So you’ve made the decision to expand into Europe, but lord have mercy! Europe is a big “country” with all those crazy languages and people with difficult names to pronounce. Where’s a fellow to start?
First of all, remember the 80/20 rule. You know, 80 percent of your business lies with twenty percent of your customers. That rule doesn’t stop at the U.S. coastlines, it’s true for Europe as well. So perhaps a good strategy would be to focus on the hot spots and worry about warming up the cold spots later.
To determine these, it’s essential to understand that each country in Europe is wildly diverse and the buying habits of their consumers vary dramatically. For instance, a look at some estimated figures on board sales from the ’96/97 season will give you a pretty good indication of which countries are selling the most boards: Germany, Switzerland, Austria, France, and Italy. But if your company is selling a product that caters specifically to Alpine riders (plate bindings, for instance) a closer inspection of these figures might divert your attention away from countries like France and Switzerland allowing you to focus on countries with a higher percentage of your potential customers like Austria and Italy.
In addition, although the United Kingdom sits at number six in terms of boards sold, many American companies find it a good place to start because its demographics are similar to those of the United States, and although the distributors still speak a foreign language, it’s one that most Americans find easier to comprehend than the other major European languages.
European Board Sales ’96/97
While some of these countries are cranking out the big numbers on board sales it doesn’t mean they haven’t seen their fair share of problems. Germany, for instance, has suffered recently from an oversupply of product. Last winter when retailers began to realize that board sales were stunningly low, most shops were forced to unload product at rock-bottom prices and everybody from chain stores to gray marketers were caught with their pants down.
Specialty retailers were hit the hardest by this practice and as a result, many were stuck with unsold inventory and are defaulting on their payables. In other areas, like France, a soft economy combined with a lack of snow for several consecutive seasons is producing this same backstock of unsold product.
But countries with growth possibilities that look bright are many, and opinions on exactly which countries those may be are as diverse as the experts with whom you’re speaking.
Several companies that have European distribution already up and running smoothly are looking at the developing economies in Eastern Europe. Countries like Poland, the Czech Republic, Hungary, and Slovenia are all receiving plenty of lip service among industry insiders. Their ultimate fate will be determined by the ability of those nations to develop their own political economies, thereby generating the kind of disposable income needed for consumers to begin purchasing snowboards.
Patrick Colton, export manager for Billabong Europe, sees it this way: “Snowboarding is just catching fire in Italy and Spain, and Eastern Europeans have new opportunities because of shifts in political and economic climates that now allow them to buy and sell more easily.”
On the other hand, Cyril Destremau, export manager for A Snowboards, still sees the greatest potential in market leaders like Germany, Austria, and Switzerland. He notes other countries just haven’t produced the numbers that the industry had anticipated. “Scandinavia is dropping despite its huge potential of good riders,” says Destremau. “Spain is dropping due to bad payment and Russia is dropping due to its financial crisis.”
But Steve Veytia, Northwave’s internatiional sales director, has ideas of his own. “Norway will see the largest percentage of growth over previous years. Snowboarding is huge right now and Daniel Franck and Terje Haakonsen are considered superstars. Look for an increase of close to twenty percent.”
Nevertheless, many international sales managers look at their numbers from Scandinavia and scratch their heads. They see countries with plenty of snow, some good mountains, and healthy economies, but despite their efforts the numbers just haven’t come through.
There are widely varying opinions about the reason for all this, the most readily acknowledged of which is that Americans just don’t understand the consumer there. This may be true, but in the final analysis at least one industry veteran suspects this mysterious lack of board sales is due to the unusually large number of sponsored riders. “There’s no one left to actually go out and buy the product!”