How Timberland Used Customer Data to Reboot Its BrandJanuary 2, 2015
The Washington Post | January 2, 2015 – There are few shoes more recognizable than the Timberland yellow boot. You know the one: The high-top styling, the sturdy-looking nubuck leather, the rubber lug sole to protect feet from sheets of rain or piles of snow.
But the durable boot — and the rest of Timberland’s footwear and apparel line — was having trouble weathering a fast-changing retail climate.
Timberland’s revenue was basically flat from 2006 to 2012. It was losing market share in the Americas, its home turf and most crucial market. And it was barreling forward with a confusing and slapdash patchwork of marketing and product strategies.
Here in the United States, it had become something of a hip-hop brand as rappers name-checked “Timbs” in countless songs. In Asia, it was thought of as a comfort brand; in Italy, it was more fashion-oriented. Still more customers perceived Timberland as gear for the rugged outdoorsman, the kind of guy who hikes in the woods for days with nothing but his backpack and his Eagle Scout skills.
“The brand had become stale in many ways, and the focus wasn’t there,” said Stewart Whitney, Timberland’s president.
In the past year, though, Timberland has staged an impressive turnaround, with sales surging 15 percent in the most recent quarter even as the broader retail industry has posted only modest growth. Its sales have improved in every global market and every product category, delivering a fatter profit margin — about 13 percent in 2014, up from 8 percent in 2011.
Timberland has revamped everything from its product design to marketing to merchandising strategies. And data science provided the fuel and the framework for each of its changes.
The company says that the cornerstone of the comeback has been a two-year customer study in which it collected data from 18,000 people across eight countries. In analyzing the trove of responses, Timberland was able to diagnose its problems and to zero in on its ideal customer — an urban dweller with a casual interest in the outdoors.
“Research wasn’t a driving factor as much in the previous 20 years,” said Jim Davey, vice president of global marketing. “It was kind of a product-driven organization.”
This data-driven approach was implemented after the family-run business was bought in 2011 by VF Corp., an $11 billion apparel company based in Greensboro, N.C., that has undertaken a similar analysis at other brands, including the North Face and Vans.
Timberland “could’ve followed the many brands that floundered in this changing retail environment, but if you look at all of their strategies holistically, they’re all developed with a steadfast focus on the consumer and innovation,” said Shilpa Rosenberry, senior director of consumer strategy and innovation at Daymon, a retail consultancy.
Timberland’s switch to a consumer-data-driven approach reflects a broader change in an industry where the power dynamics between retailer and customer have shifted to favor the shopper. Unprecedented access to pricing information and product reviews on the Web has made for smarter, more-informed buyers, and retailers are more focused than ever on catering to their high expectations. By letting consumers lead the way, Timberland has rebooted its brand.
The ‘outdoor lifestyler’
Timberland’s transformation is evident the moment you set foot in its small-town New Hampshire headquarters, thanks to a two-story-high art display in the lobby that shows off some of its print ads over the years. Early ones emphasize the brand’s commitment to performance, such as one that features a photo of a boot with the tagline, “Outdoors Proof.” Others highlight their commitment to eco-friendly materials and manufacturing processes (Another close-up shot of boots with the tagline, “While government leaders are debating climate change in Copenhagen, we’re actually doing something about it.”).
But beginning with the fall 2013 collection, you see a clear break: There’s a handsome guy with a 5 o’clock shadow looking pensive in a khaki field coat. Another shot features a woman in a leather bomber jacket curled up on the hood of a car, a city skyline — not the great outdoors — in the background.
The ads make clear that while performance and sustainability are still important, the brand is thinking first about style, a pivot that came as a result of studying shoppers.
Timberland enlisted an agency to survey thousands of customers and potential ones about their preferences. How much did they care about what other people thought of their look? How important was it to get a good price? How much were they into the outdoors?
Across all geographies, one customer stood out for being interested in their brand and open to its message: It’s a shopper they’ve dubbed the “outdoor lifestyler.”
“They’re definitely connected to the outdoors, but in a more casual, everyday way,” Davey said. “They care about the outdoors, but they also care about style. It was really important to them to look right for the occasion.”
The outdoor lifestyler, in other words, is a city dweller who goes for a casual afternoon hike or someone who leaves her house in the morning not knowing if she’s going to spend her afternoon at the park or at the movies. It’s someone who wants versatile clothes that blend in rather than stand out.
In pursuing the outdoor lifestyler, Timberland is able to surf other waves in the fashion marketplace. “Athleisure” styles that straddle the line between street clothes and workout gear are wildly popular right now, and Timberland is tapping a similar desire for clothes that offer flexibility and versatility. And with the emerging popularity in cities of offerings such as bike-sharing programs and farm-to-table restaurants, it seems plenty of city dwellers crave an urban life that remains connected to the outdoors.
“They’ve woven themselves right into this current zeitgeist, and that’s a really smart move,” said Joe Jackman, chief executive of Jackman Reinvents, a retail strategy consultancy.
Going after the lifestyler meant backing off on courting hard-core outdoor enthusiasts, who Timberland found would rather buy from its sister brand, North Face, or Patagonia, Columbia and Marmot.
“That kind of helped sift through the things that would not be relevant: Maybe we shouldn’t be doing highly technical ripstop nylon in apparel and really super-technical hikers in footwear,” said Lisa Demarkis, Timberland’s global vice president of product.
The women’s collection incorporated more fashion-focused high-heeled boots. After years of not using much of the color black — a staple of urbanite wardrobes — they are now incorporating it more. Timberland’s complete outfits (“toe-to-head” looks, as they’re known at the footwear-centric brand) showcase layering: Fitted vests, sharp blazers, stylish scarves and distinctive details such as a Harris tweed trim.
Timberland’s research also found that customers mostly thought of the brand when it was time to bundle up for winter, not year-round. That led to a focus on designing more “seasonless” pieces.
And they’ve realized they were jumping the gun with their cold-weather gear, rolling out ultra-warm boots and fur-lined coats in early fall when, in many markets, it was still T-shirt weather. They now have more transitional pieces to entice shoppers in those in-between months.
So far, the changes seem to be working — sales are up year-over-year in Timberland’s stand-alone stores, on its Web site and in its wholesale business.
Paying full price
Timberland’s makeover is coming at a time when consumers remain deeply price-sensitive and when many retailers are baiting them with a steady stream of eye-popping promotions.
Timberland has gone the other direction, cutting back drastically on promotional pricing. In 2013, only 36 percent of purchases on Timberland’s Web site were made at full price. By 2014, that figure was up to 88 percent.
Ryan Shadrin, vice president of retail and digital commerce for North America, said it was a scary decision to make but one that has ultimately helped profit margins.
At first, Shadrin said, “It’s almost like dead tide. There’s just a point of this eerie quiet where you’re like, ‘Where did everybody go?’ It’s because they’re sort of waiting,” he said, to pounce on a promotion.
Eventually though, shoppers came off the wall when they realized the old promotional cadence was not coming back.
All the changes at Timberland, Shadrin said, “lifted the brand to where we can command those higher prices. The consumer is willing to pay it.”
Right now, about 70 percent of Timberland’s direct-to-consumer business in North America is in outlet stores. By 2019, the company expects only 49 percent of that business will come from outlets as it increases its online sales and nearly triples its full-price store count.
But the lion’s share of Timberland’s revenue comes from its wholesale business, which sells merchandise to everyone from Nordstrom to REI to Zappos. That area, too, has seen serious overhaul. Diane Woods, vice president for North America, said that at one point she cut 70 percent of the SKUs, or individual items, in the women’s footwear business, a move that was a signal that the merchandise assortment had become bloated and unfocused.
They also realized they weren’t always offering the right products to the right kind of retailers. For partners it deeply valued, such as Macy’s and Nordstrom, it wasn’t providing enough exclusive items that shoppers were unlikely to find elsewhere.
And they heard from retailers that they were changing up the look and feel of the clothes too often.
“We were a brand that very much got on a subject and wanted to reinvent ourselves every season,” Woods said. “We were keeping retailers moving too fast for what was profitable and good for them.”
Timberland is now sticking with themes in its collections for three to six seasons, which it finds has been a boost for its retail partners and for its own bottom line.
Consistency across oceans
Timberland was for decades a family business, one whose story began in 1952 when Nathan Swartz bought half an interest in the Abington Shoe Company in Abington, Mass. A few years later, he bought the rest of the company and brought his sons in to help run what would be rebranded as Timberland in the 1970s. Timberland went public in 1987, though the family remained majority shareholders.
When VF acquired Timberland for $2 billion in 2011, then-chief executive Jeffrey Swartz stayed on to help with the transition but left the company his grandfather founded when the merger was completed.
“Our board concluded that the time is right because this serves our shareholder in a unique and special way, and today is a very magnificent day and a bittersweet day,” Swartz told investors in a conference call announcing the deal.
To show off the changes that were being implemented in the VF era, Timberland knew it was going to need a different kind of marketing campaign. In particular, a uniform approach, not the many-headed hydra of a strategy that had been in place for years.
Ads across the globe are now largely consistent — the same window displays, the same billboards. One prominent ad this fall featured a shaggy-haired guy leaning on a sun-drenched iron fence in a park. He’s sporting a blazer, untucked plaid shirt and black boots.