Online or 3rd Party Wholesale Brands Expand IRL (In Real Life)
After noticing a brand we’ve worked with opening its first retail stores in 2023 (from starting online and in catalogs), we became curious about other brand strategy examples that are expanding into retail in 2023 and 2024, starting from an online or third-party wholesale heritage.
Looking through Chain Store Age and other sources, it turns out there are many instances. From these options, we selected eight brand strategy examples.
We excluded large national retailers who are expanding and brands that have only popup stores. We included Bonobos, even though is isn’t currently expanding in stores, as a comparison point for a brand that grew with retail stores from its online starting point.
The brand strategy examples we focused on are:
For an overview of each brand, we examine when and how they started (i.e., online, wholesale, catalog) as well as when and where they opened their first store.
The year the brand was started ranged from 1957 to 2011, with the brands who started since 2004 typically launching either online DTC (direct-to-consumer) or wholesale. The oldest brands (i.e., Garnet Hill and Canada Goose) launched with catalogs or wholesale, given that online did not exist in 1976 or 1957.
The range of years from founding to store opening is five to 59. The average is 12 years from founding to first store opening, excluding the outlier of 59 years.
To get a sense of the recent business performance, we reviewed their total revenues (using estimates when revenues are not publicly shared), as well as the brand’s ownership status, e.g., private or public. The revenue range for these brand strategy examples is $66 million to $1.6 billion. Three are public, three are owned by larger companies, and two are private.
While the numbers change frequently, we captured the number of stores currently open and the range of square foot or size of the stores. From this information, experts may be able to estimate the revenues from the stores, given the store’s category, price points and maturity. We spoke with a retail expert with a background in jewelry to develop one of the estimates.
The number of stores these brands currently have open ranges from one to sixty-five. Of these, three have a small number of stores with six or fewer (i.e., Babylist, Beyond Yoga and Garnet Hill), and the rest have 19 or more stores. Similarly, there is a big range in store size, from 1,000 square feet to 22,000 square feet, as might be expected given their different retail categories. In some cases, the very large stores are flagships that are larger than the normal store footprint for that brand strategy example.
Beyond overall business metrics for each brand example, we consider:
- the brand’s target customer
- brand pillars and commitments
- brand strategy elements from the store(s)
- the brand’s strategy future.
In many cases, these brands are niche, and the brand positioning and strength of the brand’s appeal to its consumers is critical to the expansion and growth.
Let’s dive into the individual brand strategy examples, in alphabetical order.
Babylist Brand Strategy Example:
From Digital to Flagship Store
Founded online in 2011 by Natalie Gordon, Babylist provides an online registry and marketplace for first time parents, and their supporters (who purchase for them from the registry). The brand is “the leading vertical marketplace and commerce destination for baby” and more than half of first-time parents have a registry on the site.
Babylist had demonstrated strong revenue growth, with 2023 sales of $400 million, up from $290 million in 2022 and $130 million in 2020. To support growth, Babylist raised $50 million and made acquisitions, e.g., Expectful and SourceMD. Babylist is privately owned and venture capital backed.
The Babylist brand moved into “bricks” in August 2023, with the opening of its 18,000-square-foot Beverly Hills flagship showroom store. This movement into retail bricks is 12 years after the brand started. While the company currently has just this one store, there is the possibility of more stores in the future, along with several other stated future growth initiatives, expanding with its target customer.
“While we don’t currently have plans to open more locations, we may open more based on what we learn from this location”.
– Natalie Gordon, CEO and founder of Babylist
“Brands understand that consumers wouldn’t visit 15 different baby boutiques to learn about their products. They also don’t want to incur the expense of concepting and building out their own spaces, much less signing a long-term lease.”
– Lee Anne Grant, Babylist Chief Growth Officer
Target Customer for Babylist
Babylist’s primary target customer is first-time expecting parents who invest:
“40 hours researching products to add to their registry and add on average 100 products to their registry.”
Of course, experienced parents may also register on Babylist, but the bulls-eye target is the first-time parent. Experienced parents are secondary targets for many baby brands.
As my co-author, Teri Lucie Thompson, and I wrote about in Tuning into Mom: Understanding America’s Most Powerful Consumer, the age of the oldest child (the first-time mom) is the initial focus for parent’s brand decision-making in many categories.
A secondary customer for Babylist is the gift giver and supporter of the expecting parents.
With the January 2023 acquisition of separately-branded Expectful, “a meditation and content hub focused on improving mental (health) around fertility, pregnancy and postpartum,” Babylist expands its brand vision to “help people navigate everything from eco-friendly diapers to mental wellness around fertility.” The primary target is still expecting parents.
Brand Strategy Pillars / Commitments for Babylist
Babylist stated mission:
“At Babylist, we help expecting parents get exactly what they need for their new baby. Our mission is to build happier and healthier families.”
The origin story of Babylist comes from founder Natalie Gordon’s own frustrations as a first-time expecting mom who also is a former Amazon software engineer who expected “ease and simplicity” but found “the opposite” when she was ready to create a registry.
Brand pillar commitments that Babylist stands behind are:
- “get unbiased information,”
- “find and register for what you need” (with ease and simplicity) and
- “get support” (from community).
Brand Strategy Elements for Babylist Store
The flagship store in Beverly Hills offers several elements that are consistent with and build on the brand’s core pillars.
Featured are: “celebration” with an upbeat environment with shareable photo ops, “community” with local meetups and registry parties, and “curiosity” with the ability to try out strollers on different surfaces for simulated real life experiences.
Brand Strategy Future for Babylist
As noted above, the Babylist leadership team allows for the possibility of additional Babylist stores but is currently in a test and learn phase. As a point of comparison, the Beverly Hills Babylist flagship store (18,000 square feet) is nearly two times the size of the new Babies R Us flagship of 10,000 square feet.
We’ve also seen the Babylist brand make acquisitions and may continue to expect to see more.
The company has also selectively offered its own products to its current customers, such as Bottle Box.
For instance, an additional growth area on the radar screen is to offer products for parents of older children, such as tweens and teens. Since the first-time parents’ market requires constant refreshment and is dependent on the number of children born each year, any successful efforts to “up age” allow the brand to tap into a larger available market. This type of up-age expansion, however, has proven very challenging for other brands we’ve worked with, and the brand name “Babylist” appears limiting for up-age expansion.
Beyond Yoga Brand Strategy Example:
From Online and Wholesale to Stores
Beyond Yoga was founded in 2005 and launched in 2006 by Jodi Guber Brufsky and Michelle Whaler. The inspiration for the brand came from Brufsky’s lifestyle requirements as a yoga teacher and life coach as well her struggles with self-acceptance. Brufsky explains,
“Growing up in Hollywood with a high-powered entertainment mogul father was no easy feat. With my body ranging from a size 8-14, upon reflection, it was a gift that I wasn’t aware of at the time. Today, because of my past, I have a deep passion for encouraging self-esteem in young girls and women and encouraging them to celebrate who they are and not what they look like—no longer suggesting ‘fitting in’ (pun intended) but being your authentic self and landing right where you belong. This is what Beyond Yoga is all about and it would not have come to be had I not walked the path that I did.”
Fiscal 2023 sales for Beyond Yoga were over $115 million, an increase of 19% compared with the prior year. Beyond Yoga was acquired by Levi Strauss & Co. in August 2021 for $400 million. In 2021, 77% of Beyond Yoga’s business was digital, with approximately 50%+ from beyondyoga.com, and the remaining 50% from wholesale, split into 20%+ online and 30% from third-party physical stores.
Expanding Beyond Yoga’s distribution to more Beyond Yoga brick-and-mortar stores is an important growth focus.
“When Beyond Yoga® initially joined LS&Co., the team was excited about how the partnership could both raise brand awareness and enter the brick-and-mortar space, opening physical storefronts where consumers could touch, feel and experience the brand.”
Beyond Yoga opened its first bricks-and-mortar store in 2022 in Santa Monica, 17 years after the brand was started. Since then, more stores have opened with Beyond Yoga finishing 2023 with six stores, five in Southern California and one in Chicago. Store sizes range from 1,500 square feet to the Santa Monica signature location’s 4,000 square feet.
Another part of Beyond Yoga’s bricks-and-mortar expansion is a partnership with Follett Higher Education, reaching over 76 college campuses in 2023.
Target Customer for Beyond Yoga
Beyond Yoga’s target customer is a 25- to 44-year-old woman, who regularly wears athleisure clothing for lifestyle reasons and/or has a personal preference to wear athleisure throughout the day.
Michelle Whaler explains that the brand is not about focusing on being an athlete.
“Brand whose goal was female empowerment based on Body Positivity and self-love. We wanted to use this platform to let women know that they are perfect exactly as they are, regardless of size…So, if you want to work out in our product, wear it to a mimosa brunch with girlfriends or even curl up on the sofa to eat Nutella and watch Netflix, we support that!”
For many of its products, Beyond Yoga offers 1X to 4X extended size range in addition to XS-XL.
Brand Strategy Pillars / Commitments for Beyond Yoga
The Beyond Yoga brand has clear brand pillars. These are:
- Body positivity and inclusivity, “Every body is beautiful and unique, and our bottoms collection is made keeping that in mind. Experience a fit that feels custom-made, gentle, non-restrictive, and celebrates you.”, unretouched model photos are used for the brand
- Comfort: buttery soft, with Spacedye fabric “Women’s yoga and workout apparel in fabrics so soft, you’ll want to wear them everywhere”
- Performance for yoga and everyday life “From the serene stretches of a yoga session to the hustle of daily life, our range has you covered”
- Sustainability
The founders:
“required that every item in the Beyond Yoga collection be super soft, have an interesting textural element and perform.”
Celebrity fans and other endorsers are also an important part of the appeal of the Beyond brand. Beyond Yoga is publicized as worn by Olivia Culpo, Chrissy Teigen, Jennifer Lopez and Olivia Wilde. The brand’s Beyond Journal has recent posts from super model Lily Aldridge and LA-based stylist and creative director Erin Walsh.
Brand Strategy Elements for Beyond Yoga Store
Beyond Yoga’s brand strategy elements include “partnerships,” “purposefully soft,” and “personalized service.”
Similar to Babylist’s retail store’s local events, part of Beyond Yoga’s retail store strategy is local community partnerships that support other local businesses:
“Partnering with other L.A. founded and female-founded businesses…local favorite Alfred coffee.”
There is a purposefully soft look in the retail stores with a neutral background to align with the brand’s strength in buttery soft fabric. This includes couches and chairs made from Beyond Yoga’s “signature Spacedye fabric.”
Personalized service with appointment is also part of Beyond Yoga’s retail store brand experience. Many of the brand strategy examples that we will review offer a similar benefit of personalized service with a prescheduled appointment.
“Customers can choose to schedule appointments via the brand’s website in order to have Beyond Yoga’s store team personalize a selection of products based on their preferences.”
Brand Strategy Future for Beyond Yoga
Beyond Yoga is expected to grow company-owned stores. Levi’s CEO Chip Bergh says retail store growth is an important growth driver for Beyond Yoga.
“Approximately 50% of their sales are from customers new to the brand, and we believe brick and mortar will be a powerful catalyst for the brand.”
Beyond Yoga also has “over 1,600 retail partners” outside of company-owned stores that give additional “bricks-and-mortar” coverage.
In terms of categories, Beyond Yoga has already expanded into maternity, dresses, men’s and children’s categories. The maternity line called Beyond the Bump in 2022 was “one of the brand’s fastest growing online categories.”
The brand has also called for continued DTC growth and international expansion.
The new CEO, Nancy Green, previously with Athleta and Old Navy, will likely bring some additional moves to Beyond Yoga’s growth playbook.
“As a purpose-driven leader, I’m inspired by the fact that Beyond Yoga stands for more than just comfort and performance; the brand has created an inclusive, body-positive community that celebrates diversity and giving back. I’m committed to staying true to these values as we continue to build this community and scale this brand for its next chapter of growth.”
Bonobos Brand Strategy Example:
From Digital to Guideshops
Like Beyond Yoga’s desire for more lifestyle-friendly yoga pants, the founding premise of Bonobos came from the founder’s desire for a better-fitting pair of pants for men.
The digitally-native Bonobos brand was launched in 2007 as Bonobos.com by Brian Spaly and Andy Dunn, two Stanford MB classmates. In the Bonobos brand strategy example, the brand was explicitly anti-bricks-and-mortar at founding, a perspective that changed in just five years.
“Their vision was simple: Sell men a better-fitting pair of pants, and do it without the ‘burden’ of physical stores.”
Bonobos moved into bricks-and-mortar in 2012, just five years after launching. The bricks-and-mortar locations are called Guideshops, and there are now 58 of them in 24 states. To be sure, these stores don’t allow the customer to walk out with the merchandise, instead the in-store order is fulfilled by shipping the merchandise to the customer.
The size of the Bonobos Guideshop ranges from 1,050 square feet for a Houston location opened in 2015, to a 1,500-square-foot Los Angeles location in 2016, to a NYC-area 4,000-square-foot location opened in 2015. A Tampa location opened in 2019 is 1,455 square feet.
The number of Bonobos Guideshop locations grew from 27 in 2016, however the brand expected to have 100 locations by 2020, and the total currently stands at 58, by our count on the website in March 2024.
There are documented synergies between the Guideshops and the native-digital online Bonobos brand.
“For direct-to-consumer retailers especially, showrooms such as Warby Parker’s stores and Bonobos’s Guideshops increase brand awareness and allow customers to inspect products or try them on before buying. They excel in serving first-time customers and those with more complex needs.”
While he was still a Wharton professor, I heard David Bell speak in Los Angeles and share insights from his research of the proven fact-based synergies between online and bricks-and-mortar in areas with sufficient density of the target customers to access the retail location. A 2018 MIT Sloan article coauthored by Bell explains:
“At Bonobos, we find that customers who are ‘born offline,’ meaning that they complete their first transaction at a physical location (one of the Bonobos Guide Shops) … account for a larger than proportional share of sales than the customers who are ‘born online.’ If we normalize the percentage of customers who are born offline to 20% (for ease of exposition and to maintain confidentiality), these customers account for 24% of the total sales, about 19% more volume than would be expected on a proportional basis.”
Bell’s 2014 book, Location is (Still) Everything: The Surprising Influence of the Real World on How We Search, Shop, and Sell in the Virtual One argued:
“the way we use the Internet is still largely shaped by the physical world we inhabit.”
A recent 2023 MIT Sloan article co-authored by Bell reminds:
“traditional retail through stores still accounts for more than 80% of sales in the U.S.”
In April 2023, the Bonobos brand and operating assets were acquired by WHP Global and Express, Inc. for a combined $75 million, down from the $310 million Walmart paid for the brand in 2017.
At $75 million, using a 0.8x revenue multiple, Bonobos revenues prior to the sale can be estimated at approximately $94 million. Separately, ECDB listed Bonobos revenues for 2023 at $185 million.
Whether it’s $94 million or $185 million for 2023 for Bonobos sales, limited growth is apparent in recent years as 2016 Bonobos sales were reported at $150 million and 2013 sales were $69 million. If each of the Guideshops had $500,000 in revenues in 2023, that suggests $29 million through the 58 Guideshops, with the remaining balance online and through other retailers like Nordstrom.
Target Customer for Bonobos
The Bonobos’ brand is inspired by:
“the bonobo ape species, a close genetic relative to humans that is best known for being promiscuous and peaceful.”
The Bonobos’ primary target customer is a working professional man, ages 18 to 40 who “wants to look sophisticated and professional.”
“Its $88 chinos and $98 plaid shirts, for example, are meant to appeal to consumers who are either affluent or in a mid-range income bracket. Its main audience is young, but it wants to be a brand both older fathers and their sons would want to wear.”
In 2022, Walmart also introduced a proprietary, lower-priced sub brand from Bonobos called Fielder, targeting secondary target Gen Z with a more affordable line:
“The line, which is described by Bonobos as ‘streetleisure,’ is outside the company’s usual offering of work and dressy-yet-casual clothing. Instead, the company is targeting a new generation of shopper with a more relaxed style and lower price point.”
The Fielder price point is dramatically below the traditional Bonobos, currently under $10 for many items like t-shirts, hoodies and shorts, and is targeting a different group. With the change in ownership, we expect to see the Fielder subline be discontinued, but time will tell.
Brand Strategy Pillars / Commitments for Bonobos
The starting premise of Bonobos is fit. The brand promises a great fit to complement your body.
“We pride ourselves on being pioneers of fit. Since no two men are exactly alike, we set out to give them a range of options. Choose from skinny, tailored, slim, straight, or athletic depending on your body or style.”
A second Bonobos brand pillar is personalized guidance, with on demand style advice as a brand pillar. For this, the brand offers guide chat.
Another Bonobos brand pillar is risk-free trial, with free shipping, exchanges, and returns on all orders in the U.S. The goal is to make the shopping experience as easy as possible.
One articulation of the Bonobos mission statement said:
“Shopping for clothes is a pain. We’re here to make it painless, and maybe even fun.”
Brand Strategy Elements for Bonobos Guideshop (Store)
Bonobos Guideshop builds on the guidance brand pillar by offering “Upscale service and appointment-shopping.”
In-person fitting is another brand element thatmeans that the customer knows if the product fits them.
A promotional Bonobos Guideshopvideo promises additional benefits, e.g.,
- “a really simple experience”
- “a guy can come in and get that one-on-one attention to know what fits”
- “an easy time to hang out, and they are getting something done”
- “you can place an order, and it comes next day, second day air”
- “one of the great things about coming to the guide shop is you now have your size, so the next time you can just log in and place an order”
It’s “a clothing store where customers “leave empty-handed.”
For one loyalty expert Andrew Davis, his Bonobos Guideshop experience did not live up to expectations, as he explains in three video segments. Davis clarifies upfront that he likes the brand’s products and had high expectations going in. In the first segment, Davis explains that after booking the Bonobos Guideshop appointment, he received just one simple confirmation email. The brand’s pre-meeting communication did not address his concern (i.e., would the time investment be worth it?), did not maximize the honeymoon phase, and did not scale camaraderie (i.e., to build trust and respect before the meeting occurs). In the second video, Davis asserts that the Guideshop in-store shopping experience is exactly like every other retail shopping experience, in that the retail staff did not deliver excellent service.
Davis’s experience points out the challenge of delivering exceptional service in-store that many brands face.
Brand Strategy Future for Bonobos
The Bonobos brand expanded in 2011 from pants to:
“shirts, suits, and blazers to best take advantage of a younger generation’s emphasis on clothes that weren’t boxy or baggy.”
Categories offered today at the Bonobos website are pants & jeans, shirts, sweaters, suits & blazers, outerwear, shorts & swim, golf and accessories. There appears to be limited potential for the Bonobos brand in expanding into new product categories.
With the recent change in ownership to WHP Global, one stated brand strategy future for Bonobos is increased international expansion of the retail Guideshops. WHP Global CEO Yehuda Shmidman says,
“How about a Bonobos in Dubai? How about a Bonobos in Hong Kong? How cool would that be?”
Moving into the future, it will be interesting to see if the Bonobos brand addresses the factors that have led to limited growth in recent years and expands to more international stores as WHP has suggested.
Brilliant Earth Brand Strategy Example:
From Digital to Showrooms
E-tailer Brilliant Earth launched its website in July 2006. Its origin story comes from Co-Founder and CEO Beth Gerstein’s inability to:
“find a diamond engagement ring that was ethical, sustainable, and traceable.”
Says Gerstein:
“We started Brilliant Earth in 2005 to raise the ethical standards of the diamond industry and to create a new way to buy beautiful fine jewelry.”
By 2012, Brilliant Earth had $25 million in sales, and in 2014, it was at $50 million.
In 2021, Brilliant Earth went public under the ticker symbol “BRLT” with an IPO.
2023 revenues for Brilliant Earth were $446.4 million with net profit of $4.7 million. For 2024, Brilliant Earth is projecting a two-to-five percent sales increase to between $455 million and $469 million.
San Francisco-headquartered Brilliant Earth opened its first showroom location in San Francisco in 2011, five years after launching.
Like several other brand strategy examples, an early expansion market choice for Brilliant Earth was Los Angeles in 2015, with a 1,000-square-foot showroom store. While showrooms are by appointment, “limited walk-ins” may be accommodated.
Brilliant Earth showroom store expansion continued in 2016 to Boston and Chicago, with 2017 openings in San Diego, Washington DC and Denver.
As of August 2023, there were 37 Brilliant Earth physical locations. Brilliant Earth states, “new showrooms open at least 1 year have paid back on average within 16 months” and that they exceeded their 2023 goal by opening 12 showrooms to the 37 total, with an average size of 3,223 square feet.
The more recent locations to open have a larger footprint, for instance 3,000 square feet for the Williamsburg showroom. These locations have customer lounges, and walk-ins are encouraged as well as dedicated appointment areas.
“Expanding on the success of our existing showrooms, we are strategically moving into spaces with higher foot traffic and larger consumer footprints. These new locations will allow us to showcase the brand to more customers, while continuing to meet their expectations for a seamless experience across digital and physical platforms.”
Unlike the Bonobos’ Guideshop brand strategy example, a Brilliant Earth in-store customer can both purchase and fulfill in store. In other words, customers can purchase “any of the rings or jewelry Brilliant Earth has in stock during the appointment and take it home with them.”
“The company’s physical locations operate with what it describes as an ‘inventory-light’ model, meaning they don’t stock a lot of merchandise, though they do offer non-bridal jewelry—earrings, pendants, and bracelets as well as fashion and cocktail rings—for immediate sale.”
Like Bonobos, Brilliant Earth finds that having showroom store locations in an area increases its online business, as covered in their 2021 IPO document.
“Expanding our number of showrooms has uplifted our e-commerce business, accelerated growth, increased average order value, and improved conversion in the showrooms’ metro regions. We have seen over 80% revenue growth on average over the first 12 months in metro areas where a new showroom has been opened.”
Of course, the dynamics and the exact numbers will have changed in recent years, just as the Brilliant Earth showroom strategy has changed to larger showroom footprints.
Part of the rationale for showroom expansion is as:
“a high-priced category, jewelry tends to be a purchase made with plenty of considerations including fit, comfort and appearance, which is better assessed in person than online.”
Target Customer for Brilliant Earth
The primary target is Gen Z and Millennial couples in the bridal market who are concerned with sustainability. Brilliant Earth is focused on Gen Z (born between 1997 and 2012) and Millennial (born between 1981 and 1996) customers. Brilliant Earth includes both members of the couple in its target. Psychographically, the brand’s target is those who care about the sustainable sourcing for jewelry.
Dubbing Brilliant Earth the “premier GenZ digital-first jeweler,” T.D. Cowen’s Oliver Chen said in 2022:
“We believe Brilliant Earth is well positioned for market share gains in a fragmented industry given strength in their branded mission. Brilliant’s marketing strategy focuses on word-of-mouth referrals and growing brand awareness among younger generations.”
More recently in January 2024, Chen rated Brilliant Earth a “hold” based on concerns about sustaining gross margins.
Brilliant Earth’s IPO document notes that 87% of their active customers are either Millennial or Gen Z.
“We are a mission-driven, premium brand founded on core values of transparency, sustainability, inclusivity and giving back. These values resonate strongly with Millennial and Gen Z customers, 83% of whom say they will buy from brands whose values align with theirs, according to the 5WPR Report. Those same Millennial and Gen Z consumers collectively represented 87% of our active customers according to our Customer Insight Survey. We thoughtfully develop our brand messaging and customer experience to appeal to all genders, which is important because couples are increasingly shopping together for engagement and wedding rings. 72% of Brilliant Earth couples in 2020 and 2021 were both involved in their engagement ring purchase according to our Customer Insight Survey.”
Since the point of entry for Brilliant Earth for many customers is an engagement ring, trends in engagements will impact the brand. Marriages were disrupted during COVID, but recently marriage rates returned to pre-pandemic levels of 2.1 million in 2022.
Average engagement age in the US is 23 to 27 in 2023, according to one source, with an average time dating before getting engaged of 13-18 months. The average length of engagement is 15 months in 2023, according to The Knot. For reference, the average age of first marriage for men is 30.6 and women is 28.6 (in 2022). As a trend, the average age of first marriage has increased over the years. Putting this together for Brilliant Earth’s target, the older cohort of Gen Z is now in the key engagement age ranges, while the older cohort of Millennials in their early 40’s is aging out, on average.
Secondary targets include women buying for themselves. Part of Brilliant Earth’s strategy is to cultivate an ongoing relationship and repeat purchases after the engagement, which allows it to retain the older Millennial customers, whether the couple or women only. The brand is also reaching new customers who are not bridal. In 2022, one-third of Brilliant Earth new customers bought non-bridal fine jewelry (meaning that two-thirds were bridal).
Brand Strategy Pillars / Commitments for Brilliant Earth
Brand Pillars for Brilliant Earth include:
- Sustainable, ethically sourced jewelry
- Designs that can be customized with a custom design process
- “Beyond Conflict Free” diamonds
- “a joyful, personalized, and meaningful jewelry shopping experience
Brilliant Earth’s mission pillars are prominently highlighted:
- “Transparency: We know where our precious metals and gemstones come from and how our jewelry is made. And we share that information with you — so you can feel good about the jewelry you’re wearing.
- Sustainability: We use recycled and sustainable materials, apply energy-efficient practices, and minimize our carbon footprint.
- Recycled Metals: Today, 96% of our gold and 97% of our silver is recycled. By 2025, 100% will be recycled or Fairmined.
- Zero Waste:No single-use plastics by 2025. Zero waste in showrooms and offices by 2030
- Compassion: We care about and are committed to our communities, our employees, and the people who help to bring our jewelry to life
- Inclusion: We support and invest in our diverse teams to ensure every employee knows that they belong, and our designs are always crafted with inclusivity in mind
- Circularity: Recycled materials. Timeless designs. Lifetime warranties. And trade-in programs that give your jewelry new life.”
Brand Strategy Elements for Brilliant Earth Showroom Stores
Similar to Bonobos, Brilliant Earth asks customers for many of its locations to make an online appointment before visiting, though the newer locations are more oriented to walk-ins.
Brilliant Earth says:
- “Schedule a personalized jewelry consultation at one of our stores to discover the perfect ethically sourced fine jewelry piece for your milestone moments.
- Appointments are relaxed, joyful, and tailored to you. Whether it’s a milestone moment or an everyday luxury, we’re here to help you start your stack, find your fit, and design the perfect piece.”
Newer, larger showroom locations offer a “bright and spacious” feel with customer lounges and areas for appointments.
Other benefits touted are 1-to-1 attention, guidance and education.
While most of these are antes I’d expect from any in-store fine jewelry shopping experience, they are of course, important to provide.
Brand Strategy Future for Brilliant Earth
In 2023, Brilliant Earth expanded the number of retail stores, so additional store openings are likely in the plans. Given recent reductions in gross margin, and slowing sales growth, however, this may prove challenging.
Still, Brilliant Earth is positioned to benefit from market trends toward lab grown diamonds and demi fine jewelry. These trends allow more customers to participate in fine jewelry with lower price points, and Brilliant Earth may appeal to these customers. Brilliant Earth CFO Jeff Kuo said:
“overall customer demand grew for jewelry priced below $10,000, but shrank for pieces above that price point.”
Category expansion beyond bridal continues to be a focus for Brilliant Earth with “cocktail rings, tennis bracelets, and other jewelry.”
Share prices for Brilliant Earth are down from $15.22 in September 2021 to $3.10 as of March 22, 2024.
A competing online-first retailer, Blue Nile, started selling diamonds online in 1999, and was bought by jewelry conglomerate Signet Group in 2017 for $360 million. Currently, Blue Nile has 23 store locations, less than Brilliant Earth’s 37. However, parent company Signet has over 2,700 North American locations.
Canada Goose Brand Strategy Example:
From Wholesale to DTC Stores
Now best known for its luxury, heavy-weight down parkas, the company that became Canada Goose was founded in 1957 in Toronto under a different name and with a different business model (i.e., the earlier versions of the company, Metro Sportswear and Snow Goose, focused on private label and wholesale.)
Over time, with new leaders from the family, the company steadily focused on building its DTC and the Canada Goose brand.
“After working at his family’s coat manufacturing company for a few years the author (Dani Reiss) realized that high-end coats made in Canada could become a luxury product globally. Targeting European consumers first, he introduced the brand and then marketed it in innovative ways, including outfitting polar explorers and TV and film crews who were shooting in remote cold-weather locations. Perhaps most important, he committed to domestic manufacturing and opened factories across Canada along with training centers for sewers. This paved the way for phenomenal growth and a successful IPO.”
Canada Goose opened its first store in 2016, in Toronto, 59 years after starting. The company went public in 2017.
For full year 2023, Canada Goose revenues were $1.22 billion, up 11% from the prior year. Most-recently-reported 3rd quarter fiscal 2024 results found DTC at 84% of revenue and wholesale at 16% of revenue.
In a recent investor webcast, CFO Jonathan Sinclair summarized Canada Goose’s brand move to DTC with 68 stores, currently ranging from 2,500 to 3,000 square feet. Of these, 65 are permanent stores.
“We started online back in 2014. After we learned on who we shipped to…cherry pick locations. Started with our first (store) in 2016. At the end of this fiscal, we are at 68 (stores)…Still see a ton of white space in this area…130 to 150 stores over time…Focused to improve performance of existing network in addition to expansion.”
Perhaps due to its Bain Capital ownership experience, Canada Goose hews close to its strategy in its 2024 investor communications, repeating three long-term strategies for growth. Of note, retail stores feature prominently in the second strategy:
- Consumer centered growth: “We have significant opportunity to grow lifetime value of our longstanding and new customers with a focus on women and Gen Z”
- DTC growth: “build out our direct presence in different geographies”
- Category growth: “products that appeal across a number of use cases”
These three strategies are documented in the updated strategic growth plan five-year financial outlook from Feb 2023.
Canada Goose targets margins of 70% on DTC, compared with 40%, as Sinclair explains.
“Our gross margin narrative has not really shifted over a number of years…take price in mid-single digits…Management job is keeping the margin static…mid 70s in DTC, mid to high 40s in wholesale, more or less that’s where we are today…We did (move into adjacent categories without diluting gross margin).”
DTC also helps Canada Goose in its ongoing battles with counterfeiting.
Canada Goose acquired Baffin in 2018, supporting expansion into footwear.
Target Customer for Canada Goose
The Canada Goose primary target is an affluent adult customer (both men and women) with an aspirational outdoor lifestyle (i.e., they may not spend much time outdoors, but they aspire to that lifestyle). With parka price points over $1,000, this brand is in the reach of higher income and net worth consumers.
Canada Goose dedicates efforts to grow with Gen Z (again, the affluent, outdoor-aspirational customer), claiming 25% of its online sales came from this cohort in 2022.
While it targets both men and women, in the US, Canada Goose has higher awareness among men than women in 2022, suggesting there is still room to build with women, who are the primary purchaser in many apparel categories.
Brand Strategy Pillars / Commitments for Canada Goose
The starting brand pillar and differentiating strength the Canada Goose brand was built on is its “Made in Canada” claim for the parkas, and Canada Goose makes all of its down-filled products in Canada. The basic notion, reinforced by marketing and PR, is that nobody knows how to make a garment for a cold climate like a Canadian company, as Canada is cold.
Heavy-weight down makes up 60% of Canada Goose revenues, down from 83% a few years ago. With the expansion to other categories, there are products made outside of North America and Canada, although: “more than 75% of the production is done in North America and above 85% for the core products.”
“Convert that into units and the majority of what we sell is not heavyweight down…Apparel is quite broad, all the way from fleece, knitwear and outerwear and all the way to sweats and t-s.…Increased confidence that the elasticity of the brand allows us to do adjacent categories so long as they contribute to the promise and DNA of the brand.”
Sinclair describes how the expanded vision:
“What defines Canada Goose is a performance lifestyle brand…it stands for protection from the elements…keeping you warm and keeping you dry…function first…”
“The DNA of the brand is keep me warm, keep me dry… We are probably most famous for heavyweight down… I joined a few years ago and that (heavyweight down) was 85% of the business (revenues)…and was 63% last year and the zip code of 60% last year…Convert that into units and the majority of what we sell is not heavyweight down…Apparel is quite broad, all the way from fleece, knitwear and outerwear and all the way to sweats and t-s.…Increased confidence that the elasticity of the brand allows us to do adjacent categories so long as they contribute to the promise and DNA of the brand.”
Aspirationally, the Canada Goose brand equips its customers to be ready for adventure, no matter the climate and offers its “sherpa for daily exposure.”
“The vision of Canada Goose brand is to equip people on explorations and adventures in any environment they choose to venture, including extremely inhospitable ones. Nowhere is too cold or too challenging when you are well equipped and comforted by a high-quality garment. As a clothing brand, it literally empowers the adventurous to mount the summit, sail to the unknown and charter the unchartered. The spirit of Canada Goose is always to celebrate the beauty of the wild and to push people out of their comfort zones.”
Summarizing, the Canada Goose brand pillars are:
- High-quality standards for craftsmanship and functionality
- Performance to keep people warm and dry
- Made in Canada (for down-filled products)
- Sustainability initiatives
- Premium priced luxury
Brand Strategy Elements for Canada Goose Stores
In 2023, Canada Goose reported that 70% of its revenue came from 55 company stores. Clearly, stores are a huge portion of the brand strategy.
Geographically, as a global brand, Canada Goose has customers worldwide, with 68 branded stores in Asia, Europe and North America.
Within Asia, China, Japan and Korea are the focus countries as Sinclair describes:
“To be successful in Asia, we have to get three countries right. China, Japan and Korea. Been in China since 2018, 22 stores, very productive, very pleased. Japan we are relatively new in joint venture, a couple of years in (6 stores). It’s all about partnership with department stores. 3 in Tokyo, 3 in other. In Korea, is an influencer of both of those geographies. China buying pop culture from Korea. Japanese men also taking their cue from Korean men. In Korea we have a distribution partner…sound footing to expand our strategy. Not a saturation story (in China).”
Canada Goose has 9 stores in Europe, with its European business is not as far along with DTC as Sinclair says:
“Funnily enough the brand began its international expansion in Europe. Adopted more of the wholesale characteristic. Have 9 stores in Europe, but earlier in journey to DTC. Focus in Europe now is on sales density story.”
The remaining 37 Canada Goose stores are in North America, including one here in sunny Los Angeles in Beverly Hills. On the Canada Goose retail store locator for my zip code, there are also many opportunities to buy Canada Goose at other retailers, such as Bloomingdales, Neiman Marcus, or Saks.
The stores target revenue target is north of $4,000/square foot according to Sinclair:
“Stores at $4,000 per square foot. In the full price business like we are and stores in the sweet spot of 2,500 to 3,000 square feet. There’s only so much staffing. You’ll get to a 40% margin. Regionally highest in Asia, then North America, then Europe. Our high-water mark is greater than $4000 per square foot.”
Despite these results, one analyst perceives that the Canada Goose store strategy has fundamental challenges, and the Canada Goose “retail model has a fundamental flaw in store utilization.”
Canada Goose store brand strategy elements include:
- Shopping, exchanges or returns by appointment or walk-in
- Range of product categories, to embody the lifestyle
- “creating owned channels will better facilitate category expansion. Canada Goose luggage doesn’t make sense when seated between Pelican and Rimowa. Where it does make sense is adjacent to boots, hats, gloves, scarves, and other accessories you would purchase to ensure your performance in inclement foreign climates.”
- A cold room or snow room at selected locations. For instance, Orange County’s South Coast Plaza store boasts the first-ever US snow room.
Brand Strategy Future for Canada Goose
Canada Goose can be expected to follow its long-term strategy, which calls for between 100 to 150 stores globally and further expansion of product categories.
The March 2024 layoff announcement of 17% of corporate headquarters’ employees coupled with the ongoing “Transformation Program” may cause the rate of store opening to slow.
Additional Canada Goose product categories will also be offered. Product categories may include eyewear, luggage, and home in addition to the already existing rainwear, apparel and footwear. The brand also offers vintage.
One of the goals of the category expansion is to reduce the brand’s considerable seasonality.
To balance seasonality, another approach could be the one taken by Quaker Oats for its then-dominant hot oatmeal business eaten in the winter. It purchased Gatorade in 1993, with its summer-oriented business. This would suggest Canada Goose could identify and acquire a “protection” oriented business for extreme hot climates.
Like Brilliant Earth, Canada Goose’s stock price is down considerably: 75% in the past five years from $48.82 on March 29, 2019 to $11.89 on March 22, 2024.
Garnet Hill Brand Strategy Example:
From Catalogs to Online to Two Stores
Garnet Hill was founded in 1976 as the “original natural fibers” catalog. While the brand today encompasses clothing, home décor and linen, the starting product was cotton flannel sheets.
Twenty-four years later, the website garnethill.com was launched, and by 2010 more than 80% of orders were placed online.
A Garnet Hill brand outlet store called “Firsts and Seconds” was opened in 2001, subsequently rebranded as The Garnet Hill Outlet Store and moved to Franconia, NC in 2017. Around the same time, in 2016, Garnet Hill opened a seasonal pop-up store in The Hamptons.
Garnet Hill was purchased by Cornerstone Brands in 1997.
Then in 2005, Cornerstone was purchased by The Home Shopping Network for $720 million. At that time, Cornerstone’s e-tailing and catalog brands were Frontgate, Smith & Noble, The Territory Ahead, TravelSmith, Ballard Designs and Garnet Hill.
In 2024, nearly 50 years after its founding, Garnet Hill, now owned by Qurate Retail Group, opened the first full-price retail store in Dedham, Massachusetts. The new 4,200 square-foot, full-price store joins the Garnet Hill Outlet Store in Franconia, NH bringing the total to two stores.
Estimates of Garnet Hill’s revenues vary widely. Garnet Hill’s 2023 eCommerce revenue was estimated at $199 million, down slightly from 2022. If eCommerce represents 90% of revenue, that implies Garnet Hill total revenues of $221 million for 2023. Another source estimates January 2024 online revenue at $12.9 million, which if annualized and not seasonal, implies sales of $155 million online or $172 million grossed up for non-online for 2023. Another source suggests much more modest revenues for Garnet Hill of $45 million.
For perspective, Qurate Retail Group reported $10.9 billion in revenue for 2023. Qurate Retail Group is a public company with negative stock price trends since June 2021. The Garnet Hill brand is a small part of Qurate’s large corporate portfolio.
Target Customer for Garnet Hill
The original primary target consumer for Garnet Hill was a woman who was interested in “natural” products, a “Natural Products Seeker.”
Appealing to this Natural Products Seeker, the original product is:
“Pure cotton Signature Flannel bedding is still crafted with old-world methods in family-owned mills in Germany and Portugal.”
In 2006, former Garnet Hill president Russ Gaitskill described the primary target evolved to an upscale female with discerning taste and a preference for quality.
Said Gaitskill:
“Our target customer is discerning…She cares about value, but she is not label-conscious or into high fashion. She wants a certain look.”
In terms of age, the suggested focus for Garnet Hill is adult women ages 30-54. This is a typical broad demographic target. Garnet Hill has also been identified as good for women ages 40+.
Based on the product price points today, the brand appeals to middle to upper income households.
Consistent with Garnet Hill’s target, parent company Qurate Retail Group sees its core customer target as:
“women aged 30 or older, engaged in their communities, and with significant discretionary time and income.”
Brand Strategy Pillars / Commitments for Garnet Hill
High-quality products made from natural fibers is a foundational brand pillar for Garnet Hill.
Garnet Hill is recognized for its “quiet good taste” and timeless design.
The Garnet Hill brand additionally has a brand pillar around responsible sourcing and sustainability.
The brand’s recent description in their press release for the new store summarizes these elements:
“For almost 50 years, Garnet Hill has been a destination for beautifully designed, responsibly sourced, and passionately crafted products.”
Another shorthand for the Garnet Hill brand is:
“Sourced from nature, with quality in every stitch, since 1976.”
Brand Strategy Elements for Garnet Hill Store
In keeping with the brand’s focus on natural fibers, the store features natural design elements, consistent with the brand’s heritage and a fresh and airy look.
Like other brand strategy example retailers, the Garnet Hill Dedham store offers personalization and customization with a:
“bedding design center where customers can coordinate and layer their favorite combinations of fabrics, colors and patterns, with the help of store design associates.”
Says Constance Hallquist, President of Garnet Hill:
“We’ve designed an experience for our brand, with a gorgeous space that will help bring our products to life. Our store will feel elevated yet laid back and inviting. We think customers who know and love us will be excited to ‘meet’ us for the first time and we will be a pleasant surprise to new customers as well.”
Unlike other brand strategy retail examples such as Bonobos or Brilliant Earth who request or heavily encourage appointments, Garnet Hill’s full price store and factory outlet store are both open without appointment to anyone to stop in and shop during the store hours.
Brand Strategy Future for Garnet Hill
So far, Qurate Retail Group has opened one full-price store for Garnet Hill, as well as continuing to operate the outlet store. Given Garnet Hill’s small position in the parent company’s portfolio, modest growth and investment is the future scenario.
Depending on the full priced store’s success, Qurate may open a few additional Garnet Hill locations, however, this expansion needs to compete with other parent company strategic priorities such as business transformation and streaming that may be more pressing.
“The company opened two new retail stores (not Garnet Hill) and relocated one in Q4, and the expansion has driven sales and improved conversion, Qurate President and CEO David Rawlinson said.”
Gorjana Brand Strategy Example:
From Wholesale to 65 Stores
Quintessentially California Gorjana is a second jewelry brand strategy example, with a very different approach from Brilliant Earth. Gorjana is named after co-founder Gorjana Reidel who created the brand in 2004. Gorjana is a moderately-priced jewelry brand focused on everyday jewelry.
Initially, Gorjana was primarily sold in boutique jewelry stores. Then in 2014, Gorjana partnered with Nordstrom, moving beyond boutique stores. And through 2017, 90% of Gorjana’s sales were through wholesale channels.
In February 2016, 12 years after brand launch, the first Gorjana retail store opened in the brand’s hometown of Laguna Beach, CA. Four years later in 2020, Gorjana claimed 80% of revenues from DTC, and 20% from wholesale.
As of March 2024, there are 65 Gorjana stores listed on Gorjana’s website, ranging in size from 750 to 1,400 square feet. The number of Gorjana retail stores is growing rapidly: with the first store in 2016, seven stores in 2018, 18 stores in 2020, 26 stores in 2021, 33 stores in 2022, 50 as of June 2023 and 65 in first quarter 2024. The West region had 24 stores, followed by Northeast at 17, Southwest at 12, Southeast at eight and Midwest at four.
To date, the company is self-funded without outside investors, according to publicly-available sources.
2023 online revenues for Gorjana are estimated by one source at $42.9 million (not including the store locations), up about 20% compared with 2022. January 2024 online revenues are estimated at $4.9 million, which annualize to $59 million for 2024, without adjusting for seasonality.
Store revenues are not disclosed by this private company. If store revenues are $250,000 per year, that translates to $16 million; if they are $350,000, then around $23 million. Adding this to the online revenue estimates brings the total to $66 million for 2023.
For perspective on the potential of the jewelry market from an organization with many stores, Signet Jewelers (who owns Kay, Zales, Jared, and other brands) had North American store revenues of $5.7 billion for fiscal 2023 (or 80% of total) and online revenues of $1.5 billion. For North America in fiscal 2023, Signet reports their mix of business as: 44% bridal, 41% fashion, 3% watches, 9% service and 2% other. Gorjana competes primarily in the fashion segment of the jewelry market.
Target Customer for Gorjana
Gorjana’s primary target customer is a lower-to-moderate-income woman ages 18-39 purchasing fashion jewelry primarily for herself, and occasionally as a gift for friends or family. She enjoys layering pieces with the look of fine gold jewelry at more affordable price points.
Secondary target customers for Gorjana include a wide range of customers, from reluctant fathers to gift-givers to frazzled therapy.
Jason Griffin Reidel, co-founder and CEO describes the brand personas:
“I want to think about what’s the woman that just wants to go in and shop by herself, how does she feel? What’s the woman that’s in there with her kids, how do they feel? What’s the person that walks in with their dog? What’s the couple that walks in where the boyfriend doesn’t really want to be there? What’s the guy walking in by himself looking for a gift? Who are all these little personas that are happening?”
A video from one customer confirms the appeal of buying for herself:
“I heard of Gorjana while in college and working at Nordstrom’s. Looking at jewelry to suit my style and my budget (student). I have lost gold jewelry more than once, and Gorjana is more well known for gold plated jewelry under $100, with an average price of $60 to $70….I decided to buy it and remember the ‘100% Happiness Guarantee’….Bought the sunburst coin necklace and after 3 years it broke…Was going to buy another one, went to the store, told the employee, she says no problem, doesn’t ask for a receipt and gives me a new one free…Affordable, bougie pieces.”
One source describes the appeal of Gorjana’s products to its target customer:
“Jewelry is meant to be admired up close, it requires one on one attention. It’s the kind of jewelry you don’t have to change with each outfit, as they really ‘go’ with anything, which is how tried and tested signature pieces are born. And they’re meant to be layered.”
“On her namesake storefront you’ll see Gorjana’s name in shiny gold font with a lower case ‘g.’ There’s something approachable about the lower case, much like her jewelry which is wearable, approachable and flattering. It’s not about look at my bling— this simple concept is the key to her aesthetic.”
A segmentation of Signet customers found 5 segments: The Gifter, The Sentimentalist, The Stylish Shopper, The Influencer and Practical Shopper. Of these segments, Gorjana seems most likely to appeal to the last three.
Brand Strategy Pillars / Commitments for Gorjana
Gorjana offers a number of brand pillars including:
- Gorgeous, yet affordable jewelry, “characterized by clean lines, delicate shapes and simple yet elegant details”
- Made for everyday wear (“lightweight and comfortable”)
- Pieces that are made for layering and versatile
- Eco-conscious jewelry production with five percent of annual profits to partner charities
One reviewer nicely summarizes Gorjana’s “pros” and “cons” as follows:
- Pros are: “Minimalist Design, Quality Materials, Affordability and Ethical and Sustainable Practices.”
- Cons are: “Durability of Plating and Limited Gemstone Options.”
Gold-plating may last approximately two years, depending on how it’s treated, so there is a definite disposability element to Gorjana. The purchase needn’t be a huge, long-term commitment. As the one target consumer quote illustrates, jewelry can be lost, or break and at the moderate price point, that is acceptable, particularly with Gorjana offering the intentionally vague 100% Happiness Guarantee of:
“Our Happiness Guarantee means that we are committed to the integrity of our jewelry and will make every effort to sustain the original quality of your items.”
Brand Strategy Elements for Gorjana Stores
Gorjana’s retail stores are intended to embody the Laguna Beach California beach lifestyle, and to give the idea that you are walking into an airy and comfortable home. Says Gorjana Reidel,
“My goal, and our goal here, is that to bring Laguna to wherever – its’s like Laguna in New York, it’s Laguna in Scottsdale, it’s even Laguna in Malibu to a certain extent. Like, there’s that vibe and our store has a certain aesthetic. And it’s also we are really intentional about making the stores feel welcoming, like you are coming into our home.”
The goal is to evoke the Laguna Beach lifestyle, so “it’s all about place, character, quality and authenticity.”
Another aspect is the “welcoming personality.” Along with the store staff, the signature scent is intended to help welcome the customer to the store. Reidel says,
“Like obviously it’s a store. But I want you to feel like you’re in someone’s welcoming home and have that feeling. So we just basically developed our own scent last year. And now all of our stores are scented with our signature scent. We have all the – there’s so many details and things in there that we want it to feel that way.”
Jason Griffin Reidel, co-founder and CEO explains additional store benefits and the commitment to store expansion,
“We are further investing into retail expansion in 2022 by expanding into new markets domestically. Retail is fundamental to our brand’s growth strategy and we continue to see phenomenal growth in the retail section. We look forward to bringing the gorjana retail experience to new communities and providing customers with the ability to interact with our brand in person and have access to services like buy online, pick up in store, same day delivery, complimentary bespoke engraving and personalized styling tips.”
Brand Strategy Future for Gorjana
Gorjana has made a commitment to continuing to open retail stores, as a major growth driver. Openings have continued in 2024.
Other potential brand strategy futures could include international store openings, opening store within a store at other retailers, or being acquired by another brand.
YETI Brand Strategy Example:
From Wholesale to DTC, with 19 Stores
Our Insight to Action team first profiled the YETI brand strategy example in 2021, and since then the YETI brand continues to grow, topping $1.6 billion in revenues for 2023, up four percent from 2022.
The company was founded in 2005 and launched in 2006. Similar to other brand strategy examples like Babylist, Beyond Yoga and Bonobos, the YETI origin story is born out of the founding brothers’ lifestyle requirements, and their frustrations with the non-durable cooler options available in the early 2000s as captured on the website.
“The coolers Roy and Ryan grew up with couldn’t meet the demands of serious anglers or last in the relentless Texas heat. So they made their own – designing the legendary Tundra® with enough insulation to keep ice for days and durability to last a lifetime.”
Private equity firm Cortec Group acquired a majority stake in YETI in 2012 for $67 million.
With Cortec, YETI grew from $90 million in 2012, to $640 million in 2017. In 2014, the YETI Rambler Tumber was introduced, signaling the expansion to drinkware and every day. Back in 2017, YETI’s sales were 70% wholesale (e.g., Dick’s Sporting Goods, Bass Pro Shoppes, REI and independent retailers) and 30% DTC (YETI website, Amazon and stores).
The company went public in 2018 with its stock priced at approximately $15.93/share in October 2018. Share prices stand at approximately $38.75 in late March 2024, more than double the opening price.
While the brand started with coolers, in 2023, drinkware at one billion dollars in revenues are larger than coolers and equipment at $600 million. Drinkware is a visible, everyday expression of the YETI brand, while outdoor adventures are more episodic and aspirational.
Also in 2023, DTC accounts for $998 million (up nine percent from 2022), while wholesale sales of $661 million decreased two percent).
YETI’s 8,000 square foot Austin flagship store opened in 2017, 12 years after the brand was founded. As of November 2022, the brand had 13 stores, and in early 2024, there are 19 stores currently listed on the website. Store sizes vary, from Austin flagship at 8,000 square feet to Charleston at 5,000 square feet to Nebraska at 22,000 square feet.
YETI’s President, Matt Reintjes explained the stores play an important role to showcase the brand, build awareness and drive overall DTC sales with dot coms the top priority.
“They’re (stores) great brand beacons…They change the assortment that a consumer considers. So, they work the entire funnel — from consideration all the way through to purchase — and we think it also benefits our omnichannel. The key focus is on our dot-coms, and then really ramping the store contribution to store connectivity to the overall digital DTC piece.”
Target Customer for YETI
Like other brand strategy origin stories, the primary target customer for YETI was the founder’s lifestyle target, in this case, Outdoor Enthusiasts.
Initial brand-building marketing focused on endorsements from opinion leader hunters and fishermen. According to founder Roy Seiders:
“It was a huge help to have high-profile hunters and fishers reinforce that image with testimonials. At the time, no other cooler company was advertising to outdoor enthusiasts or taking advantage of the professionals in the sport. Ryan and I couldn’t quite believe it; it was wide open.”
Demographically, YETI’s marketing originally depicted primarily “30-49, white, middle-to-upper class, outdoorsmen” in its marketing.
The primary target is seeking “adventure,” and this can come in many forms.
In 2014, YETI expanded its brand target to adventure seekers and people who spend time outdoors across a broad range of segments, including farmers, ranchers, snowboarders, mountain bikers and tailgaters in addition to hunters and fishermen. Backyard barbeque chefs also fall within the expanded definition.
From 2015 to 2018, 69% hunters to 38% hunters, and women grew from 9% to 34%. It’s clear that women are now part of YETI’s primary target.
With the number of mugs and tumblers outweighing the coolers, enjoying a cup of morning coffee that’s kept warm by the YETI mug, or water that’s kept cool in the tumblers is the relevant everyday adventure for both men and women, and many of these adventures are in the workplace, not just outdoors.
At business conferences, YETI-brand coolers and mugs are often featured as giveaway prizes, with the apparent aim of providing a “luxury” brand experience with for the winners to display as a “status symbol.” Just this week, one of our global suppliers reached out to be sure we didn’t miss their offer to provide us with a YETI tumbler (I now own two YETI tumblers from corporate gifts).
Brand Strategy Pillars / Commitments for YETI
The YETI brand was founded on the premise of durability, specifically innovating to create YETI TUNDRA coolers to stand up to the performance requirements of fishermen and hunters.
The brand is also top of the line, and occupies a luxury positioning, driven by its TUNDRA coolers that are priced between $275 to $1,500, well above everyday coolers.
Walt Larsen leveraged his experience with the luxury bow market to position YETI as a brand:
“made for those who are passionate about the adventure and respect high quality product craftmanship.”
YETI has a number of initiatives to support the environment and reduce the environmental impact of their products.
Brand Strategy Elements for YETI Stores
Back in 2006 and 2007, YETI products were initially sold at trade shows. Then in 2008, YETIs were sold at Bass Pro and Cabela’s, following a wholesale model. The brand has been on a long-term strategy to increase DTC, and stores are a part of this strategy, though secondary to dot coms.
Some YETI stores offer the ability to “personalize your Tundra Cooler only in stores.” Like online, YETI stores also offer in-store customization for drinkware.
Stores also offer their space as an event venue and water refills at a water refill station.
Visually the customers can be inspired by outdoor images.
“’We are hoping to immerse customers in the brand,’ said Doug Schmidt, director of retail operations for YETI. ‘This store is about experiences and inspiring people to get outside.’”
Brand Strategy Future for YETI
The company is continuing to expand its product categories and to expand lines to new parts of product categories, with the acquisitions of Mystery Ranch (a specialist in packs) and Butter Pat (cast iron cookware).
Says YETI President Matt Reintjes,
“Mystery Ranch is known for their carry systems…And what I mentioned earlier, and I believe [an earlier] question was carry and access are two hugely important things in driving differentiation in packs. And so we see with Layne’s leadership and the talent team we now have in Bozeman with the talent, incredibly talented team we have in Austin, the ability to really become not only a big player and a relevant player in outdoor broadly, but also everyday carry. And I think that’s where Mystery Ranch as a brand had made a little bit of move there, but their legacy history was really tied into those heavy hauling, heavy carry environments. And so that’s why we saw incredibly complementary, and we think those technologies and those designs are leverageable and have more broad, more scalable application.”
Additional acquisitions are on YETI brand strategy and will continue. Reintjes says,
“These deals illustrate YETI’s strategy to pursue acquisitions as an extension of our product line up while complementing our organic product expansion.”
In 2022, Yeti stated plans to open four to six stores per year, so additional store openings are to be expected.
International continues to be a focus, perhaps international stores will be on the YETI brand’s future horizon, along with international representing 20% of sales. For 2023, international sales were 15% of total.
“Brand strategy for international is laser-focused on alignment based on local pursuits & communities (YETI’s term for categorized outdoor hobbies/interests). For example, snowboarding is a key community for growing the Canadian business. Marketing to this group of enthusiasts helped international drive 45% YoY growth which is a 3x increase from Q1 2020. YETI CFO Paul Carbone mentioned on the May 11 (2022) call an informal target of at least 20% for international sales’ proportion of total.”
Since these brands have significant online businesses, a comparison across their performance according to a third party intelligence Grips Intelligence provider provides additional perspective. To be clear, these are estimates, not reported data from the companies in this comparison.
For January 2024, the Grips estimate for online revenues for these brands ranged from the lower end of $3.3 million for Beyond Yoga and $5.3 million for Gorjana to the higher end of $56 million for Brilliant Earth and $66 million for Babylist. YETI, Canada Goose and Garnet Hill each were around $10 million estimated for the month.
Average order sizes are also interesting to consider, with YETI, Babylist, Beyond Yoga and Gorjana all in the lower $150 to $225 transaction size category and Garnet Hill, Canada Goose and Brilliant Earth in the higher $400-$800 category, and Brilliant Earth the highest at $700 to $800.
Over time, it will be interesting to see the rise and fall of these brand strategy examples growing with store expansion. We’d love to learn about more brand strategy examples and consider the brand’s lifecycle as the niche brands move from their initial customer target to broader targets and more everyday categories.
A popular strategy for emerging brands is a pop-up store. While not yet in permanent stores, the future may hold store strategy examples for brands with pop-ups like Cider.
A bounty of additional brand strategy examples found on Insight to Action’s brand strategy resources page include Boar’s Head, lululemon, Nintendo Switch, Old Spice, Super Mario Bros. Pokemon, Tommy Bahama and Sephora. Review brand strategy examples of good/better/best pricing. Or talk brand strategy with us at an upcoming office hour.
