Look anywhere this winter and chances are you can find someone wearing goose jacka, parka, or vest. The Canadian-based clothing retailer has become so successful at marketing its puffy, doughboy jackets as elite winter wear that they’re one of the season’s most popular brands. The company’s parkas, identified by the round, two-inch patch in the left sleeve along with the coyote fur-trimmed hood, once warmed arctic explorers and Canadian Rangers, but today are typically spotted on celebrities like Emma Stone. More recently, like North Face fleece jackets and L.L. Bean bean boots, the white goose down-filled jackets have grown to be popular among college students.
What sets Canada Goose besides other outerwear companies are its exorbitant prices-$745 for the women’s coat, $245 for the hat at Bloomingdales. Prices could go up to $1,700.
But those steep prices haven’t hurt business somewhat. Fortune magazine reports that over the last decade, Canada Goose has seen revenues explode from $5 million to over $200 million, with a few experts predicting that figure could rise to $300 million in the end of this year.
Component of Canada Goose’s success can be related to playing up its humble founding five decades ago in a tiny warehouse in Toronto (the outerwear remains manufactured in Canada). And once private equity firm Bain Capital acquired a majority stake within the company in 2013 to get a rumored $250 million, it was required to promise to maintain the manufacturing there.
Canada Goose is really a marketer’s dream, says Susan Fournier, School of Management Questrom Professor in Management and faculty director of your MBA Program. Fournier invented a subfield of advertising on brand relationships and researches how companies create value through their branding.
BU Today spoke with Fournier about Canada Goose’s ultrasuccessful brand and the ways it offers formed relationships using its customers.
BU Today: The reason why Canada Goose this sort of popular brand right now?
Fournier: I don’t have their marketing plan facing me. All I am aware is the fact their marketing arises from grassroots. That they had a robust narrative, then it started getting found by certain groups. People started to contemplate hardcore Canadians braving the cold, so it was a fad and after that transitioned from the fad right into a strong brand. I think it’s mostly concerning this and keeping prices high, not going crazy with sublines like making lighter fall jackets, for instance. Also protecting distribution so that they don’t turn up for much less store like TJ Maxx or perhaps an outlet. It’s that, being smart enough never to kill it.
So you’re saying that some brands damage whatever they have by expanding too fast?
I believe that’s the situation with plenty of things. Burberry comes back now in popularity, but they were in peril for some time, and the same was true with Calvin Klein. They made their brands too available. If you’re gonna be exclusive, availability-both distribution and pricing-may be the complete opposite of that, so you need to balance that tension really carefully.
Inside a marketing strategy, you have the four Ps: product, place, price, and promotion. The pricing as well as the distribution are the main to get a brand similar to this. It’s growing, everyone wants it, so it’s difficult to say, “Well, we’re not intending to make it available for everyone,” as you always wish to serve shareholders and make the largest profit.
Is price the main barrier for accessibility?
I think distribution, too. Barriers to accessibility would additionally be, “Can you get your hands on it?” You must work a little bit harder to locate it. This brand has exclusive distribution; it’s not everywhere. Those are two barriers.
There’s a lot of hardy outerwear out there-L.L. Bean, North Face, Patagonia. How have those brands convinced individuals who winter gear is fashionable and even a luxury item?
That’s interesting too. The North Face has exploded hundreds and hundreds of percent over the last few years, and they also could risk blowing the whole thing up. But everyone is still inside their ultra down coats, so that they are still hanging within. But they’re form of in that close edge.
Eventually, many of these brands were only seen in small communities, like L.L. Bean used to be for fishermen and hikers, but they broadened. I think that’s step one; you start out to shift the category frame that you think of this as. It’s easy-core expedition wear, it’s about outer fashion. Outerwear remains outerwear, however you don’t need to go on an arctic expedition anymore.
The first task is transitioning the manufacturer to fashion. Remember Swatch? The innovation in Swatch was that watches was once about timekeeping, and then they managed to make it about fashion. They told customers that in case they got a new Swatch watch, it was actually like that they had 10 watches due to the interchangeable bands. Same thing with eyeglasses. You used to have one pair, now people often times have several with different designs.
Then it’s a part of a trend that men and women are prepared to pay more for. People are paying more forever quality things generally. Look at the iPhone as a great example. Who in their right mind goosejacka to invest $800 on a phone? But we’re succeeding enough for an economy, and it’s become easier for a number of people.
What about the backstory for brands like Canada Goose? Would it be important to make a narrative around a brand name to achieve success?
In these narratives you sense like you can know the founder being a person. They’re adventure seekers. It’s the same with Patagonia and L.L. Bean. I believe that’s a huge factor. Maybe more in contemporary consumption, much more so previously 10 or two decades, this idea of your narrative is crucial. There are plenty of brands out there that in case you don’t possess a story, along with a character in your story, you’re behind. As in your English classes, you need a character and a plot to create a good story.
Using a story differentiates you and gives your brand authenticity, that is critical for brands today. Harley Davidson is a good example-they have got this founder myth. The founders of Snapple were hugely vital for getting Snapple above the ground; these people were window washers. In the event you dig into several of your top brands, they all have these mythologies. And so they have some credentials when it comes to authenticity.
Canada Goose doesn’t do lots of advertising; it relies instead on product placement in movies and word-of-mouth. What’s so effective with that kind of advertising?
That’s sort of a few things i was returning to. The beauty the following is they don’t use a marketing strategy using a capital M, meaning traditional stuff. Instead, they’re doing cultural branding. Cultural branding means you would like your brand to naturally become section of the culture-put simply, placing the merchandise in to the audience the place you would like it to gain traction.
The process is you make an effort to get individuals to take advantage of the product and talk about it because of their friends. That’s not in the hands of the marketing team; that’s in the hands of the consumers. It’s much more powerful and credible, much more approachable. You want to become part of culture. Whenever you become element of culture, then you can find into a movie by using a scene where characters are in a really cold climate. Hollywood wants brands that are hot simply because they convey plenty of meaning, and it also keeps going. Individuals who are fashion bloggers want the company because it’s something which keeps going. It provides authenticity; it’s not likely to seem commercial, and it’s not pushing an item.
Why has Canada Goose made a decision to focus on the college market?
I don’t know the response to that without seeing their marketing plan. I was able to see teenagers as a target; I don’t determine if it’s just college. However you figure college students might are able to afford these items, and that it’s an effective target audience, one that’s hip. They’re not targeting youngsters.
A BU student developed a parody patch and raised cash on Kickstarter to produce the patches. Does Canada Goose benefit from parodies like this?
It all depends on the parody, but 80 % of parodies are type of good. If they’re selecting your main message, and discrediting you, that’s probably a bad idea. For instance, Matthew McConaughey did some Lincoln car spots, and people made parodies that hit a tad too near to home.
But go ahead and take case of Snuggie. Those blankets were for sale on infomercials, then a parody world got ahold of which, and plenty of parody commercials got loaded onto YouTube and that’s when that brand went nuts. A brandname wants men and women to accept them as an element of today’s cultural fabric.
Every brand wants to have the product that everybody wants, so the challenge would be to keep it cool. The exam for Canada Goose will probably be coming, and let’s see when they can ride this wave and not kill it.