March 20, 2006
Trading up | Kevin Adams of Kittery Trading Post discusses the retailer's impending move into online sales
By Chris Churchill
Say goodbye to your grandfather's Kittery Trading Post. The somewhat dark and cramped store gramps might remember is gone, replaced by a larger, light-filled building with a fireplace at its entrance. What resembled a frontier-town fort now looks more like a ski lodge plunked down in Kittery's long strip of outlet stores, which attract millions of shoppers each year.
KTP completed the $10 million, three-year expansion last summer, as word circulated that the Midwestern big-boys of the sporting-goods business ˆ Nebraska-based Cabela's Inc.; Missouri-based Bass Pro Shops; and Minnesota-based Gander Mountain ˆ were scouting for Maine locations. KTP President Kevin Adams says he hopes the expansion, which more than doubled the size of the store to 100,000 sq. ft., signals to potential newcomers that his store is an industry player, at least in Maine, and won't wilt in the face of competition.
Now, KTP is preparing another significant step: the August launch of online sales. The move has the company adding at least 15 employees to its staff of 425 and readying plans to open a call center and double the size of an existing warehouse. For a conservative company that has only previously dabbled in mail-order sales ˆ a mid-1970s attempt at a catalog failed ˆ the move is not without risks. But Adams says KTP customers are forcing the company's hand by insisting that it sell online.
Still, some things at KTP remain the same. The store has been owned by the same family since its founding in 1938. It remains a low-key, Maine-owned store on a strip dominated by national chains, and hunting, fishing and camping gear persist as the bedrock of company sales. Mainebiz recently sat with Adams to discuss the recent expansion and the move online. An edited version of the conversation follows.
Mainebiz: Explain the concept behind the expansion.
Kevin Adams: We never really represented ourselves well from the outside of our building. Most people perceived us as being just a hunting and fishing store. We really needed an updated look. We really needed to bring in more natural light. It's a nice refreshing look for our customer. It's clean and open. Now you've got room to walk between racks.
The product mix is the same inside?
The product is the same. We really didn't add new categories into this building. It just made more room for the categories that we had.
The expansion has really proven to be the right thing to do. [Sales] stayed flat for two years during construction, but the fourth quarter of last year was huge for us ˆ breaking records every week. I think in the fourth quarter we saw a 17% increase. It wasn't like that for most stores.
I assume you had to be careful not to alienate your old customers.
Absolutely. We have had such loyal customers for sixty-plus years. You don't want to alienate them because those are the people who made you successful.
Who are your customers?
It's very diverse. On any one day in the summer, you can look out in the parking lot and see pickup trucks and Mercedes. We get hardcore hunting, fishing and outdoors people because of our depth ˆ there's nobody that touches what we do in the hunting and fishing department. You know, we're the largest single-location firearms dealer on this side of the Mississippi. We may be the largest in the country.
You launched the expansion before rumors surfaced about Cabela's coming to Maine?
That's right, although Cabela's has been poking around for years because of their large concentration of mail order that came out of New England. A lot of what our expansion wanted to accomplish was to say, "You know what, Kittery Trading Post is significant."
Nobody wants a Cabela's or a Bass Pro, when you do what we do, to show up in their backyard. We felt that if we showed we have the ability to be of that magnitude and that diversity, maybe they wouldn't show up.
In a sense, you've been competing with bigger retailers anyhow, because they're online and do mail-order business.
We're very familiar with Bass Pro and Cabela's, because for years our customers would come in with one of their catalogs in their back pockets and say, "Do you carry this?" When we priced our products, we set the price based on the local level, but also on the national level, on what Bass Pro and Cabela's were selling items for.
Those company's grew famous because of their catalog sales, which you've never done.
Correct. Although in 1976, when my father owned the business, he tried a catalog and it failed miserably. And we immediately stepped away from it. As a company, we've been very conservative in our approach. We always wanted to stay very focused on what we knew we did well.
The catalog failed for a number of reasons. We didn't have the relationship with the manufacturers, and we didn't know how to market it properly. We didn't have the infrastructure internally to handle the packing and shipping of orders, because we were so used to just doing walk-in business. It's a totally different business.
But now you're returning to that, in a way, with online sales.
We are. And the primary reason we have this new e-commerce initiative ˆ we will be up by August ˆ is because are customers said, "Get on with it." There are a lot of people that shop us once a year, out of Connecticut, New York, New Jersey, western Mass., that can't come to Kittery as frequently as they would like. They're saying, "If you had an online store, we would shop you all the time."
How will it work? Will you have to open a warehouse?
Absolutely. We'll have a distribution center. We'll have a call center to take incoming calls, because even though people are ordering online they might have some questions. The call center is going to have to be pretty significant.
We have a warehouse in York that accommodates a lot of off-site product, and that's primarily where we'll be shipping from. We purchased the warehouse a few years ago, and we know that in short order we're going to have to expand it. Right now, that facility is a little over 40,000 sq. ft. Within the next year, we have plans to build an 80,000-square-foot facility.
Why would someone in Connecticut, for example, shop on the Kittery Trading Post site instead of the Cabela's site?
Because they are a Kittery Trading Post customer. We get four million customers a year, and they just love what we do. They love the feel of our store, how the ambience is laid back. As customers, when we find a place that we really enjoy, we want to frequent it as much as we can.
It's hard to translate ambience onto a computer screen.
It is. We're trying to incorporate some stuff that will make it more unique. I'm not saying we're pioneers because a lot of what we're doing is already being done. However, we know when we service a customer in this store, there are a lot of questions. If you're looking for a firearm or a kayak, we have to ask a lot of questions to understand what your needs are.
So our going into e-commerce, we're going to incorporate a lot of how-tos and selection advice. We'll incorporate live chat ˆ ideally we'd like to have people sitting there so if you have a question about snowshoes, you can have an expert in the area say, "How about this?"
Will there be an advertising push for online sales?
No. We will let our existing customers know, and we'll get those people excited between now and the end of the summer. However, we don't have any plan of pushing it beyond that. We want to start small ˆ and when I say small, because we have 200,000 items in the store, small might be 40,000 items. We have to be working closely with our manufacturers to make sure that we can supply those items that we put up on the Web.
We are not opening it with grandiose notions that everybody is going to love us and we're going to do huge business. We're doing it because we're being forced to. Our customer is telling us we have to. As it grows over time and people become more familiar with it and aware of it, depending on how we decide we want to market it, how aggressive we decide to get with it, who knows where it can go? And it might be a total failure. Maybe we're too late.
KTP completed the $10 million, three-year expansion last summer, as word circulated that the Midwestern big-boys of the sporting-goods business ˆ Nebraska-based Cabela's Inc.; Missouri-based Bass Pro Shops; and Minnesota-based Gander Mountain ˆ were scouting for Maine locations. KTP President Kevin Adams says he hopes the expansion, which more than doubled the size of the store to 100,000 sq. ft., signals to potential newcomers that his store is an industry player, at least in Maine, and won't wilt in the face of competition.
Now, KTP is preparing another significant step: the August launch of online sales. The move has the company adding at least 15 employees to its staff of 425 and readying plans to open a call center and double the size of an existing warehouse. For a conservative company that has only previously dabbled in mail-order sales ˆ a mid-1970s attempt at a catalog failed ˆ the move is not without risks. But Adams says KTP customers are forcing the company's hand by insisting that it sell online.
Still, some things at KTP remain the same. The store has been owned by the same family since its founding in 1938. It remains a low-key, Maine-owned store on a strip dominated by national chains, and hunting, fishing and camping gear persist as the bedrock of company sales. Mainebiz recently sat with Adams to discuss the recent expansion and the move online. An edited version of the conversation follows.
Mainebiz: Explain the concept behind the expansion.
Kevin Adams: We never really represented ourselves well from the outside of our building. Most people perceived us as being just a hunting and fishing store. We really needed an updated look. We really needed to bring in more natural light. It's a nice refreshing look for our customer. It's clean and open. Now you've got room to walk between racks.
The product mix is the same inside?
The product is the same. We really didn't add new categories into this building. It just made more room for the categories that we had.
The expansion has really proven to be the right thing to do. [Sales] stayed flat for two years during construction, but the fourth quarter of last year was huge for us ˆ breaking records every week. I think in the fourth quarter we saw a 17% increase. It wasn't like that for most stores.
I assume you had to be careful not to alienate your old customers.
Absolutely. We have had such loyal customers for sixty-plus years. You don't want to alienate them because those are the people who made you successful.
Who are your customers?
It's very diverse. On any one day in the summer, you can look out in the parking lot and see pickup trucks and Mercedes. We get hardcore hunting, fishing and outdoors people because of our depth ˆ there's nobody that touches what we do in the hunting and fishing department. You know, we're the largest single-location firearms dealer on this side of the Mississippi. We may be the largest in the country.
You launched the expansion before rumors surfaced about Cabela's coming to Maine?
That's right, although Cabela's has been poking around for years because of their large concentration of mail order that came out of New England. A lot of what our expansion wanted to accomplish was to say, "You know what, Kittery Trading Post is significant."
Nobody wants a Cabela's or a Bass Pro, when you do what we do, to show up in their backyard. We felt that if we showed we have the ability to be of that magnitude and that diversity, maybe they wouldn't show up.
In a sense, you've been competing with bigger retailers anyhow, because they're online and do mail-order business.
We're very familiar with Bass Pro and Cabela's, because for years our customers would come in with one of their catalogs in their back pockets and say, "Do you carry this?" When we priced our products, we set the price based on the local level, but also on the national level, on what Bass Pro and Cabela's were selling items for.
Those company's grew famous because of their catalog sales, which you've never done.
Correct. Although in 1976, when my father owned the business, he tried a catalog and it failed miserably. And we immediately stepped away from it. As a company, we've been very conservative in our approach. We always wanted to stay very focused on what we knew we did well.
The catalog failed for a number of reasons. We didn't have the relationship with the manufacturers, and we didn't know how to market it properly. We didn't have the infrastructure internally to handle the packing and shipping of orders, because we were so used to just doing walk-in business. It's a totally different business.
But now you're returning to that, in a way, with online sales.
We are. And the primary reason we have this new e-commerce initiative ˆ we will be up by August ˆ is because are customers said, "Get on with it." There are a lot of people that shop us once a year, out of Connecticut, New York, New Jersey, western Mass., that can't come to Kittery as frequently as they would like. They're saying, "If you had an online store, we would shop you all the time."
How will it work? Will you have to open a warehouse?
Absolutely. We'll have a distribution center. We'll have a call center to take incoming calls, because even though people are ordering online they might have some questions. The call center is going to have to be pretty significant.
We have a warehouse in York that accommodates a lot of off-site product, and that's primarily where we'll be shipping from. We purchased the warehouse a few years ago, and we know that in short order we're going to have to expand it. Right now, that facility is a little over 40,000 sq. ft. Within the next year, we have plans to build an 80,000-square-foot facility.
Why would someone in Connecticut, for example, shop on the Kittery Trading Post site instead of the Cabela's site?
Because they are a Kittery Trading Post customer. We get four million customers a year, and they just love what we do. They love the feel of our store, how the ambience is laid back. As customers, when we find a place that we really enjoy, we want to frequent it as much as we can.
It's hard to translate ambience onto a computer screen.
It is. We're trying to incorporate some stuff that will make it more unique. I'm not saying we're pioneers because a lot of what we're doing is already being done. However, we know when we service a customer in this store, there are a lot of questions. If you're looking for a firearm or a kayak, we have to ask a lot of questions to understand what your needs are.
So our going into e-commerce, we're going to incorporate a lot of how-tos and selection advice. We'll incorporate live chat ˆ ideally we'd like to have people sitting there so if you have a question about snowshoes, you can have an expert in the area say, "How about this?"
Will there be an advertising push for online sales?
No. We will let our existing customers know, and we'll get those people excited between now and the end of the summer. However, we don't have any plan of pushing it beyond that. We want to start small ˆ and when I say small, because we have 200,000 items in the store, small might be 40,000 items. We have to be working closely with our manufacturers to make sure that we can supply those items that we put up on the Web.
We are not opening it with grandiose notions that everybody is going to love us and we're going to do huge business. We're doing it because we're being forced to. Our customer is telling us we have to. As it grows over time and people become more familiar with it and aware of it, depending on how we decide we want to market it, how aggressive we decide to get with it, who knows where it can go? And it might be a total failure. Maybe we're too late.
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