The NEED To Be Different With Rob Colby
Rob Colby is the co-owner and manager of Need Essentials Americas. Rob’s partner is Charlie Exon, a longtime friend and mentor, and former General Counsel and BOD member at Quiksilver Inc. Rob held a variety of roles, ranging from lower level marketing jobs to GM of Latin America, COO, and eventually President of the Americas for Quiksilver Inc. Running a direct-to-consumer brand plus all the experience from Quiksilver, I knew there would be important insights for Rob to share with our readers.
Give us an inside look at the past 6 months of the business. The pre-during-post Covid-19 environment. How was business tracking before the shutdown, what was going on in your mind during the stay at home order and what did you guys do to adjust, and what’s going on now?
Business was growing steadily leading up to the Covid-19 situation. We are a very small business, so take that with a grain of salt:) Once the stay at home order was issued, we had some serious discussions about how we think about our plan (cash flow, inventory, staff, and all variable expenses) going forward. We took, what we felt was, a conservative approach and decided to shut down our showrooms and revisit our POs in process as well as the upcoming POs, to ensure we knew that we were in solid shape w/ respect to cash.
We're self-funded, so cash flow planning is the most important thing we pay attention to in times like these...Actually, it's really the most important aspect of planning for us. I know, from my experience at Quik, that things can change quickly, and in some cases exponentially out of favor. Banks, suppliers, shipping capacity, etc. It can all change in a hurry. The best insurance you can have is cash in the bank. My friend, Bob Allison, told me on several occasions that "preservation of capital" is important...sage advice for sure.
To your question about what's going on now...Well, we’re doing ok. And I was pretty surprised until I really started to process what was happening in the US and all over the world - people working from home or out of work, stimulus money, recommendations that outdoor exercise was beneficial, no air travel, brick and mortar retail closures, etc. All of these things seemed to favor hardgoods (equipment and tech products) sellers. Bike stores, specialty running, board builders, etc. Everyone was up dramatically. That was actually something that really helped me remain optimistic through all of this. My family lives in Seal Beach, and seeing our little Main St. Cycle shop and Harbour Surfboards absolutely booming was awesome.
What are you witnessing from consumer habits as they shop for your products? What’s selling and what’s not, or are they looking for something particular? Any emerging insights/trends?
We don’t see anything in person, and we don’t track how customers navigate our site, so it’s tough to say. Seasonal product sales are consistent. We hear from customers with sizing questions, product replenishment questions, shipping questions, etc. I’d say, in general, we’re hearing from a lot more women than we ever had in the past. That’s pretty rad. And anecdotally, we’re hearing from a lot of guys/gals who are buying their first wetsuit. That wasn’t a market I thought we’d tap into, so it’s been a pleasant surprise. And nothing has really changed in terms of seasonal selling. We sell lots of boardies, wetsuit jackets, long arm springs, etc. in the spring and summer months. And we’ll start to sell 4/3s, 5/4s, etc here in late August going forward. But, nothing has changed in terms of demand for a particular product category. But, I bet if we sold bikes, we’d be going bonkers!
What challenges and opportunities do you see for your business?
Challenges: inventory planning in an uncertain, and really unprecedented time. We’re super dogmatic about being self-funded, so that’s always a challenge. Supply chain interruptions are always a risk (and challenge). The surprise 15% China tariff was a nightmare for our US business. And it seems like the next few months are going to see continued chaos that could impact our supply chain. And as every reader knows, those knee-jerk tariffs only hurt US businesses as we have no chance of reacting w/ less than 18 months (or more) of notice.
Opportunities: Well, I’ll answer this selfishly and say that it’s an opportunity to move the business geographically. I love my hometown...Seal Beach. But, I’m moving north. My kids are out of school and my wife and I can look after them wherever the heck we want:) So we’re going north soon. But seriously, the opportunity is there in many areas. Recapitalizing and “resetting distribution” for brands is a massive opportunity. Launching something new is a massive opportunity as virtually all of the product innovation has been shut down and now all (demand creation) messaging is about staying safe or not trying to upset anyone. So, there’s a big opportunity to bring something new to market and capture the attention of consumers who really would like to see something that will make them happy...much of what we see, everyday, makes us sad. I hope that ends soon.
Have you been following or looking at any other industries to help you navigate these uncertain times?
I listen to a ton of different podcasts all day long. And the industry that I think is most directly correlated w/ what we do (at Need) is AirBnB (travel) and really those pods that deal with society, government, and how people are getting through this.
As an industry leader, what is your advice to brands and retailers as many of your peers try to figure out how to operate in a post-pandemic world
Honestly, Vipe. I don’t know. But more than ever, I default to differentiation. Be different (and I mean better) than the competition. At everything. Product quality. Customer service. Communication. Have fun with content in a content-starved world. Think about different business models - subscriptions, direct, social benefit, etc.
And dang, I can’t wait to talk about this in a post-pandemic world. But for now, I’d say have conversations about new product ideas (get excited about the future), ship quickly, over communicate with your customers, take care of your crew (staff, family, customers, etc), be extra kind and show love/care in your eyes when you’re wearing a mask, and stay optimistic.
What’s your macro outlook for the economy in general?
My finance background leaves me pretty pessimistic. We’ve moved through the last few months without major short term issues because our government “printed” money and our stock market has close to zero correlation with the actual economy. Hoping our business model will continue to attract consumers who want to be smart with their money.