Look anywhere this winter and then you can discover someone wearing canada goose jacka rea, parka, or vest. The Canadian-based clothing retailer has become so successful at marketing its puffy, doughboy jackets as elite winter wear that they’re one of several season’s most widely used brands. The company’s parkas, identified by the round, two-inch patch around the left sleeve as well as the coyote fur-trimmed hood, once warmed arctic explorers and Canadian Rangers, however nowadays are normally 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 getting to be loved by college students.
What sets Canada Goose apart from other outerwear companies are its exorbitant prices-$745 for a women’s coat, $245 to get a hat at Bloomingdales. Prices will go as much as $1,700.
But those steep price tags haven’t hurt business a bit. Fortune magazine reports that over the past decade, Canada Goose has seen revenues explode from $5 million to over $200 million, with some experts predicting that figure could rise to $300 million by the end on this year.
Part of Canada Goose’s success could be caused by playing up its humble founding five decades ago in a tiny warehouse in Toronto (the outerwear is still manufactured in Canada). And once private equity firm Bain Capital acquired a majority stake inside the company in 2013 to get a rumored $250 million, it had to promise to keep the manufacturing there.
Canada Goose can be a marketer’s dream, says Susan Fournier, School of Management Questrom Professor in Management and faculty director in 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 name and the ways they have formed relationships using its customers.
BU Today: The reason why Canada Goose such a popular brand at this time?
Fournier: I don’t have their advertising campaign in front of me. All I know is their marketing emanates from grassroots. They had a strong narrative, after which it started getting gathered by certain groups. People started to think about hardcore Canadians braving the cold, and so it was a fad and then transitioned from a fad right into a strong brand. I do believe it’s mostly concerning this and keeping prices high, not losing their mind with sublines like making lighter fall jackets, as an illustration. Also protecting distribution hence they don’t turn up for a cheap price store like TJ Maxx or perhaps outlet. It’s that, being smart enough to not kill it.
So you’re stating that some brands damage anything they have by expanding too quickly?
I feel that’s the way it is with tons of things. Burberry came back now in popularity, nevertheless they were at risk for a time, and exactly the same thing was true with Calvin Klein. They made their brands too available. If you’re going to be exclusive, availability-both distribution and pricing-is the opposite of that, so you will need to balance that tension really carefully.
In the advertising campaign, you have the four Ps: product, place, price, and promotion. The pricing and also the distribution are the most significant for a brand this way. It’s growing, we all want it, so it’s challenging to say, “Well, we’re not intending to make it available for everyone,” simply because you always desire to serve shareholders to make the greatest profit.
Is price the principle barrier for accessibility?
I think distribution, too. Barriers to accessibility would even be, “Can you get a hold of it?” You will need to work a bit harder to locate it. This brand has exclusive distribution; it’s not everywhere. Those are two barriers.
There’s plenty of hardy outerwear around-L.L. Bean, North Face, Patagonia. How have those brands convinced folks that winter gear is fashionable or even a luxury item?
That’s interesting too. The North Face has grown hundreds and hundreds of percent over recent years, and they also could risk blowing everything up. But folks are still within their ultra down coats, so they continue to be hanging within. But they’re kind of at that close edge.
Sooner or later, many of these brands were only found in small communities, like L.L. Bean was once for fishermen and hikers, but they broadened. I feel that’s step one; you begin to shift the course frame that you think of this as. It’s not difficult-core expedition wear, it’s about outer fashion. Outerwear is still outerwear, nevertheless, you don’t have to go by using an arctic expedition anymore.
The initial step is transitioning the emblem to fashion. Remember Swatch? The innovation in Swatch was that watches had been about timekeeping, and then they made it about fashion. They told customers when they obtained a Swatch watch, it was actually actually like that they had 10 watches due to the interchangeable bands. Same thing with eyeglasses. You once had one pair, and from now on people often have several with different designs.
Then it’s part of a trend that individuals are willing to pay more for. People are paying more forever quality things on the whole. Look at the iPhone like a great example. Who within their right mind goosejacka to enjoy $800 with a phone? But we’re doing well enough for an economy, and it’s become easier for a number of people.
Have you thought about the backstory for companies like Canada Goose? Could it be important to make a narrative around a brand name to reach your goals?
During these narratives you feel like you get to know the founder as being a person. They’re adventure seekers. It’s exactly the same thing with Patagonia and L.L. Bean. I think that’s a massive factor. Maybe more in contemporary consumption, a lot more so in the past 10 or twenty years, this concept of a narrative is vital. There are many brands out there when you don’t have got a story, as well as a character within your story, you’re behind. Such as your English classes, you will need a character along with a plot to produce a good story.
Having a story differentiates you and gives your brand authenticity, which happens to be crucial for brands today. Harley Davidson is a good example-they may have this founder myth. The founders of Snapple were hugely important for getting Snapple up and running; these people were window washers. In the event you dig into some of your top brands, they all have these mythologies. And so they have some credentials in relation to authenticity.
Canada Goose doesn’t do lots of advertising; it relies instead on product placement in movies and word-of-mouth. What’s so effective about that kind of advertising?
That’s type of a few things i was getting back to. The beauty is they don’t have got a marketing campaign with 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-in other words, placing the merchandise to the audience where you would like it to gain traction.
The procedure is basically that you try to get customers to take advantage of the product and talk about it using their friends. That’s not in the hands of the marketing team; that’s in the hands of the consumers. It’s far more powerful and credible, much more approachable. You would like to become element of culture. Once you become element of culture, then you can receive in a movie with a scene where the characters are in an extremely cold climate. Hollywood wants brands that happen to be hot simply because they convey a great deal of meaning, plus it keeps going. Individuals who are fashion bloggers want the emblem because it’s an issue that keeps going. They have authenticity; it’s not going to seem commercial, and it’s not pushing a product or service.
Why has Canada Goose made a decision to concentrate on the college market?
I don’t know the response to that without seeing their marketing plan. I really could see teens as a target; I don’t determine it’s just college. But you figure college students might have the capacity to afford this stuff, and this it’s an effective potential audience, one that’s hip. They’re not targeting younger kids.
A BU student launched a parody patch and raised money Kickstarter to manufacture the patches. Does Canada Goose make use of parodies like that?
All depends about the parody, but eighty percent of parodies are sort of good. If they’re going for your primary message, and discrediting you, that’s probably not a good idea. For example, Matthew McConaughey did several Lincoln car spots, and folks made parodies that hit a touch too close to home.
But consider the case of Snuggie. Those blankets were offered on infomercials, then your parody world got ahold of them, and a lot of parody commercials got loaded onto YouTube and that’s when that brand went nuts. A brand wants individuals to accept them within today’s cultural fabric.
Every brand desires to have this system that everybody wants, and so the challenge is always to make it cool. The test for Canada Goose will likely be developing, and let’s see if they can ride this wave and never kill it.