In its second-largest acquisition, Amazon buys the company for $970 million.
The apparel company uses videos and scanning to build sales and buzz.
Columbia Sportswear Co. began investing heavily in product innovation, web marketing and sales support to retailers three years ago. Now, 10 fashion seasons in, sales, traffic and conversions are up and moving higher, said Mick McCormick, Columbia’s executive vice president of global sales and marketing, today at the 2011 Shop.org Annual Summit in Boston.
Columbia is No. 314 in the Internet Retailer Top 500 Guide.
McCormick said the company’s four brands—Mountain Hard Wear, Sorel, Montrail and Columbia—were growing stale in 2008 and losing relevance with consumers. The typical Columbia-brand customer in particular was aging and the brand seemed less interesting for younger consumers. The company decided to invest in innovation and marketing to jump-start sales.
Mountain Hard Wear, which sells mountain climbing apparel and gear to climbing enthusiasts, for example, was selling the same product line year after year. With the investment, the company developed a line of climbing gear that reduced by more than half the weight of a typical gear set-up. The company then promoted its innovation through a series of web videos that featured a top mountain climber who demonstrated how quickly he could climb mountains with gear that weighed only 12 pounds as opposed to the previous 26 pounds.
“If you are going to be a world class brand, the No. 1 thing you need to be able to do is tell that story,” McCormick said. “Digital is critical for us.”
Columbia also overhauled the Sorel brand of footwear from a workwear line for men laboring in cold climates to a line of winter boots aimed at fashionable women; Columbia again used videos and online ads to introduce the line to consumers.
For the namesake Columbia brand, the company developed and patented product technologies that McCormick said set it apart from competitors. He says prior to the investment, for example, Columbia held only one product patent. It now has or has applied for 157 patents. To help explain the product improvements, starting this fall each Columbia Sportswear hang tag will feature a quick-response code that consumers inside stores scan with their smartphones to link to a 30-second video that humorously explains the product’s benefits.
“Video is a great way to tell a story that is so technical but is so fun,” he said, noting that Columbia’s resellers also can use the videos to help merchandise the products on their sites. McCormick says the conversion rate on Columbia.com increased 500% among consumers who watched the explanatory video compared with those who did not.
Columbia also dramatically shifted its marketing spending to the web. Before the innovation push, Columbia spent 87% of its marketing budget on traditional channels like print. Now it spends 74% of its budget on digital marketing, McCormick said.
The results, McCormick said, speak for themselves. In 2007, sales across all brands were $1.2 billion and decreasing. Columbia projects 2011 sales will reach $1.7 billion. The average age of a Columbia Sportswear buyer dropped 10% in the span of one year, which McCormick calls a spectacular change in such a short timespan. He said consumers’ perception of the Columbia as technologically advanced brand also increased by more than 50% in one year. Web traffic to Columbia.com increased 394%. Sales of Sorel-brand boots are up 710% since Columbia refashioned the line now to target women.
“Our consumers are inspired,” McCormick said. “You can see it in the metrics.”