Swiss Market Intel June/July 2017

The price war is raging in Switzerland and it’s putting our retailers through the mill if it hasn’t already brought them to their knees. The difficulties are well-documented: open access to information and to the products themselves across our borders has contributed significantly to the drop in prices, the worry being that costs haven’t dropped, quite the opposite. These days Swiss retailers are constantly having to deal with customers who are bargaining with them, going as far as showing them their stocked items at lower prices on their mobile phones to force them to match it or lose the sale. This type of situation is an almost everyday occurrence and it’s starting to take its toll on some who say it’s hard enough to do “their work”, let alone make a living.

But the Internet and open market are not the only reason for this price war. It seems quite clear that, for the majority of products that concern us, we are in a state of overproduction. This is the case for the winter market (outerwear, snowboards and even more so for skiing) as well as shoes and skateboarding. Aiming for an economy of scale and the constant growth insisted on by brand managers and owners, much more is supplied than demanded which automatically creates leftovers, sales and a parallel market, making it impossible to maintain price levels.

Because of dwindling means, ideas or simply to take fewer risks, many shops are asking their suppliers to help them by working on a consignment or right to return basis. These practises are more and more common, especially because often the shops don’t even have to ask as the supplier offers it from the get-go. Consignment has a direct correlation with overproduction since “orders” are made without risk and even more stock is taken than needed. Another common phenomenon is clear to see, online shops minimising their stock risks by only purchasing the bare minimum while offering a more complete range on their site and working off their supplier’s stock. Some are properly synchronising their site with the supplier’s stock and only use their platform as a sales intermediary. Obviously this minimises risk and suits the retailer but in turn also raises legitimate questions from the supplier about the merits of this intermediary when they themselves could be benefitting from the margins that are left. To ponder…

One area that doesn’t seem to be suffering too much from the price war in Switzerland is surf equipment (not surfwear). Indeed, the prices of boards, wetsuits and other surf accessories are stable and this is probably due to the fact the market is very small and competition is very limited in our country.

Skate shoes are selling quite well this spring, the main brands being Nike SB, Vans, Globe and a bit of DC. Matiheu Rouiller from Lévitation in Martigny for his part is mostly selling Vans, which constitutes over 80% of his shoe sales volumes.

The skate market also seems to be holding up OK. According to Manu from Escape Shop in Lausanne, the skateboard market is going well, equipment is constantly flowing and the appeal of cruisers (wooden ones) continues. According to Raùl at Doodah in Lausanne, skateboarding as a boardsport is appealing to your average consumer once again and of course even more so to the connoisseur. This means that sales have momentum and skateparks have been repopulated by boards and deserted by scooters and rollers.

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