This summer鈥檚 announcement that Ibex would abandon the wholesale channel and would transition to a direct to consumer only model, caused a few of us in specialty retail to take pause. Is this the new reality we are going to be faced with every season?

Or, is there a lesson to be learned in what Ibex did? It鈥檚 my view that Ibex ended up where they are, which is with a foot in the grave and nails in the coffin, because of their own actions which failed to create 鈥渞etail priced鈥� value in the products that they produced.

Our Ibex sales rep, an excellent rep and veteran of the industry, indicated that retailers simply did not support the brand well enough to justify continuing the wholesale channel. If we had all just bought more this would not have happened, he said.

On its face, he is right: that is exactly what happened. But it鈥檚 more complicated than that.

The real question is why did retailers fail to support Ibex in the way they expected? At The Trail Head, we were a limited鈥攂ut loyal鈥攕upporter of the brand for over 20 years. In the past 18 to 24 months we have had 41 styles of Ibex鈥檚 line and around 175 SKUs with sales history. Our Ibex offerings were balanced with other apparel brands who came in with different price points and technologies. We have a responsibility to offer our customers choices. In the end, Ibex had good product but bad policies, and I think the rest of the outdoor industry can learn a lesson.

Several years ago I mentioned Ibex by name in an interview I did with OBJ about some of the challenges retailers were facing. I specifically called out Ibex as having the single most aggressive customer acquisition effort of any company I currently did business with.

Let me paint the picture: we retailers did the job of introducing consumers to the brand, which faces fierce competition from the likes of Smartwool, Icebreaker, Patagonia, Arc鈥檛eryx, and a handful of others just for shelf space in stores. We introduced customers to the quality and fit and features of Ibex apparel, and showed them products that were unique and had great value even though the prices were on the higher end of our spectrum. In short, we built Ibex brand advocates out of our regular customers.

As our customers became excited about the brand, they would reach out and touch the Ibex online platform to learn more about the company that made the wonderful piece they bought at their local retailer. Most of us who carry Ibex apparel are small retailers with a limited selection of SKUs. It鈥檚 natural that customers would want to see what else Ibex made.

This is where Ibex crossed the line, and forgot about its retail partners. For the past six to eight years, we have watched them use everything in their toolbox to convert our customers to their customers. They offered free shipping, first buy discount coupons, gifts with purchase, and straight up discounting. They blasted out email offers more frequently than brands 100 times their size. If you ever mentioned Ibex in a Gmail, for the next month an Ibex ad would populate the ads on any online search you did.

Ibex was relentless in their efforts to lure away our customers.

And now they are paying for it.

You see, as a retailer, we make decisions about who to support based on product and company performance. If the product is great and the company is great, we buy more from them. If the product is great but the company proves to be a less-than-ideal partner, we mitigate our risk through buying less.

Of course, we all understood that Ibex could not survive without a DTC channel. Few brands can these days. The margins are too enticing and many markets have lost specialty outdoor distribution through stores closing. But I believe they would have received broader and deeper retailer support if they had taken a different path. It is really not that hard to understand.

The notion that my vendors are spending magnitudes more money on acquiring a DTC consumer while still doing a huge percentage of their business wholesale is simply a recipe for 鈥済etting Ibex-ed.鈥� I would encourage retailers to remind鈥攖o demand, really鈥攖hat vendors shape marketing budgets that match what the sales look like. If a brand is doing 70 percent of its sales through retailers, does 70 percent of its marketing budget drive consumers to that channel?

The general answer is quite simply: no. Brands struggling at retail are spending way more on the DTC channel, which has a growth rate. They spend little to none on the channel that built the business for them, then bitterly complain that retailers are just not supporting them anymore.

Why the blatant double standard?

Will getting 鈥淚bex鈥檇鈥� become a verb in the language of retailers, synonymous for getting screwed by the brands you helped to build?

I am canceling my fall orders with Ibex. They are just another competitor now. Ibex is of course not pleased with me. They feel that I am leaving them holding the bag of inventory I committed to. I intend to pay my rep the commission he earned, but it is Ibex that owes him the money, not me.

In the end, Ibex left retailers after we worked hard to help them build a brand. I know that is not how they see it, but that is the reality. I look forward to spending my resources on brands that support what we do. I may go down, but I will at least go down swinging.

I am not totally bailing on Ibex until the bitter end. I am leaving the orders in place right up to the cancellation deadline, just in case a core customer that I developed walks through my door and asks to buy that one last piece from me before he too, gets Ibex鈥檇 out of supporting his local retailer.

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We, the independent specialty retail shops, did all the legwork to create these customers. Without us, these companies wouldn’t be here. I鈥檓 not sure there are many vendors that could survive without us, so I鈥檓 trying to help vendors balance capitalizing on the opportunities that direct-to-consumer sales have without undermining our ability to build that relationship with the consumer and profit on our inventory.

What outdoor specialty does the best is introduce people to products. You have consumers who don鈥檛 know anything about a new category, if they鈥檝e invented a new kind of shoe or a new old fabric in the case of wool from Icebreaker. It took a tremendous amount of work on the part of a big retail network in America to put Icebreaker products into people鈥檚 hands and help people see the value in it. Growing a brand from its infancy to the point where it has relatively broad market awareness is something that retail stores are still going to do better than selling direct to consumers online.

We sell consumers on the brand, but we have a very limited assortment of it because it鈥檚 hard for small retailers to pioneer a brand and you can鈥檛 buy all of the available products and colors. So you introduce people to this new brand and eventually they go, 鈥淚 wonder what else there is?鈥� And that consumer ends up going to their website to look at the product breadth that we don鈥檛 have.

Immediately after consumers engage with their website, vendors hammer that consumer with email blasts and specials like free shipping and throwing in a pair of gloves or a free hat. They really work to steal that customer away from us.

Ibex is another serious offender. We essentially create the brand disciple and they steal them. I don鈥檛 think a company like Ibex could survive without direct-to-consumer business, but I also don鈥檛 think they ever would have been able to get off the ground by only doing direct-to-consumer business. We鈥檙e not going to win every battle, but if Ibex continues to do business that way, it鈥檚 going to be harder and harder for retailers to support them.

I recently threatened to drop Scarpa, one of the most important brands in backcountry skiing. By far, Scarpa has been the best telemark and alpine touring boot manufacturer to work with in my career, so why would I sever the relationship? Vendor partners are now our fiercest competitors. This year, it started with a free hoody if you bought boots from them, some free freight promos and then the now-common 鈥渇riends and family pro sale.鈥� In the days leading to Christmas, a group of vendors opened up the pro sales departments and wholesale pricing to all friends and family of legit pros. Scarpa, along with 33 other vendors, including Osprey, Cascade Designs, Rab, La Sportiva, Petzl, MSR, BCA, Mountain Hardwear, and Sierra Designs participated in this sales extravaganza run by Outdoor Prolink.

Outdoor Prolink’s homepage. (Screenshot: Todd Frank)

When I asked Scarpa to give me a reason why they did it, the simple answer was 鈥渕oney.鈥� They primarily sell a product that needs to be custom fit by a professional with the tools to do it. We have done thousands of boot fittings here over the last 18 years, and we are pretty good at it. Why would I want to do business with a brand that actively sells a product that needs my expertise to fit properly when that business aggressively under cuts what I can sell it for? Five years ago, I would have howled and said because they have the best boots. Now, there are seven or eight other vendors that have absolutely amazing product, too. (Editor鈥檚 note: To Scarpa’s credit, since receiving similar feedback from several retailers they have committed to no longer doing friends and family promotions.)

If we all have to pay the price of a problem equally, it will stop vendors from pushing direct-to-consumer sales and taking business away from us. They鈥檙e always going to have a better assortment than we do, and they can鈥檛 really fix that piece of it. But what they can do is work with us to make sure we can sell the product we stock profitably throughout the whole season. So I鈥檓 asking the vendors to come to us with creative ideas.

I just had an experience with a major vendor in the apparel industry who went off price on their web direct-to-consumer business in clear violation of their own policy that said 鈥淲e鈥檒l hold price until this point in time.鈥� For reasons that are all legitimate, they couldn鈥檛 wait. I went to the vendor and I said, 鈥淚 think you owe me some markdown credits. You didn鈥檛 go by the policy you鈥檙e asking me to go by.鈥� They were pretty happy to do it. That needs to happen on more levels.

Until a vendor is affected by the final transaction with the end consumer buying their product, they鈥檙e not going to change the way they do it. So I鈥檓 looking for more partnerships with vendors who are willing to do things like manage excess inventory, share costs, take product back, trade product out, use markdown credits, or simply guarantee a sustained margin. The only way we鈥檙e going to change vendors鈥� behavior is with our checkbooks, so I can鈥檛 keep saying to people, 鈥淵ou have to change the way you鈥檙e doing business,鈥� and continue to buy 10 percent more than I did last year. At some point I just have to get up from the table and say, 鈥淲e鈥檙e done.鈥� They鈥檝e got to feel the pain a little bit, and until they feel the pain, there鈥檚 no motivation for any change in behavior.

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