The recent acquisition of MagicSeaweed, Stab Magazine, and SurfHardware by Australian retailer SurfStitch is just one example in the growing trend of consolidation amongst surf-related brands. The $50 million+ initiative follows the recent misfortunes of Billabong and Quiksilver, and the efforts made by others, including Volcom and Rip Curl, to batten down the hatches due to challenging trade conditions. It all makes you wonder, “What exactly is going on with surf brands these days?”
The recent downturn is in part due to the unfortunate timing of, for example, Billabong in overextending itself by buying brands at the height of the recent financial crisis at top dollar. As equally important is the competition from other fashion retailers who are less focused on surfing and more concerned with the value of hard-pressed consumers, which has given the so-called “big guns” of surfing a run for their money.
There is, however, more fundamental dynamics at work here, notably when it comes to digital media. Social media, for example, has enabled consumers to retake control of the relationships they choose to have with brands. I say “retake” because a lot of the big-name brands who were rooted in ’60s surf culture grew into corporate concerns, accountable to shareholders, which ultimately led to the loss of their credibility and relevance.
Once proud surfing brands synonymous with our great sport diversified itself into the snow and skate markets, the connection with their original market became diluted. Confused and ultimately destructive, as they say, “If you don’t stand for something, you’ll fall for anything.” Some of these iconic brands will disappear while others will continue to consolidate. Consumers will increasingly shape the type of relationship and conversation they have with their brands of choice, while millions of dollars are poured into big business’ marketing budget.
So what’s the big deal here? Well, for starters, as markets become globalized – which is happening in nearly every corner of the industry these days – it will become increasingly difficult for independent surf brands to secure an effective presence in the minds of consumers without either spending massive advertising budgets (which most independent brands simply don’t have) or distributing their product through third-party retail channels. This means that emerging brands will have to really, really step up their game, because even if products are distributed through third-party retailers, the likelihood is that it’ll be less on your terms and more on theirs because they’re delivering to a mass market.
Aside from the impact on pricing and choice, this is not good for the consumer, as it also accelerates the relentless march toward blandness, which is not at all what surfing represents. Surfing is a standout sport. As cliché as it seems, it’s a lifestyle. A way of life. And it’s certainly not something you stick on a virtual shelf with a price tag.
So what can independent brands do to compete while genuinely feeding the stoke? Emerging surf brands will need to consistently be the best they can be for their target markets. In terms of quality and value, brands will need to be unique and relevant by, for example, adopting environmentally-sustainable production and cost-effective marketing and distribution in order to succeed.
But success, of course, is no easy task. However, by virtue of a new business’ small size, emerging brands can still outgun the bigger competition. New companies are typically smaller, meaning their operations are more tightly run, which gives them the ability to be agile and quicker to adapt. Those who are successfully adapting to this new market reality while using the digital/social space to reposition themselves exclusively online will strike up direct, intimate, and lasting relationships with their customer base. And that’s the secret sauce, folks.