What is the difference between foolhardy and courageous? It’s like the difference between arrogance and confidence; it’s all in the results. Stewart Whitney, Brand President of Timberland, is both courageous and confident. After all, who dares to cut products, eliminate a discount pricing strategy and raise prices across an entire product line when growth is the goal?
Timberland announces a change
Timberland’s management shakeup didn’t seem extraordinary or even unusual. When Patrik Frisk, the new Coalition President of Outdoor Americas for VF (NYSE: VFC), said “To empower the significant growth ahead for the Timberland® brand, we need to connect with our end consumer from head to toe,” it sounded an awful lot like the same old same old. Appointing Stewart Whitney Brand President was part of the plan to grow revenues by $1.4 billion during the next five years. Timberland’s management expected total revenues to reach $3.1 billion by the end of 2019, representing growth of 13% per year.
The Timberland® brand, a wholly owned subsidiary of VF Corporation, is best known for it’s rugged and fashionable high top yellow leather boots. It was a successful and long established footwear and apparel company whose sales were spectacularly flat. When Whitney took the helm he might have tried to lift sales by deploying as many non-boat rocking tactics as possible. Instead, Whitney decided to blow up the brand, to cut products, eliminate a discount pricing strategy and raise prices across an entire product line.
Things are going to change around here
No department was untouched. Timberland’s product designers were ejected from their comfort zone and asked to create new ambitious product lines and styles. Marketing was tasked with revamping the company’s entire global marketing and messaging. The wholesale division had to sell jittery retailers on a leaner product line with dramatically less SKUs. Retail and ecommerce eliminated their discount pricing strategy essentially raising prices across the entire product line. Whitney was tilting full speed ahead, at the risk of becoming either a business legend or becoming an exemplary failure.
In our work we often see how difficult the smallest change can be to execute, but Whitney was making deep foundational changes to a brand that didn’t seem broken to most observers inside and outside the company.
Whitney, no doubt, had to contend with the guardians of the company’s status quo. Surely they came out in full force challenging every move, trumpeting the company’s past successes and provoking insomnia and hand wringing amongst their colleagues. He communicated with the board of directors, the executive team, employees, partners, distributors and retailers about his vision. You may imagine some calling him a maverick, while others called him nuts.
Courage and confidence are fueled by data
It wasn’t just Whitney’s courage that fueled the brand makeover, it was data. While you could point to any of the changes he was driving as radical, the most significant change Whitney made was to steer Timberland away from being a product-driven company and towards becoming a data-driven company.
Whitney bet the company on it’s customer data and with Timberland posting a 15% increase in year over year sales in 2014, the bet seems to be paying off. In the Washington Post Sarah Halzack writes about the origin of this success:
“…the cornerstone of the comeback has been a two-year customer study in which it collected data from 18,000 people across eight countries. In analyzing the trove of responses, Timberland was able to diagnose its problems and to zero in on its ideal customer — an urban dweller with a casual interest in the outdoors.”
What is just as remarkable as Whitney’s courage to lead foundational change in an already good organization was his commitment to understanding customer data rather than simply collecting and referencing it. Far too often execs and marketers cherry pick the data that reinforces their own self-inflicted perspective. Other companies collect data, yet as we wrote about in Tesco’s case , a myopic reading of the data leads to disastrous corporate decisions. Whitney and his team read the customer’s story in the data. And armed with that narrative he is transforming Timberland from a good brand to more exciting and relevant one.
Armed with a customer-centric narrative
The narrative started with their ideal customer. They named her the “outdoor lifestyler’:
“They’re definitely connected to the outdoors, but in a more casual, everyday way,” Davey said. “They care about the outdoors, but they also care about style. It was really important to them to look right for the occasion.”
The outdoor lifestyler, in other words, is a city dweller who goes for a casual afternoon hike or someone who leaves her house in the morning not knowing if she’s going to spend her afternoon at the park or at the movies. It’s someone who wants versatile clothes that blend in rather than stand out.”
Speaking to outdoor lifestylers would be a sizable departure from their current brand image. In the U.S. Timberland had developed hip-hop cred with rappers by naming the yellow boot “Timbs”. While in other countries Timberland’s reputation was focused mostly on durability. Abandoning these messages probably looked like a tremendous risk. I’m sure the marketers pointed that out. It was that messaging that kept the lights on yet maintained their current, albeit flat, sales.
Raising prices to save the brand?
Timberland killed their discount pricing model:
Ryan Shadrin, vice president of retail and digital commerce for North America, said it was a scary decision to make but one that has ultimately helped profit margins. At first, Shadrin said, “It’s almost like dead tide. There’s just a point of this eerie quiet where you’re like, ‘Where did everybody go?’ It’s because they’re sort of waiting,” he said, to pounce on a promotion.
Eventually though, shoppers came off the wall when they realized the old promotional cadence was not coming back.
All the changes at Timberland, Shadrin said, “lifted the brand to where we can command those higher prices. The consumer is willing to pay it.”
The result is that profit margin is up 13%.
Results determine the difference between foolhardy and courageous
In business there is a big difference between knowing the right thing to do, and doing the right thing. Doing the right thing always takes courage but knowing the right thing to do requires that you understand your customers. And the more committed you become to understanding your customer and focusing your company on delighting them the less actual courage you will need. That is the point where confidence replaces arrogance.
A legendary company must be customer-centered, practice data-driven customer experience design, and manage by narrative. That is exactly what the Buyer Legends process is designed to do.
So basic that it seems radical
So why don’t more companies actually put their customers first? We all know why. However, lets applaud the ones who do. We encourage you to read the entire Washington Post story to appreciate just how comprehensive the Timberland makeover was. Nevertheless, this strikes to the heart of why Whitney has been successful:
Timberland “could’ve followed the many brands that floundered in this changing retail environment, but if you look at all of their strategies holistically, they’re all developed with a steadfast focus on the consumer and innovation,” said Shilpa Rosenberry, senior director of consumer strategy and innovation at Daymon, a retail consultancy.
Timberland’s switch to a consumer-data-driven approach reflects a broader change in an industry where the power dynamics between retailer and customer have shifted to favor the shopper. Unprecedented access to pricing information and product reviews on the Web has made for smarter, more-informed buyers, and retailers are more focused than ever on catering to their high expectations. By letting consumers lead the way, Timberland has rebooted its brand.
Become the hero by turning your customer into the hero of your Buyer Legend
Stewart Whitney is a real-life business hero and not just because he virtually put his vital parts on a chopping block. Whitney is a hero because of his radical fairy-godfather-like commitment to delivering what his customers really want. That’s a winning combo, and one that makes for a happy ending to this story.
Do you have the courage and confidence to be this committed to your customers?
We hope you do.
We will be cheering for you.
And if you want assistance we, the Buyer Legends team, are ready to help you design and optimize a customer-centered, data-driven customer experience that is supported by narrative.