March 31, 2017
From the Counter: Thriving in the Post-Election Retail Year – Part IV
Two months into the Trump Administration, the shooting sports industry’s sales dynamic continues to evolve. Some firearms dealers are experiencing a new retailing curve that’s remarkably different than previous years, and many stores are searching for new marketing stratagems to maintain a consistent bottom line.
This column is the fourth of the four-part series “From the Counter,” providing a perspective from shooting sports dealers offering strategies and adjustments to compete successfully in a new environment.
Ax Tactical, Yorkville, New York
Located in central upstate New York, this retailer/manufacturer is now in its fifth year of business. The company was founded by a small group of former Northrop Grumman managers and two competitive shooting enthusiasts who were searching for manufacturing businesses that would support their interest in government contract work and expand their passion for MSRs and competition shooting.
The alliance started the business in fall of 2012. By December of that year, MSR parts of any configuration had limited availability, and prices were rising drastically. Two of the company’s four partners went to Vegas for the 2013 SHOT Show. With purchase orders in hand, their intent was to start production of their new contract business rifles.
“Scott Ciufo and I were having dinner when we found out that New York State had just passed the Safe Act of 2013. We looked at each other and asked, ‘What do we do now?’ On the floor of the show the next day, I was told by all MSR parts and rifle vendors they could not sell us any product until the law was clarified in greater detail,” explained Paul Fostini.
Seizing Opportunity — Time to Pivot and Change Focus
While it was clear to the new business partners that the custom manufacturing side would have to change drastically in the face of legal limbo, the partners agreed to pursue the opening of the retail store, Ax Tactical.
“Originally we had no interest in opening a storefront. Yet despite the new legislation, there seemed to be a unique opportunity. Clearly our plans had to modify, but we were committed to succeed,” said Fostini.
This retail concept was fostered as one of the busier gun shops in town was closing its doors. To manifest their new brick-and-mortar, the partners chose to pivot. They changed their focus quickly to seize the opportunity to sell a state-compliant product, with a particular emphasis on handguns. Meanwhile, the manufacturing side of the company remained on hold waiting for the state to clarify what MSR parts and SKUs would eventually be legal.
Opening the Law Enforcement Door — Serving the Men and Women in Blue
Several weeks after New York’s Safe Act legislation was passed, clarifications were made for the law enforcement segment of the law. This provided the impetus for Ax Tactical to build and supply MSRs for municipal and government contracts. While supplying law enforcement had always been part of the company’s initial strategy, the legal clarification of the Safe Act cleared the road to truly serve this specific segment, and it presented the incentive to embark and maintain momentum on the company’s first large MSR opportunity.
“We learned that all of our local police departments contracted with out-of-state manufacturers like Colt’s. When repairs and maintenance were required, the clients had to ship or transport the guns back to the factory. We seized on this opportunity by creating a local maintenance program for our first branded rifles. In response, we received several quick contracts that gave us the opportunity we were looking for,” said Fostini.
Listening to Customers — From the Counter to the Design Table
The new retail storefront created a distinct space to establish a rapport with possible contract customers. The across-the-counter intel the team gathered provided exceptional insight. They listened to their potential customers’ needs and gained an understanding of what it would take to for customers to purchase Ax Tactical-branded MSRs, then took the insights garnered from these interactions to the design table.
Identifying a Committed and Welcoming Staff — Tackling Social Media
Ax Tactical’s paramount priority is customer service. The store prides itself on employing veterans, firefighters and police officers. The bottom line with their staff is, “They all must love to shoot and have engaging personalities. We look for employees who love to come to work. If the counterperson is genuinely friendly and knowledgeable, you will have a customer who simply loves to be in your store,” said Fostini.
While social media still poses a daunting task for some retailers today, this shop feels it’s a necessary part of the retail environment. The store has a social media point person who is committed to daily posts, and all promotions, sales, and events are marketed aggressively on social media.
Fostini pointed to a single custom MSR donated for a Boy Scouts fundraiser that expanded awareness of the store beyond expectations. The company built a Cerakoted MSR that has been shared statewide with more 55,000 Facebook users. This has brought notable new traffic and MSR orders into the store.
Lessons from the Counter
Several valuable lessons were learned across this retailer’s counter. First, to find your retail niche, maintain a flexible stance. By identifying the hurdles its customers faced and creating a local maintenance program to serve their needs, this retailer created a loyal customer base.
Fostini stated that although the challenges that sent him and his partners down the retail path were less than ideal, the experience has been invaluable.
“We love our customers. Every day they teach us how to be of better service to them, and in turn, what will sell. If you treat them like they’re the most important part of your business, you will be rewarded with a loyal consumer who will be thrilled to walk through your door. We don’t take our customers for granted. With the challenges they’ve faced from our state lawmakers, our customers appreciate our store trying to serve their needs,” Fostini said.
Second, remain nimble. Write your strategic plan and then be willing to flex and adapt to a dynamic environment to include retail or manufacturing to diversify your income streams.
With the popularity and extensive parts platform of the traditional MSR rifle, this company has discovered that experimenting with format manufacturing can be a strong ally to diversifying income streams at the retail level. Although this group came to retail from the manufacturing side, many retailers are discovering that investing in licensing to build custom compliant MSRs in small volumes can expand their customer base, increase profits and offer a better selection of product when in some cases there are few.
Finally, be acutely aware of the changing social and political environment so your retail team can adapt and thrive to remain legally on-point in your state. While political and social change can exacerbate challenging retail adaptation, it is clear that through creative planning and the willingness to change, firearms dealers can maintain and sustain positive outcomes.
Although New York State still has not overcome its final legal impasse, other retailers, particularly those in California, face similar issues resulting from localized or state legislation. It is important to understand your retail business’ rights while precisely acting within the letter of the law.