A $2 Billion Company Builds Beyond Boots
No one who visits a store like Bed Bath and Beyond in 2022 can miss the effects of this new growth strategy example from UGG. UGG blankets, pillows, and even baskets are readily available and invitingly soft. Nor could a visitor to Costco or Nordstrom miss UGG’s clothing offerings.
UGG has expanded. Far from selling only boots, UGG now offers both clothing and home goods. With its reputation for comfort, the footwear brand has expanded into other markets where it can build on its popularity and recognizability as a purveyor of plush, warm products.
Looking a bit at the history of the brand and its image, we can see how UGG was able to employ a successful brand growth strategy to respond to the threats and opportunities of a changing market.
Growth Strategy Example:
Decline in Boot Popularity Threatens the Brand
I vividly remember my first days at a new middle school in fall 2008: I was extremely glad to own a pair of UGG boots, as when I got to the new school, I discovered that every other girl in my class was wearing them every day. Like Justin Bieber, the UGG boot was king.
My experience tracks with the history of the brand. Though UGG was actually founded in the 1970s, they saw their peak popularity as footwear in the global market in the 2000s. According to Vogue, the peak of the brand’s popularity among fashion influencers was more in the early to mid noughties. The boot was helped to fame by a shoutout from Oprah in 2003. While all of this was a little earlier than my middle school days, it is more than plausible that midwestern middle schoolers would lag behind the fashion vanguard. Regardless, it is clear that the boots were dominant in the 2000s. If I were writing this growth strategy example at that time, it would be all about the boots.
However, UGG boots are now mostly spoken of in the past tense, especially in such magazines as Vogue:
“there was a time when Ugg boots were cherished commodities”
As this history of the UGG boot argues, trendsetters were through with UGG boots by 2011, and the boots fell thoroughly out of fashion, even with midwestern tweens, in the following years. In just a few years, UGGs went from a must-have to something that any girl would be embarrassed to be seen in. The fickleness of fashion presented a challenge: how can a company survive when their signature product has become passé?
UGG Homegoods Growth Strategy Example:
Keeping Brand Momentum
In 2013, UGG began offering a line of homegoods, such as towels, pillows, blankets, and baskets. This is a stellar growth strategy example, as soft homegoods build on UGG’s touchable image. Note the timing of this occurrence: just as the boots were going out of style.
At first glance, the UGG brand might have seemed tainted by the mid-2010s, especially as the brand was associated with a now unfashionable item. However, by expanding into home goods, UGG was able to leverage their existing brand positively: an unfashionable boot might still be a comfortable boot, and the homegoods UGG sells, such as faux-fur blankets, play into this comfortable reputation. Nostalgia may also play a role, as the middle schoolers who once wore UGG boots are aging into the homegoods market. In multiple ways, UGG was able to leverage its reputation in a new sector.
A Pandemic Growth Strategy Example:
Strategically Expanding the Brand into Clothing
Another way that UGG was able to respond to the declining popularity of its signature sheepskin footwear, as well as capitalize on a new market trend, was by expanding into clothing.
UGG expanded into clothing in the late 2010s, but solidified their line even more in 2020, just in time for the pandemic. By their own admission, UGG did not expand further into comfortable clothing by anticipating the pandemic, merely by thinking about what sort of expansion could best fit their brand image.
While in 2020 the brand expanded to offer “more elevated” clothing options, these options remained more in the sportswear category, albeit in a more fashion-forward way. UGG did not attempt to become, for example, a formalwear brand; this would have clashed with their brand image. Instead, they leaned into the popularity of streetwear and athleisure and created products that were stylish, while remaining casual and comfortable. This is a good example of using an existing brand image to respond to a new market trend. Insight to Action can help support this sort of growth strategy.
Of course, the tides might shift again. According to The Independent, a UK newsletter,
“Shoppers are putting lockdown firmly behind them as they buy more formal wear and travel-related items rather than loungewear.”
Therefore, UGG might see more sustainable success in their home goods sector. Furthermore, some fashion experts argue that the boot may be making a comeback, given the recent revivification of 2000s fashion, especially among Gen Z. By expanding into several markets which all fit their brand image, UGG is less vulnerable to extreme trends in any one market.
Clever Growth Strategy Example Increases the Market Size UGG is Able to Access
By looking at some of the markets UGG was able to expand into, we can understand how the brand has been able to thrive in recent years, even as the popularity of its signature boots may have waned. While the table below uses very rough numbers, nonetheless it demonstrates how they were able to access more and more markets over time, by expanding their brand. Even better, this expansion was not at random, but leveraged their existing brand image.
Furthermore, Decker’s (the corporate owner of UGG) has maintained fairly steady growth in the last 10 years. Given that UGG accounts for over half of Decker’s revenue, it seems that UGG’s choices have been fruitful.
|Global Market Size
|Total Market Size
Insight to Action Can Assist with Your Brand’s Growth Strategy
UGG was faced with a challenge: all trends come to an end. We chose them as a growth strategy example because they were able to expand several times, building on their existing brand image. By understanding the path of companies like UGG, we can better understand how to keep ourselves afloat on the shifting sea of the market. Insight to Action can provide your company with the marketing expertise needed to make strategic moves.
For more examples of brand growth strategy, as well as information on positioning, market segmentation, competitor analysis, and more, please visit our resources page. We also offer office hours where you can speak with a member of our team about these topics, and an email newsletter.