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Migrating a Fourth-Generation, Family-Owned Business Online

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Within the last five years, outdoor gear company Sherper’s has gone from less than one percent of its business revenue coming from ecommerce to now having a 50/50 split between in-store and online. And for this fourth-generation family business, that move to online has been both challenging and rewarding.

As an old-school mom and pop business, Sherper’s has always prided itself on building personal relationships with customers and providing a level of customer service you won’t find with the big guys or digitally-native companies. So finding a way to create a digital experience that allowed Sherper’s to scale its operation yet maintain a personal touch was a top priority for the company. Leading the way in that journey is Nathan Scherper, the President of Sherper’s, who has come a long way from those days of scrubbing toilets for the family business when he was just 12 years old.

On this episode of Up Next in Commerce, Nathan takes us behind the scenes of how Sherper’s built out its ecommerce platform, what its competitive edge is over the Amazons and Walmarts of the world, and how the Sherper’s online platform performed when the pandemic forced more people than ever before online and in search of outdoor goods to cure their cabin fever. Plus, Nathan provides some insights into what it takes to keep a family business running for multiple generations, and why hiring talent is less about skills and more about personality. Enjoy this episode!

Main Takeaways:

  • Hire The Person, Not The Resume: Personality matters and should be a driving force in your hiring process. Most people can be trained to do a job, so the key thing you have to do is identify the person you want to hire and understand their current skill set. Then, gauge what they are willing and able to do for the company and train them to do what makes sense.
  • Compete Where You Can Win: It’s tempting to go all-in on paid advertising to try to compete with the big guys. But if you’re a smaller company or start-up, there’s no way that your budgets will be able to match those of the giants. Your investment is better spent elsewhere, like finding a niche influencer who can form an actual connection with your customers. So find where you get the most bang for your buck.
  • Pent Up Demand: Many people believe that as the world opens back up, the desire to get out and shop is going to lead to a boom for retail, particularly small businesses. Customers have learned that they can buy necessities from the big guys online, so the weekend outings are more likely to be to local shops and restaurants and will lean more toward impulse buying.

For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.

Key Quotes:

“We’ve always been small. We’ve been that small mom and pop shop, but able to do things that maybe some small mom and pop shops can’t do. But I’ve always had that mentality where we know customers’ names, we can go out of our way for customers. I think that’s been one of the biggest things for us — we’ve stayed true to who we are over the 86 years of business.”

“We were pretty much strictly retail. I think we were doing like 0.01% on ecommerce. We had a website, there were a couple items up there. But it really wasn’t a focus just because it was going to be a huge investment. … We really got to the point where I was like, ‘Okay I think if nothing else, we need a website that shows the product that we carry in the stores, because for the local people, that’s where they’re going to first, especially for big ticket items, like a kayak or a tent. They might not be buying it online, but they’re going to research it online before they come into the store.’ For me that was the first step, is we at least need to get the shelves stocked on the website and show the product that we have. Once I realized that could be step one, and if we sold 20 more kayaks a year, it was going to be worth the investment that we put into it, I hired somebody full time for the website and I’ve never looked back from there.”

[On competing against big outdoor brands] “For us, it was finding niche markets online that we could play in. And we’ve been a store that’s always carried unique and hard to find items, and it was trying to figure out what those unique and hard to find items were online that people would come to our site, experience our site, like it, and then maybe come back for something that wasn’t quite as niche because they had a good experience with us.”

“The businesses that we had the best relationship with are the ones that we grew online, the ones where we could sit down at a show or have a meeting and say, ‘Okay, here’s your business strategy? Here’s our business strategy. How do they align? What can we do?’ And those conversations have resulted in growing the business with some of those brands 10, 20 times over in the last couple of years.”

“I think the big thing is again the customer service piece of it. Our ecommerce team is two people, so you’re going to get somebody who knows what they’re talking about. They’ve been with the company for a long time now. If there’s an issue, sometimes it gets bubbled up to me and I’m actually dealing with the customer. It’s still that there’s a face to the name when you’re dealing with us, and I think people appreciate that. If you look at our Google reviews, anything that has to do with online, they’re like, ‘Wow. I was actually able to talk to a person. I was actually able to talk to a person who had used this tent. I was actually able to talk to a person who could fix my issue.’ I always want to stay in that sweet spot where we’re still that small local family owned and operated, I think no matter how big we get online, that has to still be there. And I think if we were ever sacrificing that for volume, we would lose part of our competitive advantage. I don’t think I would ever want to do that.”

“I’ve always hired on personality. I think you can train people on most things that they need to know, or if somebody is really a go-getter, they can train themselves on something…. It’s just been finding the person and then saying, ‘Okay, what is your skill set? What are you willing and able to do? And here’s the job and it’s probably going to change next year, and as long as you’re willing to do that, we’ll keep growing.’”

“For us being small independent retail stores in small local communities, I think we’re going to see a boom when everybody feels like it’s safe to go back out and shop again. I think maybe people aren’t going to go back to Walmart or Walgreens or those places quite as much because they learned they can buy online and get their necessities there. But I think the like, ‘Oh, it’s a nice sunny Saturday, let’s go shopping in one of our towns and hop around and go eat at the local restaurant.’ I think we’re going to see a resurgence of that too. So I think some of the more mom-and-pop, small, downtown, middle America stores are going to see a little bit of a resurgence.”

Mentions:

Bio:

Nathan Scherper is the President of Sherper’s, an outdoor goods retailer based in Wisconsin. Sherper’s is a fourth-generation family business, which Nathan joined full-time in 2015. Prior to becoming president of Sherper’s, Nathan spent six years working in corporate retail for Abercrombie & Fitch.

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Transcript:

Stephanie Postles:

Welcome to Up Next in Commerce. This is Stephanie Postles, CEO at Mission.org, and your host of this lovely show. Today, I’m chatting with Nathan Scherper who currently serves as the president at Sherper’s. Nathan, welcome.

Nathan:

Hi, good to be here.

Stephanie Postles:

Good to see you. I feel like I need to be like, coming live from Lake Michigan right? Is that where you’re at?

Nathan:

Yeah. The shores of Lake Michigan. I feel like I’m that meme of what your job is, and what your friends think you do, and your family thinks you do, and your coworkers think you do. And I’m hitting the stereotype right now at camping, but I think it’s only the second time I’ve been camping in the last two years because it’s been a busy run.

Stephanie Postles:

Wow. I was thinking, I’m like, “This must be Nathan’s thing.

Nathan:

No.

Stephanie Postles:

He’s out in the woods living his best outdoor life to really get the brand right.”

Nathan:

Yeah, for sure.

Stephanie Postles:

That’s fun. Sherper’s is an outdoor retailer, fourth generation family owned and operated, and I want to hear all about the background, starting back in like 1935, because we haven’t had on many companies that have been family owned and operated for that long. And your company especially seems like it’s gone through many transformations and changes over the years. And I was hoping you can start with the story and what was Sherper’s doing back in the ’30s?

Nathan:

1935, it was opened up by my great-grandfather, Sam, and it was actually a men’s haberdashery. So it was church ware, it was like top hats and canes and suits, and that’s what they sold.

Stephanie Postles:

I didn’t know what haberdashery was, I literally Googled it. I was like, “What is this word?”

Nathan:

Yeah. That’s what it started out as. And then my grandfather and his brother, they fought in World War II, I believe it was. And when they came back, there was just a ton of army Navy surplus because the government was selling off all the uniforms and the gear and everything, and you can buy it really, really inexpensive at auctions. So they thought it would be a good idea to buy all this stuff up, bring it back and sell it. And that was when the camping boom started, and a lot of the stuff that the military was using because they were basically camping, they bought that all up and sold it to people in Wisconsin to go camping.

Nathan:

And so it was a surplus store probably from the ’50s really up until today, we still carry surplus, but then we started to transition to more of a general outdoor store, I would say, in the ’90s and picked up brands like Columbia and Eureka tents and some of the more name brand camping, brands that we know of today.

Stephanie Postles:

Awesome. So you entered the business in 2015, or is that when you officially became [inaudible]?

Nathan:

Yes. That’s when [inaudible] I came back at my first day on the job was when I was 12 because I really, really wanted to work. And I worked in a store location where my aunt was running the store and first day I had to go around the store and write on a note pad, every single product that we carried. And if I didn’t know what it was, we had to go back through the store and my aunt had to tell me what it did. And then after I did that, she made me clean the toilets. So that was my very first day on the job. But worked throughout high school as a summer job. Once at college had a six year run in corporate America at Abercrombie and Fitch. And then after that came back into the family business and then the role I’m currently in now.

Stephanie Postles:

Okay, cool. Did you always know that you were going to come back and be a part of the business again? Or were you like one of those people, it’s like, I’m not doing the family thing, I’m off to do my own thing for awhile?

Nathan:

It was always in the back of my mind. I thought it would be a really cool thing. There was zero pressure from my family to come back into it, if anything, I think they were like, go and do your own thing. Because I think sometimes you want the opposite for your kids of what you had. So I think my dad was like I wish there might’ve been something outside of the family business. I wonder what I could have done. So he said, “Go explore that.” But I did that for six years and I loved my corporate American job. I learned a lot of things, but really I just wanted to have something that was more entrepreneurial. And if I succeeded, it was because of me. And if I failed, it was because of me. And what better business to go back into, because it had been established, but it needed some things to continue on into the next generation and yeah, I just never looked back and it’s been a great choice.

Stephanie Postles:

Yeah. That’s very cool. So thinking about a company that’s been around for so long, I’m sure there are a lot of lessons and themes that you guys look back on where you’re like, wow, this is what kept us running. Because thinking about like staying running for that long and staying relevant, it seems very difficult. So what lessons or theme did you guys have around the business that maybe it’s still true today?

Nathan:

I think it’s kind of cliche, but customer service first and foremost. We’ve always been small. We’ve been like that small mom and pop shop, and being able to do things that maybe some small mom and pop shops can’t do, but I’ve always had that mentality where we know customers’ names, can go out of our way for customers. I think that’s been one of the biggest things for us as we’ve stayed true to who we are over the 86 years of business.

Stephanie Postles:

Yeah. Cool. So you guys did not have an ecommerce presence five years ago right? When you entered into the business, were you just strictly retail?

Nathan:

We were pretty much strictly retail. I think we were doing like 0.01% on ecommerce. We had a website, there were a couple items up there. But it really wasn’t a focus just because it was going to be a huge investment. We had to have somebody who knew what they’re doing and run it and then just the technology and the labor behind it, it was going to be a huge leap of faith. It wasn’t anything that I think my dad and my brothers in the business with me were willing to do at that point until we set up a plan and trying to figure out what the best jump into it was going to be

Stephanie Postles:

What did the early days of strategizing look like to try and convince people to come on that journey with you and show them that this is a good way to go?

Nathan:

Yeah. One of our store managers was the one who did the first website. He learned how to do the backend things of the website and build product. So we had him a couple hours a day off the floor building that, putting product up. And we really got to the point where I was like, “Okay I think if nothing else, we need a website that shows the product that we carry in the stores, because for the local people, that’s where they’re going to first, especially for big ticket items, like a kayak or a tent. They might not be buying it online, but they’re going to research it online before they come into the store. For me that was the first step, is we at least need to get the shelves stocked on the website and show the product that we have. Once I realized that could be step one, and if we sold 20 more kayaks a year, it was going to be worth the investment that we put into it, I hired somebody full time for the website and I’ve never looked back from there.

Stephanie Postles:

That’s great. So now are you more 50/50 with like retail versus ecommerce sales? Or what does it look like today a couple of years later?

Nathan:

In 2020, we’re almost exactly 50/50 again, coming from less than a percent five years ago.

Stephanie Postles:

Wow. Very cool. And I’m guessing the whole pie also increased. It wasn’t like, “Oh it cannibalized retail-

Nathan:

No.

Stephanie Postles:

… now you’re getting more access.”

Nathan:

Yeah. If anything, I think it helped local retail again, just letting people in our area know what we have to come into the store for it. It was easy for them to research something on Amazon, but then if they were just like, “Oh, I’ll buy it on Amazon rather than coming to the store. Now, we’ve got the website that they can research it on our site and either come into the store or buy. So I think the local market it’s helped especially with COVID for people who still wanted to shop with us when we’re closed. It absolutely helped. And then it opened up the infinite market share of the internet basically.

Stephanie Postles:

Yeah. So then you had to start finding new acquisition channels to connect with people online where maybe you’re used to the more local scene, like bringing people into the retail locations. Tell me a bit about how you had to shift your mindset around gathering new customers that maybe you weren’t tapping into before, or even knew how to connect with?

Nathan:

Yeah, I think it happened organically. We didn’t really do a lot of paid advertising. Initially we had a pretty good social presence that we were doing and I think the product of the website was really good, but we really didn’t do a whole lot of paid advertising right away. And I think for us, it was finding niche markets online that we could play in. And we’ve been a store that’s always carried unique and hard to find items, and it was trying to figure out what those unique and hard to find items were online that people would come to our site, experience our site, like it, and then maybe come back for something that wasn’t quite as niche because they had a good experience with us.

Stephanie Postles:

What are some unique and hard to find products? I’m trying to imagine, like in the outdoor world and like what’s unique.

Nathan:

Yeah. I think we had like some … I think a lot of it was at first we were a surplus store and that was Army Navy surplus, but it was almost like how can we transfer that to current goods? And maybe it was a last year model of tents or maybe it was a last year color of a Patagonia something, and we had that and we might be the only one that had it left. We could probably offer it at a discount because we might have bought it at a discount as an overstock, and I think that brought a lot of people in initially and it’s still part of our business model. Not all customers need the latest and greatest of something. Even in the outdoor space for things are fairly technical, it doesn’t change a whole lot your year over year. So if we could offer that value to our customer of something that REI didn’t have, or another big player didn’t have that drew people to our website just like it has our stores.

Stephanie Postles:

Yep. You guys have a lot of good brand partners. Did that get accelerated once you had an ecommerce presence, or did you always have a lot of partnerships even before that?

Nathan:

We had a lot of great partnerships honestly. Even some of the bigger brands we work with are still family owned and operated businesses, so we kind of always had that tie. But I would say the businesses that we had the best relationship with are the ones that we grew online, the ones where we could sit down at a show or have a meeting and say, “Okay, here’s your business strategy? Here’s our business strategy. How do they align? What can we do?” And those conversations have resulted in growing the business with some of those brands 10, 20 times over in the last couple of years.

Stephanie Postles:

Yeah. The one thing I’m thinking about is like with a company that has a bunch of products and brands that they’re curating and selling, how do you keep your customer to keep coming back to you? I’m imagining, okay, I go and I buy a Patagonia jacket from you guys, and I had a great experience, but then maybe in I don’t know, three or five years when I want a new one, how do you make sure that I remember you instead of just going to Patagonia and just buying directly from them?

Nathan:

Yeah. We have all the traditional things where we’ll put a thank you 10 coupon in the box, and tell a little bit of the Sherper’s history. We’ll get them on our email blast. We’ll try to get them to follow social media. But I think the big thing is again the customer service piece of it. Our ecommerce team is two people, so you’re going to get somebody who knows what they’re talking about. They’ve been with the company for a long time now. If there’s an issue, sometimes it gets bubbled up to me and I’m actually dealing with the customer. It’s still that there’s a face to the name when you’re dealing with us, and I think people appreciate that. If you look at our Google reviews, anything that has to do with online, they’re like, “Wow. I was actually able to talk to a person. I was actually able to talk to a person who had used this tent.

Nathan:

I was actually able to talk to a person who could fix my issue.” I always want to stay in that sweet spot where we’re still that small local family owned and operated, I think no matter how big we get online, that has to still be there. And I think if we were ever sacrificing that for volume, we would lose part of our competitive advantage. I don’t think I would ever want to do that.

Stephanie Postles:

Yeah. I love how you guys lean into the story and go all the way back to the early days of like how it started. I want you to tell a bit about the name and what happened, of like why your last name does not match the company’s name, and just like how you lean into that story to really … Yeah to me, it sells the vision of the company and makes me connect more than I would with maybe another brand that doesn’t have that same kind of story.

Nathan:

Yeah. So that’s one of our favorite stories [inaudible] customers too. So my last name is spelled S-C-H-E-R-P-E-R, Scherper, and the store is S-H-E-R-P-E-R. And the story goes that when my great grandpa’s Sam went to open up the first store location, the last thing he bought was the sign, but he didn’t have enough money left for a sign that would fit enough letters for the full, last name. So he dropped the C from the name and it’s been the same way ever since. And for us, like that resonates with me, because I just think of like my grandpa and my dad just being super frugal and watching expenses, and making sure that you’re not overextending yourself. It’s evolution not revolution as we go forward.

Nathan:

So like that sticks with me and then even just our surplus nature and off-price nature, sometimes it doesn’t need to be perfect. What is the cost benefit of entering into something? It might not be the best and brightest, but does it work and can you afford it? Okay. Go for it. And so that resonates with me too. We have a section of our store that we’re just starting too, that we’re going to call The Lost C. It’s the C that we dropped from the name and it’s our clearance and off-price section in the store to play up just that savings mentality.

Stephanie Postles:

That’s great.

Nathan:

It’s been a message that stuck with me, for sure.

Stephanie Postles:

Yeah. It’s fun that you’re finding new ways to incorporate the story and not changing it, but finding new marketing ways to sell the story and connect with the consumer now, that might be a little bit different than what people wanted to hear about back in the ’30s and ’40s. How do you find ways to capitalize on that and sell it in a way that is still is highlighting your company and the great products you have, but also is making sure people continue to hear about what’s behind the company? And like you said, the clearance thing, that’s such a good marketing tactic and would easily pulled me into this story where a lot of people don’t have that advantage.

Nathan:

Yeah, so I think, again, it’s just like, we are a small locally owned and operated store, and that’s always been a message, I think as of late, and especially during COVID I think that was a message. But I think people realize that they can get a different level of service from them than they can the Amazon’s of the world. And like, yes, Amazon is always going to win, or most of the time they’re going to win on the speed, but they’re not going to do certain things. And one of the things that happened during COVID that we had always done, but we played up is we sell canoes and kayaks while we were shut down, we did free delivery of all our canoes and kayaks within a 25 mile radius around the store. And actually it ended up probably being 100 or 200 miles in some cases, and my brother and I just delivered boats to people.

Stephanie Postles:

Oh my gosh.

Nathan:

To keep things going, we had a one trailer, we bought another trailer, and as people were buying boats, we said, “Okay, yeah, we’ll be there tomorrow. If you buy it now I’ll have your boat there tomorrow. You don’t have to come to the store. You don’t have to worry about the rack for your car. Pay over the phone and it’ll be there tomorrow.” And Amazon can’t do that. Walmart can’t do that. There are places that can’t do that. So us being small and flexible and being able to do that, that’s still, I think how we can win and have that competitive advantage.

Stephanie Postles:

Yeah. And how many retail locations do you all have right now?

Nathan:

We have three brick and mortar. We had two when I started and we opened up a third in 2018.

Stephanie Postles:

Okay. Next I’m thinking about you and your brother trying to deliver all these boats and that’s wild. It also seems like you have to have employees of a certain mindset. Even when you’re talking about the store owner or manager who was like doing your website, that seems like such a different employee than maybe other retail locations have access to.

Nathan:

Yeah.

Stephanie Postles:

Or delivering boats.

Nathan:

You hit it on the head. That’s exactly it. Everybody’s day is different every single day, especially as the owner and president my day changes all the time, but our ecommerce person, if we get 16 pallets of deliveries in one day and we’ve got to fit them in the background, she’s down there unpacking boxes. If somebody is out sick and on the ecommerce team, my manager is filling in. So everybody knows what to do, and that can be frustrating sometimes because it pulls you away from work. I’m not going to say employees are always super happy that they’re working on one thing, they get pulled to another, but they’re always willing to do it. And that’s really how I hired and how the people that have succeeded with us are just willing to do anything on any given day. And we’ve reaped the benefits from it because there’s never, “Oh, that’s not my job or I wasn’t trained to do that.” It’s just, okay, this is our company, this is our business. I’ll do whatever it takes.

Stephanie Postles:

Yeah. How are you sourcing and recruiting people like that? Because a lot of people will come into an interview and say, “Oh yeah, I’ll do whatever it takes.” But then when it gets down to it, I don’t think everyone does. So how do you identify that in someone? What kind of qualities are you looking for? What questions are you looking for that’ll find people who are new scrappy and have grit and ready to get their hands dirty, but then also be placed wherever. Like what are you looking for?

Nathan:

Yeah. I think part of it is like we’ve had some long-time employees. So just yesterday we celebrated the 20th anniversary of one of our employees. He started when he was 55 now he’s 75. We’ve had people for a long time. We’ve got another employee that’s been there for 25 years that are not family members, and a lot of family members have been there for awhile. But I think everybody else is … I’ve always hired on personality. I think you can train people most things that they need to know, or if somebody is really a go getter, they can train themselves on something. I think it has been personality. Our ecommerce person as we were going with, she was one of the first people that I didn’t really know, and had met off of a job recruiting website, but the interview went really, really well and I liked her.

Nathan:

She worked for us for about a year and she really liked it. She said, “My husband’s thinking of a new career, would there be something at Shepers that you think would work for him?” And I was like, well, I had met him a couple times, and I was like, “Yeah, let’s talk.” And he was a great guy. She was obviously awesome for me and married to him. So I was like, yeah, let’s hire him. We’ll figure out something for him to do. He ended up managing like our shipping and receiving department. He’s now transitioning over to our website and some of our third party marketplaces. It’s just been finding the person and then saying, “Okay, what is your skillset? What are you willing and able to do? And here’s the job and it’s probably going to change next year, and as long as you’re willing to do that, we’ll keep growing.”

Stephanie Postles:

Yeah. I love that. It’s more focused on yeah personality and mindset, and as long as you can learn, you’ll be good, so yeah [inaudible]. Hang on one sec. When you’re thinking about … When I go back to like COVID questions, which I’ve avoided those, but for you guys, it seems relevant because outdoors expanded a ton, everyone was doing outdoors things. I’m sure you guys grew a ton. What were some of the challenges this past year and a half or so around probably getting a lot more interest in sales and new customers coming in and inventory things? What kind of challenges did you guys experience?

Nathan:

Yeah. Like to take one step back, the first challenge was March of last year, are we going to be around for another year? I think that was the big thing. I had a date on the calendar where it was like, okay, if we can’t do the revenue that I’m expecting us to do what we’re going to do. And then all of a sudden it was with this boat thing, I was talking about the deliveries. I was going into the store and just doing some things at the store, paying bills and get ready for when we would open up, and the phone was ringing off the hook and it was … I was just so upset that I couldn’t reach those customers, so I ended up having the phone at the store rerouted to my cell phone, so I was getting all the calls.

Nathan:

All of a sudden I was like every day somebody was like, “Do you sell kayaks? Do you sell kayaks? Do you sell kayaks?” And for me it clicked. It was like, “Oh my god, this is all anybody has been to want to do is go outside.” So probably two, three weeks in the lockdown, I was like, “Okay, we need to beef up. We need to go after this inventory.” I hadn’t canceled any of my orders because I didn’t want to do that to my vendor partners. I wanted to see what was going to happen. And then all of a sudden I got on the phone with them and I was like, I want to double my order. And all of them were like, are you crazy?

Nathan:

Like everybody is canceling their orders right now. And I was like, no, this is going to explode. So it was just getting all that inventory in. Luckily we had the inventory to do it because there was a couple bike stores in my town that they were out of bikes by the first week they opened up. So although the industry was doing well, they couldn’t get the inventory and they had to basically shut their stores down again because they didn’t have anything. By that, like, “Okay I want to know what people are calling about. I want to know what my customer wants.” Like, that’s always something that we put at the forefront. And when I found that out, I was like, “Okay, we’ve got to double down on this.”

Stephanie Postles:

Yeah. Do you think that would have been something you would’ve learned from maybe your customer support team or other employees, or is that something where you were like, you really just need to get in there and get your hands dirty for maybe twice a week, every quarter, have calls come to you, so you hear the trends and can stay on top of things?

Nathan:

I think both. I think I have a great team and I think they use their … They’re all super, super intelligent people and a lot of times bring stuff to me that I’m not saying. I think that it probably wouldn’t come to me, but I think experiencing it myself, especially in a time with so much uncertainty and especially when everybody was worrying about everything, I don’t know if an employee would have come to me and been like, “The phone’s ringing off the hook, you should order more kayaks when you’re not generating any revenue and paying us all our paycheck right now.” I don’t know if anybody would have come and told me that. I think in that specific instance, I might’ve not have had the confidence to say, “Okay, let’s go after this.” If I hadn’t done it myself.

Stephanie Postles:

Did you experience any issues with like the supplier running out of inventory? Because it seems like it’s such a [inaudible] of like sure you can order more, but then if they didn’t order more of their parts and they were maybe planning for a pullback that could also negatively impact you guys.

Nathan:

Yeah. Honestly, I would say it’s impacting us more this year because we’re finally feeling it. I think I was able to scoop up a lot of the inventory that maybe people canceled last year and we were able to get, and then I think when everybody realized it there was … the industry boomed and I think those suppliers probably didn’t have as much on order as they thought. And then just everything that’s happening with shipping and logistics and the nightmares that are going on right now with that, it’s been tougher to get inventory. It’s finally catching up to us, but I think since we were the ones who supported those companies before and supported our vendors before and have good relationships over the past years, they’re definitely doing everything they can for us. Whereas some other retailers might not be getting quite the same treatment and I’m super appreciative of that.

Stephanie Postles:

What are you planning for, for the next couple of years now that I feel like you were a little bit ahead just because you were able to see what your customers wanted, you jumped on it really quickly. Now, I’m like, well, let’s peek into the future. What are you guys planning for now in terms of [inaudible]?

Nathan:

I think luckily we were already doing a lot of the things that the big guys are trying to pivot to, like the buy online pickup in store, or the ship from store. Like we didn’t have a distribution center so we shipped from store. We pulled product off the store and we shipped from store. So all of that stuff that has these fancy names and acronyms, we were already doing just out of necessity. Curbside pickup we were already doing. “Yeah. Okay yeah. We’ll take something onto the parking lot, and put it in your truck.” We’ve always done that. I think that stuff, I think we’re going to be set for.

Nathan:

I think it’s just looking for, from the ecommerce side, I think it just additional channels to sell, and things are changing so rapidly just with different marketplaces and how you can sell on social media, and just making sure we keep up with that and making sure that the brands that we do have good relationships with, are we doing them the best service? Is their product getting out there in all the different ways that Sherper’s can get it out there and continue to grow with them that way?

Nathan:

I think that’s going to be a big piece. And then for us being small independent retail stores in small local communities, I think we’re going to see a boom when everybody feels like it’s safe to go back out and shop again. I think, yeah, maybe people aren’t going to go back to Walmart or Walgreens or those places quite as much because they learn they can buy online and get their necessities there. But I think the like, “Oh, it’s a nice sunny Saturday, let’s go shopping in one of our towns and hop around and go eat at the local restaurant.” Like I think we’re going to see a resurgence of that too. So I think some of the more mom and pop small downtown middle America stores are going to see a little bit of a resurgence. I’m excited to see that too.

Stephanie Postles:

There’s definitely a lot of pent up demand I think for people wanting to get back in person and be together and experience going to a store and being able to see the curated collections and doing all the things that they haven’t been able to do in a while. How are you all thinking about creating that environment or maybe you just leaning back into it when you haven’t done it for a little while and doing new things?

Nathan:

Yeah. I think it’s leaning back into it, and I think even just like … We had decent traffic in our stores. We’ve got fairly big stores and they’re never super crowded, so we’ve had a decent amount of people come back even after the lockdown. But I think just leaning back into that customer service and just like dealing with real life human beings, I think like everybody’s getting zoom fatigue and a little bit of work from home fatigue. Like, yeah, it’s nice, and yeah we might want to continue on with it a couple of days a week, but we don’t want to be sitting in our underwear at our desk on Zoom five days a week. Like we want to go back to a little bit of normalcy with that. So I think it’s the same thing.

Nathan:

Like, okay, yeah, Amazon was great. The getting grocery delivery was great, but like it’s also great to go into a store and talk to somebody who knows what they’re talking about, and maybe they talk to you into something that you weren’t necessarily thinking. You thought you wanted this tent, but after talking through it with a human being, who’s been in the tent, who can tell you their stories of why they like something, that experience you maybe haven’t been having over the last couple months. I think just again, leaning back into that is going to be key for us.

Stephanie Postles:

Yeah, I agree. It makes me think of this one show I watched, I think the guy is like Tim Allen’s the name. It was like the whole outdoor world show and they, it reminds me of I forget what the other store is, but I’m not obviously big in outdoor stores, but you walk in there and it’s like a thing where you’re like, I’m going to spend, it’s like Costco. I’m going to come in an hour to walk through this store and see all the new products and talk to people, like I’m committed when I go into stores like that. And yeah, I love thinking about like different partnerships and events and just where the world could be in another, hopefully six months to where we can get back out there and explore again.

Nathan:

Yeah, absolutely.

Stephanie Postles:

When you’ve been going through this ecommerce journey, launching a website, like what are some lessons that you’ve gotten from going through that experience these past couple of years and what are you doing differently now?

Nathan:

Yeah, that’s a good question. I don’t know. I think I’ve always been like, we need to evolve, I want to evolve, but I’ve been cautious as we jump into stuff. And I think the biggest thing was trying to figure out what’s the investment going to be, and if it doesn’t work out what would the effect be on the business? If we through X amount of dollars at something, and that never came back in, what would that happen? And I think … in one sense, I think it’s been good because we’ve been cautious and the things that haven’t worked out that haven’t hurt us that much, and the things that have worked out have been awesome, but just continuing to seek those things out and understand what they are, and it’s something that just knowing that different things are out there, and are potentials and possibilities is important. So doing as much research as I can in what might help us grow, especially from the ecommerce standpoint.

Stephanie Postles:

Yeah. So what experiments haven’t worked out and what things are you betting big on right now that you’re excited about?

Nathan:

I think the one thing that we did is we went fairly heavy into pay digital advertising at some point and we still do it, but I think … kind of like we were talking about how can we win against the Patagonia selling direct or Patagonia and REI? Well, we went after that one point and pretty quickly I realized we can’t compete. Like we don’t have the advertising budget to compete on Patagonia’s number one jacket. I think that was probably one of the biggest lessons that we entered into and said, “Okay, although that’s working for some of the big guys and people are … the Google shopping ads are huge for some people that wasn’t going to work for us. I think that was probably the biggest learning. I think for us, it’s looking at just technology, that’s going to help us scale, and help us still have the service level.

Nathan:

We do still have the feel that we do, but be able to handle some of the backend logistics. I think that’s the biggest thing we’ve made. Last year we made a decent amount of investment in it, and then coming out of COVID, we’ve made a little bit more investment in some of those things, just to have us be able to handle the volume that we saw over the past year.

Stephanie Postles:

Yeah. Are you looking into different types of content? Because to me that feels like a more level playing field now where you can compete against the bigger brands, because it’s essentially like who’s more creative? Who has the better TikTok videos? Who can hone in their community and their tribe to follow them wherever they go? How have you guys thought about things like that maybe aren’t as costly and you can actually [crosstalk]?

Nathan:

Yeah. I think that’s like the biggest low hanging fruit for us. We do a good job with social media, just posting and feeling very authentic and natural. But it’s not something we spend a ton of time on. I think it’s always like an afterthought and we have Facebook, we have Instagram, but we really haven’t started up Snapchat or TikTok. And our customer demographic, at least in the stores has always been a little bit older, so it was like, okay, if we do that most of our customers are going to laugh. They don’t even know what TikTok is. But it’s how can we get that next customer in, now when we’re expanding into the ecommerce world there’s a whole huge untapped market there.I think that’s a low hanging fruit for us and something that we talk about a lot.

Nathan:

I think at some point that’ll probably become somebody’s full-time job. Again, I think that’s one of those things, okay, do we want to hire somebody on, have another salary on the books for social media manager? Or can we get by and have everybody do it a little bit? And then what’s worked for me in the past is at some point we’ll be like, “Okay, this isn’t working. We’re at the point where we can see we’re getting the returns on it. I don’t have enough time to do it anymore. My ecommerce manager doesn’t have the time to do it anymore. My warehouse manager, who was helping out a little bit doesn’t have time anymore, so okay. We need to invest in this person.” And we’ve been lucky because every time we’ve done that, we’d find the perfect end individual for that. So yeah, I would say in the next year or so I could see that happening for sure.

Stephanie Postles:

I’m imagining a whole screenplay of like your guys’ story and starting up and changing the business, and going through its ups and downs, and it seems like a catchy … a good product placement type of piece of content to create that would be evergreen and yeah continue to have returns for a long time just because the story is so different than [crosstalk] other brands.

Nathan:

Absolutely.

Stephanie Postles:

I love that. Also, yeah. It’s fun thinking about all your employees chipping in. Like your warehouse manager doing social media and stuff or whatever it may be, that’s great. Did you have to change your backend logistics once you went into the world of ecommerce? Before it sounded like you were pretty local based and you were shipping from your stores. Once you have orders coming in from Florida and California and Seattle, like, how did you think about adjusting your backend to meet those needs?

Nathan:

Yeah, absolutely. I think it was … A lot of, it was like research and setting some of those things right away, but usually it was, a problem would occur and we’d be like, “Okay, there’s got to be a solution out there to fix this problem.” And nine times out of 10, there was, because somebody had experienced it before us because we were a little bit later to the game. But there was a lot that went into it. I think it was 10 years ago that we computerized the business before that it was just like an old register, like there was nothing. There was no inventory, anything like that. So that was before I came in. But that was the first big thing is that we actually computerized everything. And then when I came in, it was switching over our website hosts.

Nathan:

That was a big thing for us, and our stock and stores didn’t sync with our stock online. So working with our point of sale system. We’ve got a great point of sale system that it’s a small, independently owned and operated thing. So if we want anything, we go to him and say, “Hey, we need this to work with this. Can you do it?” And nine times out of 10, again, he’s able to do that, so that’s been great for us. It was syncing that stock right away. And then I think a lot of it then was on the backend of, okay, how do we manage all these orders coming in from different places with stock being in different store locations, and some of the software that’s out there as been great for us, but that had been some of the bigger investments in the last year.

Nathan:

Especially as volume went up because there were times where you could limp along and we were okay and we weren’t making the stakes, but all of a sudden if we were going shipping five packages in my smallest store location to 30 packages a day and there’s only two or three employees who are working there, it needs to be as simple as possible to be able to keep up with that. So it’s something that came out of necessity.

Stephanie Postles:

Yeah. Now that you’re quite a few years in, if you were to look back from when you’re first starting out, what advice would you give yourself from [crosstalk] you know now?

Nathan:

It’s going to be harder than you think it is. I think like-

Stephanie Postles:

Always.

Nathan:

I thought it was going to come into this and I was like, “Okay I’ve got my experience from corporate retail. There’s things that like the business is not doing. We’re a little bit antiquated. All I have to do is like build a website and then sail off into the sunset and it’ll be great. And it was a lot more work than I thought it was. And the corporate world is stressful because you don’t have control over everything. But so like it wore on me after a while, but I think having your own business there’s things that are better about it, but then there’s also things that are a lot more stressful about it. So like when COVID hits, having to worry about like all my employees paying their mortgage and do I keep paying them their paycheck, and things that you just don’t worry about when you work for a big corporation. Like the worst thing that can happen is you get laid off and you have a good resume and you go on and you get your next job.

Nathan:

I think that’s been something that I didn’t really think … I knew about it, but I didn’t think it was going to be as impactful as it had been over the last five years.

Stephanie Postles:

Yep. Yeah. It’s definitely way different.

Nathan:

Yes.

Stephanie Postles:

I as well came from the corporate world and yeah, running a company and having to think about employees and when things aren’t going great sometimes, being like, oh this is so hard. Trying to figure out what’s the right thing to do, and oftentimes not having a playbook and yeah, it’s a struggle.

Nathan:

And sometimes you don’t have as many people to bounce ideas off of, and it’s your decision at the end of the day. And if you choose wrong, it comes back to you. I had said that earlier, that’s one of the reasons that I wanted to leave corporate America, but that’s a tough 11 o’clock PM decision sometimes, and sleep on it one night and then you got to go and buck stops at you so …

Stephanie Postles:

Yeah. Yes, I feel that. Were there things that Abercrombie that you learned that you brought into the business, or you’re like now I’ve been in a whole different well, I guess omnichannel world selling online retail, like a big brand. Is there things that you picked up from there that you tried to incorporate into Sherper’s?

Nathan:

For sure. I was a merchant there is what they call it, and it’s basically a hybrid between a … you work with the design team and manufacturer all the clothing, so basically from the sketch phase to when it actually gets sewn in the factory. That whole process was me and then basically the buying. So all the buying really helped out all the retail math and knowledge of how to look at things, and what reports to pull and things like that, that really helped out. But then from that like manufacturing standpoint, that helped me out too. We have some private label goods, so again, being unique and getting what our customer wants. We have a few tents and backpacks and down jackets and things like that, that with some of that experience that we had, I was able to work with some of my vendor partners and manufacturer that and get things that maybe aren’t in the market.

Nathan:

It’s not maybe something that’s going to sell really well in Denver, Colorado, or Seattle, Washington, where some of these big outdoor retailer companies are based, but in Milwaukee, Wisconsin, this is all anybody wants. So I could go out manufacturer, bring it there, and some of those things have been my best selling items in the store. So that was definitely something that was a big benefit from having that experience at Abercrombie.

Stephanie Postles:

Yeah. That’s really cool. Is that something like the white label products? Is this something you’re going to lean into more over the coming years?

Nathan:

Yeah, I think so. And as we’ve been able to scale, and as we’ve been able to scale ecommerce like that’s really helped out with it, because in order to do that, you need to order minimum order quantities. So when we were only two brick and mortar stores to 1,000 jackets, that was a huge order and that might last us two or three years, so we wouldn’t really see the returns on that right away. But now being three brick and mortar stores and opening up the ecommerce side of it, I can do some more of that private label because I have some in the more buying power behind it, so I can see us expanding on that for sure.

Stephanie Postles:

Very cool. All right, well let’s jump over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I’m going to ask a question and you have a minute or less to answer. Are you ready, Nathan?

Nathan:

I’m ready.

Stephanie Postles:

Okay. If you had a podcast, what would it be about and who is your first guests be?

Nathan:

That’s a good one. I think it would be about like mental health. I think that’s a topic that’s become bigger and bigger over the last couple of years, and I think it’s important. And I think maybe not as like self-help, but I think just talking about how people deal with certain careers and certain lifestyles, and people who don’t have a care in the world, and people who all they do is have panic attacks. I think just talking about how people cope with different things. And somebody … I’m not a huge basketball fan, but Kevin Love is somebody … He’s a basketball player who’s been really outspoken about his mental health and just how he deals with being in the spotlight and having a stressful job. It’s not maybe a doctor, but to have everybody’s eyes on you and everybody counting on you, he talks about that a lot, and it’s cool to see just different people’s mindsets.

Nathan:

So I think he would be somebody that I’d have on and just talk through the process of how do you live life? How do you set your life up for success both personally and professionally, and what makes you tick? I think that would be my focus for sure.

Stephanie Postles:

Yep. That sounds good. What’s the nicest thing anyone’s ever been for you?

Nathan:

Ooh, that’s a good one. I would say probably the, just like the support of my wife. She’s in the other room right now and letting me do this. We’re on our first day of vacation, so we got married … We got engaged, married, and now we’re pregnant in the last 365 days.

Stephanie Postles:

Wow congratulations. That’s interesting.

Nathan:

Yeah. So I think just like the sport, especially over this year, just being there for me, it’s being the spouse of somebody that has their own businesses is probably the hardest job, and the second hardest job is having your own business. I think just like being there for me and being that support system has been awesome.

Stephanie Postles:

Yeah, it’s so needed when running your own company.

Nathan:

Yeah, for sure.

Stephanie Postles:

What’s one thing you don’t understand today that you wish you did?

Nathan:

Cryptocurrency. I get it, but I’m just curious of how it’s going to impact retail. I think just how that evolves and what happens there, and if that’s the next big wave of something that really has a huge impact on retail. It’ll be interesting to see that, and it’s something that I need to keep my finger on the pulse to see what’s going on with it, because it is so abstract to me.

Stephanie Postles:

Yep. Yeah. That’s a good one. And the last one, what one thing will have the biggest impact on ecommerce in the next year?

Nathan:

I think probably shipping and logistics. I think just the cost of it and the complexity of it, and just how that’s evolving. I think what you’re seeing with Amazon taking on more of their shipping and logistics and continuing to build out warehouse centers. I know Walmart, I think has the patent on a floating blimp distribution center where the drones are flying out of it. I think just what happens in that in the next couple of years is going to have a huge impact on pricing, and profitability, and what consumers are expecting. I think that’s going to be the biggest thing this year and probably in the next five years too.

Stephanie Postles:

All right, Nathan. Well, this has been such a fun chat. Where can people find out more about you and Sherper’s?

Nathan:

Yeah. So sherpers.com. We also have a sister site that’s called mkeblades.com. It’s where we have all of our knives. That was something that I learned when it came to the store. There’s a lot of knife collectors out there, so we have our outdoor hunting knives you would use, but just as people collect coins or cars or anything like that, they love knives as well, so we’ve got that side as well. And then otherwise we’ve got three brick and mortar store locations in a triangle around Milwaukee. So if you’re ever in the Milwaukee area, absolutely look us up.

Stephanie Postles:

Cool. I want to come. That sounds fun. Thanks so much for joining us.

Nathan:

Thank you.

Episode 108