Brand marketers are embracing e-commerce with newfound vitality to compensate for ebbing sales from retail partners and to grab control of their brand in the digital world.
Outdoor apparel manufacturer Columbia Sportswear launched its first e-commerce Web site in August after 14 years of operating an informational Web site. The new site, created by e-commerce technology company Demandware, features an opportunity to buy products directly, a blog, product ratings and reviews, product filters, extensive brand content and links to retailers carrying the brand.
“Our goal for the site is to make sure our brand is presented in the best possible light and that the information we provide about the products and brand is as in-depth as possible,” says Paul Zaengle, senior director of e-commerce at Columbia Sportswear. “If we do that well, it not only benefits Columbia Sportswear; it also benefits our wholesale accounts, because consumers desire the brand and come looking for it in their channels.”
Columbia Sportswear waited to launch an e-commerce site out of a sense of loyalty to the retailers that helped grow its business, says Zaengle. Channel conflict with retailers has always been an issue for brand marketers launching a direct-to-consumer strategy. Consolidation among wholesalers and availability of private label brands at retail also have risen.
“A lot of things have changed in the past 10 years,” says Zaengle. “We found it necessary to develop a retail and e-commerce presence in order to get our brand out there as effectively as we needed to in order to compete.”
The site functions as both a consumer and a b-to-b portal. From the Columbia Sportswear home page, visitors can find a retailer carrying its products anywhere in the world. From the product detail pages, shoppers can also find out which online retailers carry the product they are looking at and click through to that product at a specific online retailer’s site. Finally, Columbia Sportswear makes a variety of marketing materials, including video and animation, available on the site for retail partners.
Until a year ago, Columbia Sportswear had one corporate-owned retail store and a dozen outlet stores. Over the past year, it has opened three more stores in the Northwest, and has plans for up to 15 more in key metro markets along with 50 outlet stores. Some stores include interactive store windows and in-store displays.
The e-commerce site is part of Columbia Sportswear’s direct-to-consumer strategy to elevate the brand and provide consumers with greater access to products. Other manufacturers are following suit.
“We’ve seen a surge in the number of branded manufacturers going online or reinvesting online in the past 12 months,” says Jeffrey Max, CEO at Venda, an e-commerce company. Most are “investing in improving the branding and transactions elements of their sites,” in response to declining sales from retailers.
Brand manufacturers that have wholesale businesses in addition to their own direct-to-consumer operation “have a unique challenge,” notes Troy Brown, retail practice leader at Demandware.
“They have to placate their wholesale business, which is where the lion’s share of their revenue originates, while figuring out how to run a successful direct-to-consumer operation in order to make incremental revenue and have a direct relationship with the consumer,” Brown says. The other challenge brand manufacturers face online is juggling the need to promote the brand, versus having a user-friendly shopping experience, he says.
Like Columbia Sportswear, fashion apparel brand Lilly Pulitzer held back on launching on e-commerce Web site. The brand had an informational site since the late 1990s. It operates 22 company stores, and there are 75 independently owned Lilly Pulitzer Via Shops that primarily carry the brand.
“We started to feel that we weren’t doing as great a job connecting with a younger consumer who is very used to shopping online,” says Michelle Kelly, senior director of e-commerce, online marketing and stores at Lilly Pulitzer, of the brand’s new e-commerce site on the Venda platform. “The consumer was confused by why we didn’t have a transactional Web site when all of the other brands she is used to shopping has one. It was tough for the brand.”
Since Lilly Pulitzer wasn’t transacting online, it also wasn’t active in areas such as search marketing, affiliate marketing and social media. “We felt the need to ramp up in these areas,” Kelly explains.
The brand, which re-launched its Web site in November, works with Lilly Pulitzer Via Shops partners to minimize any potential channel conflict online. A revenue-sharing agreement is in place for customers who originated with one of the stores. The stores can also use the Lilly Pulitzer corporate site to fulfill orders if they are out of a size that a customer wants, and receive all of the money from the sale.
“We want to make sure the stores can share in the growth of our e-commerce channel,” Kelly says.
