May 2, 2005, 12:00 AM

Back to the Future

Backcountry.com re-adopts a niche strategy

You might say that Backcountry.com is going back to the future.

Launched in 1996, Backcountry specialized in selling back-country ski and avalanche gear, and soon earned a reputation for its high quality products and skiing expertise. But attracted by the promise of easy money, it expanded into other related categories, says Jim Holland, CEO and cofounder. "We recognized we could sell toilet paper on the Internet," he says. "We tried to remain focused in the beginning, but increased revenues were very tempting."

Adding more products, however, is a move Backcountry came to regret. "It was a short-term win to add every imaginable category and just continue to build on that," Holland says. "But in time, it`s a long-term loss because you become a generalist, and you`re no longer respected as the experts in the category."

Not slimming down

Backcountry is not, however, planning to slim down its product offerings. Rather, to re-claim its image as a specialist in performance outdoor gear, Backcountry has developed niche sites targeting hard-core skiers (Tramdock.com), snowboarders (DogFunk.com), bargain-seekers (Backcountryoutlet.com and SteepandCheap.com) and middle-market, price-sensitive outdoor athletes (Explore64.com).

"We`ve come to recognize that by being focused within some targeted niches, we can certainly better serve our customers and garner more respect from our customers as well," Holland says.

Analysts say that Backcountry is harnessing one of the powerful aspects of the Internet: The ability to create niche sites, supported by a common infrastructure but that provide a different experience to different segments of shoppers. "What`s interesting is they`re dealing with a specialized experience outside of what their main site may be like," says Patti Freeman Evans, retail analyst at Jupiter Research. "It`s a really interesting test to see the value of a segmented online retail approach."

Founded in 1996 with a $2,000 investment, Backcountry.com reached profitability in 1997, its first full year. The company experienced triple-digit growth during its first six years, culminating in 134% year-over-year gains in 2003. It reported $27 million in sales during 2004, up 84% from $14.7 million in 2003. Backcountry expects to return to triple-digit sales volume growth this year.

Backcountry`s corporate culture can best be described as laid back. Its mantra: "We use the gear we sell." Indeed, both Holland and John Bresee, president and cofounder, have deep roots in the skiing world. Holland, 39, is a two-time Olympian and six-time national champion Nordic ski jumper. He was a member of the U.S. Ski Team for more than nine years. He also was the founder of Wasatch Web Works, a web development company.

Bresee, 38, is described on Backcountry`s site as "a lifelong ski bum who has flipped burgers at Alta, washed dishes at Snowbird, and taught skiing at Stowe." He also founded the Wasatch Canyon Reporter newspaper and became editor at Powder magazine.

Fuzzy focus

Holland and Bresee used their backgrounds to build up an online business featuring some of the top brands in outdoor gear: The North Face, Scarpa, Giro, Jansport, and others. The site sold everything from ski jackets and wool socks to avalanche beacons, freeride snowboards, and climbing skins.

But as Backcountry pushed beyond its base, it began to dilute the brand, Holland says. "We`ve been conscious for a long time of our gradual deviation from our focus," he says. And so the company took a close look at its operations and opted to set up sites catering to different market segments.

The niche sites are designed to attract the serious outdoor enthusiasts and athletes by offering a complete selection of specialized gear. For example, "if you`re thinking about ski gear in July when a local ski shop is selling bikes, Tramdock.com will be selling ski gear and our customer service reps will be talking about ski gear," Holland says.

Backcountry kicked off its niche strategy last July with the launch of BackcountryOutlet.com. "We recognized that at any given time, there`s a certain percentage of inventory that`s appropriate to have on sale," Holland says. "Being in the business that we`re in, overstock is inevitable." Backcountry also buys close-out inventory from other sources, he says.

One of its newer sites, Steepand Cheap.com, offers price reductions of as much as 70% on high-quality products from name brand, category-leading outdoor gear manufacturers. Backcountry posts the items at midnight of the day they go on sale.

Recently featured was the CamelBak Cloud Walker backpack, priced at $29.95, regularly priced at $59.95. That item--posted on April 1--sold out by 9:30 a.m. Backcountry had 54 of the items in stock. SteepandCheap`s fastest sellout of a feature item came on Feb. 23, when 22 Original Sin Snowboards sold out by 12:30 a.m. "There`s always a ridiculous smoking deal and when it`s gone, it`s gone," Holland says.

To be sure, setting up successful niche sites is no easy matter. Each site must address the peculiarities of its target group, for example, by using a different lingo and a different tone, Holland says, and must be staffed by reps with the appropriate expertise.

For example, product descriptions on DogFunk are more flippant, befitting the oddball nature of many snowboarders: A description for the Four Square Crochet Ear Flap Beanie says "You could take the time to make (it) yourself, but why bother?"

But it`s not enough just to give a web site an offbeat name and tone, it also must be backed by knowledgeable people. And so each Backcountry site has dedicated customer-service representatives. Backcountry draws its reps--known as gearheads within the company--from a wide variety of backgrounds, including back-country skiers, climbers, snowboarders and hikers. They are assigned to the site which best reflects their expertise. "We filter incoming calls, so if somebody calls DogFunk, we can direct them to a knowledgeable snowboard expert," Holland says.

One of the beauties of multiple sites under one management, however, is that if reps from one site are overloaded, incoming calls will be routed to gearheads on another site. The rep knows which site the call is originating from and answers the call accordingly, Holland says.

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