Look anywhere this winter and chances are you can find someone wearing canada jacka, parka, or vest. The Canadian-based clothing retailer has been so successful at marketing its puffy, doughboy jackets as elite winter wear that they’re one of many season’s most popular brands. The company’s parkas, recognized by the round, two-inch patch around the left sleeve and the coyote fur-trimmed hood, once warmed arctic explorers and Canadian Rangers, but today are commonly 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 are becoming popular among students.
What sets Canada Goose apart from other outerwear companies are its exorbitant prices-$745 to get a women’s coat, $245 for a hat at Bloomingdales. Prices can go as much as $1,700.
But those steep price tags haven’t hurt business somewhat. Fortune magazine reports that during the last decade, Canada Goose has seen revenues explode from $5 million to a lot more than $200 million, with a bit of experts predicting that figure could rise to $300 million at the end of the year.
Part 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 is still produced in Canada). And when private equity firm Bain Capital acquired a majority stake in the company in 2013 for the rumored $250 million, it had to promise to hold the manufacturing there.
Canada Goose is a marketer’s dream, says Susan Fournier, School of Management Questrom Professor in Management and faculty director of the MBA Program. Fournier invented a subfield of marketing 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 provides 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 own marketing plan in front of me. All I understand is the fact their marketing originates from grassroots. That they had a powerful narrative, after which it started getting acquired by certain groups. People started to take into account hardcore Canadians braving the cold, and so it was a fad then transitioned from a fad in a strong brand. I do believe it’s mostly about this and keeping prices high, not losing their mind with sublines like making lighter fall jackets, as an example. Also protecting distribution so that they don’t arrive for much less store like TJ Maxx or perhaps an outlet. It’s that, being smart enough not to kill it.
So you’re stating that some brands damage what they have by expanding too quickly?
I do believe that’s the case with a lot of things. Burberry has come 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 going to be exclusive, availability-both distribution and pricing-is definitely the opposite of that, so you have to balance that tension really carefully.
Within a marketing plan, you have the four Ps: product, place, price, and promotion. The pricing and the distribution are the most crucial for any brand like this. It’s growing, everyone would like it, so it’s challenging to say, “Well, we’re not intending to make it designed for everyone,” because you always would like to serve shareholders making the greatest profit.
Is price the main barrier for accessibility?
I feel distribution, too. Barriers to accessibility would additionally be, “Can you grab it?” You need to work just a little harder to locate it. This brand has exclusive distribution; it’s not everywhere. Those are two barriers.
There’s lots of hardy outerwear on the market-L.L. Bean, North Face, Patagonia. How have those brands convinced individuals who winter gear is fashionable or even a luxury item?
That’s interesting too. The North Face has expanded hundreds and countless percent over the last few years, and they also could risk blowing everything up. But everyone is still within their ultra down coats, hence they will still be hanging within. But they’re type of at that close edge.
At some time, many of these brands were only found in small communities, like L.L. Bean used to be for fishermen and hikers, however they broadened. I feel that’s the first step; 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 to be outerwear, nevertheless, you don’t have to go upon an arctic expedition anymore.
The first step is transitioning the brand to fashion. Remember Swatch? The innovation in Swatch was that watches had been about timekeeping, and they caused it to be about fashion. They told customers that when they bought a Swatch watch, it was actually actually like that they had 10 watches due to interchangeable bands. Exact same thing with eyeglasses. You once had one pair, and from now on people often times have several with some other designs.
Then it’s part of a trend that folks are willing to pay more for. People are paying more forever quality things generally speaking. Look at the iPhone being a great example. Who within their right mind goosejacka to spend $800 with a phone? But we’re succeeding enough as an economy, and it’s become easier for a number of people.
Have you considered the backstory for brands like Canada Goose? Could it be important to make a narrative around a product to reach your goals?
In these narratives you sense like you can are aware of the founder like a person. They’re adventure seekers. It’s the exact same thing with Patagonia and L.L. Bean. I do believe that’s a tremendous factor. Maybe more in contemporary consumption, more so before 10 or 2 decades, this idea of your narrative is vital. There are so many brands available that if you don’t use a story, as well as a character within your story, you’re behind. As with your English classes, you want a character along with a plot to make a good story.
Developing a story differentiates you and gives your brand authenticity, which happens to be critical for brands today. Harley Davidson is a superb example-they have got this founder myth. The founders of Snapple were hugely vital for getting Snapple up and running; these people were window washers. Should you dig into several of your top brands, each one has these mythologies. Plus they get some credentials with regards to authenticity.
Canada Goose doesn’t do a lot of advertising; it relies instead on product placement in movies and word-of-mouth. What’s so effective about that type of advertising?
That’s sort of things i was getting back to. The sweetness here is they don’t have a marketing strategy by using a capital M, meaning traditional stuff. Instead, they’re doing cultural branding. Cultural branding means you desire your brand to naturally become section of the culture-put simply, placing the items in the audience that you want it to gain traction.
The process is basically that you try and get men and women to utilize the product and focus on it with their friends. That’s not in the hands of the marketing team; that’s at the disposal of the consumers. It’s far more powerful and credible, far more approachable. You want to become component of culture. If you become a part of culture, then you might get right into a movie having a scene where the characters are in a very cold climate. Hollywood wants brands which are hot since they convey lots of meaning, and it also keeps going. Individuals who are fashion bloggers want the emblem because it’s a thing that keeps going. It offers authenticity; it’s not planning to seem commercial, and it’s not pushing a product or service.
Why has Canada Goose made a decision to target the college market?
I don’t know the solution to that without seeing their marketing plan. I could possibly see young adults being a target; I don’t know if it’s just college. But you figure college students might are able to afford these matters, which it’s a great audience, one that’s hip. They’re not targeting youngsters.
A BU student developed a parody patch and raised money on Kickstarter to manufacture the patches. Does Canada Goose reap the benefits of parodies like this?
This will depend on the parody, but 80 % of parodies are form of good. If they’re choosing your main message, and discrediting you, that’s probably a bad idea. For example, Matthew McConaughey did some Lincoln car spots, and individuals made parodies that hit a touch too close to home.
But go ahead and take case of Snuggie. Those blankets were for sale on infomercials, then the parody world got ahold of those, and a great deal of parody commercials got loaded onto YouTube and that’s when that brand went nuts. A brand wants customers to accept them as part of today’s cultural fabric.
Every brand desires to have this device which everybody wants, so the challenge would be to ensure that it stays cool. The exam for Canada Goose will likely be springing up, and let’s see if they can ride this wave instead of kill it.