any time zone.
Consider GoPro, designers of wearable cameras for outdoor athletes and enthusiasts. Not long ago, GoPro was selling through independent representatives “in eaches.” Today, GoPro cameras are not only available in small surf and ski shops, but at a number of major big box retailers as well. These businesses have vastly different replenishment, service, and integration requirements. Managing rapid growth – more than a 380-percent revenue increase within less than two years – a global supply chain, end-customers and distribution partner requirements, all while protecting brand equity, is possible for GoPro because the company was able to quickly adopt powerful cloud computing solutions. Leveraging NetSuite, GoPro is able to balance an increasingly complex and exciting set of market opportunities including significant global expansion throughout Europe and Asia.
Because cloud solutions are designed for the modern Web, unlike conventional on-premise software, they make it easier to grow and reach customers through new and emerging channels, all while keeping employees productive and the costs low. Reusable bottle maker Bamboo Bottle Co, a start-up that went with NetSuite to build its business, took advantage of the integrated NetSuite offering to run its multi-channel business, coordinating sales through distributors as well as direct through its Ecommerce channel, which represents more than 50 percent of its overall business.
The case studies above are great examples of three different outdoor retail businesses that have been able to support successful growth through implementing cloud computing software. Outlined below are 10 recommendations outdoor retailers should know when considering the implementation of a cloud computing solution to take their business to the next level:
1. Business Strategy – Are you an innovator, a low-cost supplier, or do you serve a specialty market? Your focus and priorities will determine subsequent decisions.
2. Channel Strategy – Will you sell direct to consumers, to retailers, to specialty stores, or a combination of all of the above? Will you sell domestic or international?
3. Who Are Your Key Suppliers – Are they local or off-shore? Are you sharing appropriate data bi-directionally? Do you rate/evaluate them, to give them early demand visibility? Do you engage in joint planning and information sharing? Are they part of your long-term growth, success strategy?
4. Who Are Your Key Customers – Okay, you probably know it, but is it me, a consumer on the web, a major “big box” retailer, or a specialty store? Depending on where your revenue and profitability is coming from, it will determine what you need to do to serve them.
5. Ecommerce – Saying Ecommerce in 2012 is like discussing the need for a cell phone, it’s assumed, but… whether you use Ecommerce for education, communication, engagement, actual sales to end consumers or for partner replenishment are key questions and if you sell direct, how do you do that without creating channel conflicts with your resellers (if you have them).
6. IT Strategy – Technology needs to enable the first five priorities listed above – do you want to manage technology or use it, are you prepared to spend money to acquire key items or use it “as needed”?
7. Executive Buy-In – Whether you have a company of 10 people and a single owner, or are multi-national, do all executives understand and agree on the first six items listed above? Are they supportive and have enabled employees to do the right thing?
8. Are You Ready for Growth – Are you set-up to handle growth? Do you have scalability in your infrastructure, your employee development, or your organizational investment priorities?
9. Do You Have Feedback Loops – Do you have processes and tools in place to recognize, reward and repeat success or to quickly identify and stop incorrect actions? This relies on people, processes, and technology – do the first eight items above (notice a pattern here) enable this?
10. Are You Enjoying Yourself – Work is not always fun, growth is not always fun, serving and responding to customers’ requirements is not always fun… it’s not about fun, but are you enjoying yourself? Are the employees and organization set-up to learn and do? Do technology and tools enable people to do the right thing or are they spending time fighting erroneous processes with outdated tools and without executive support? Are they empowered to do, to learn, to serve, to grow?
Every worthwhile, dedicated outdoor goods company started with a vision and an enthusiastic outlook as its greatest assets. Cloud computing solutions ensure that a business never has to compromise on those foundational principals by becoming a victim to cumbersome and costly technology. Cloud technologies can help create a path to sustainable, profitable growth and limitless scalability, from the days of grassroots awareness and reputation-building to becoming a household name.
Ranga Bodla, Director of Industry Marketing with a focus on wholesale distribution and manufacturing organizations, brings to NetSuite more than 15 years of combined product management and marketing experience, with expertise in the software technology industry. In his current role, Bodla is charged with driving the marketing strategy and programs targeting wholesale distribution and manufacturing organizations.