EDITOR'S NOTE: Retail Wednesdays features a different specialty retailer or brand each week, in an effort to spotlight success stories and gain insight from businesses that are continuing to grow in the face of a challenging economy. This story is powered by our friends at Building The Revolution.
Retailer: Exchange Collective & One Way Board Shop
Interviewee: Dave Pankratz
Three years ago, Dave Pankratz and his twin brother Dan launched the Exchange Collective, an omni-channel platform, with the goal of giving retailers the chance to never miss a sale.
As retailers themselves, they wanted a tool that would give customers the retail experience they walked in for, and no reason to walk out and buy their products through another online retailer.
We caught up with Pankratz to discuss the Exchange Collective, how it works and why the brothers’ retail backgrounds inspired them to innovate the process.
Before we get to the future of retail, let’s talk about your retail past. What inspired you and your brother Dan to open One Way Board Shop, how were the years to follow, and what's going on at One Way now?
Since stacking firewood for our dad in 3rd grade to get our first skateboards, [my brother] Dan and I have always loved skateboarding, snowboarding and surfing.
Beginning in junior high we would spend our summer days hanging out at a skate shop in Modesto, California, and I can remember telling Dan "Someday we should open up a skate shop." We always had a passion for this industry and a desire to build a business that supported our passions and the passions of others.
Our retail past actually began before One Way. Just out of high School, Dan and I along with a buddy stated PH-8 skate shop. It lasted only 7 months before we had to close. We had no idea what we were doing, but we did know that we wanted to try it again.
In June 2000, on a handshake deal, Dan took over the shop he was managing and One Way began. I joined Dan in May 2002 and we grew One Way from one small store to four stores and a website.
It was an exciting time and we were putting every dollar back into the business to grow. When the economy started to crash, we closed our Ventura store when the lease was up, lost our main location in Santa Maria due to signing a bad lease allowing a competitor to take our location and our bank wanted our line of credit paid off immediately, from there it was kind of over and we had to hit the reset button.
I'll fast-forward a bit (Although anyone reading this that wants to get the whole story hit me up and we can grab a beer, but it's really not that interesting.) One Way is now a single location in Orcutt, Ca. There are new owners that run the day to day, and they are excited and love the business. Dan and I do still help them a bit and I still like to work the floor alongside my junior high son, who loves setting up a kid with their first skateboard.
For more than 10 years you have been coming up with ideas to bring retailers and brands together through an online experience at the shop level. We have heard many of the ideas about how the brick and mortar experience could be better. What were you seeing on the retail floor that told you something needed to be done?
It's kind of crazy to think that we have been talking about this for so long. Dan and I have always had a desire to innovate in business and through seeing all the changes not just in this industry, but in retail as a whole, we knew there was a better way to get things done. Our passion is in the action sports industry, and from the time we got involved as retailers until today there have been many changes that have not necessarily been for the better.
With brands feeling the need and pressure to increase distribution in channels that previously would have been unthought of, opening outlet stores or company stores and increasing their direct-to-consumer business, as a retailer we couldn’t help but feel betrayed.
However, that's business and we can either complain about it or try to do something about it. That has been Dan and I's motivation over the past few years.
With the increase of online shopping, we still had customers coming in our stores looking to buy from our shops and part of that is because you can't replicate the local shopping experience of a brick and mortar store. We still have the advantage of providing a killer experience, but the struggle has been having exactly what the customer wants. Especially now that customers can find anything with a click of a button or a search on their phone.
How does Exchange Collective work?
The same way airplanes work, Its magic![Laughs] Exchange Collective is a meaningful way (or tool) to allow brands to have all their products available to retailers to sell in their stores, allowing the specialty retailer to be part of their Omni-Channel plan.
Exchange Collective gives the specialty retailer the ability to have an "endless aisle" in store. When a customer is looking for something, whether it is a size, color or style from a brand, if the brand is on EXC, the retailer now has a tool to see if that product is available. If it is, the customer can add it to their cart, pay for it and have it shipped to their home. We like to say we are combining Click and Order with Brick and Mortar.
Combining the in-store experience with online or digital shopping is happening in larger retail chains like Nordstrom that have the capability for omni-channel and our goal is to provide this same ability to any specialty retailer that is looking to adapt to what customers are beginning to expect from retailers. We know that making changes in how we operate in retail is hard and new tools are sometimes hard to implement.
How's it been going so far? What brands and shops are already using the ap?
I'd love to say it has been so easy, all hi-fives and cheers. But, like I'm sure a lot of people that have tried to create something new for a market have experienced, it is not that easy. It has been lots of long days and sleepless nights for our team. Luckily, we have supportive wives and our kids think Top Ramen with hotdogs is gourmet!
We are lucky to have a couple great guys on our team. Jason Strubing from Skate Works has been helping push the rock up the hill, and we have an amazing developer, John Normoyle, who also thinks Top Ramen is all you need to survive! [laughs]
With that said, we have been very encouraged by all the brands and retailers that are making the effort to adapt. We have more than 17 brands, including RVCA, Billabong, Volcom, Sole Technology, S-One Helmets, Spy, and Von Zipper that are on the platform. I also just got off the phone with Rip Curl and they will be adding wetsuits, which should go live before Christmas.
What has also been encouraging is that we have brands outside action sports now hitting us up. We have a brand in the outdoor space that will be piloting EXC in that market in the coming weeks.
We also have a bunch of other great shops like This Skate and Snow, Beatcomber, Help Boardshop, Asylum Skate shop, Boardgarden, Board of Provo, Central Coast Surfboards, One Way Boardshop, Skate Works, and Sun Diego is using EXC in 2 locations. Just recently Surfside Sports invested in 3 new instore kiosks and one counter top kiosk to run EXC. There are more than 90 retailers that have created accounts with EXC and our goal is to get them all successfully using EXC to increase customer loyalty and in store sales.
What is your future plans for the Exchange Collective?
We have a big vison for EXC and lots of future plans. However, right now we are focused on what is in front of us and that is helping the retailers and brands become successful with EXC. We are also working to build a team to provide better customer success, although they must love Top Ramen.
I will say that we are working on some cool updates for 2018 that will make our product easier to use. We are streamlining some key functions, like our product search, category management, multi-item cart and making EXC available on all devices for the retailer, Android, IOS and even desktop.
Our efforts in building this company are to provide a solution for specialty retail to adapt and grow. There is tons of potential and there will always be new brands and retailers looking to grow in a sustainable way.
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