Some retailers in Canada are immersing themselves in the culture and lifestyle of their customers and it's paying off.
To make sure that people understood skateboard culture, everyone from accounting to distribution at Burlington-based West 49 Inc. went to see the skateboarding movie Lords of Dogtown.
"Some of our employees don't necessarily come from a board culture background, so we took them to the movie so they would get it," says Cindy Mielke, director of marketing for West 49, which specializes in clothing and accessories for skateboarding, snowboarding and surfing.
Getting it also means customers, who are mainly males between the ages of 10 and 18, can walk into a store and ask the cashier how to put together a skateboard or do a trick.
|Photo courtesy of lululemon athletica|
|From West 49's skateboard culture to lululemon's yoga wear, above, retailers fit the culture of their target markets.|
"We have kids that literally hang out in our stores. We want them to loiter - it's very much a culture. The kids can sit in front of the TV monitor and say: 'Oh my gosh, can you rewind that part?' It's very much about connecting with our consumer and it has a very different feel than traditional retailers," Mielke says.
President and CEO Sam Baio started West 49 in 1995 with three stores in southwest Ontario. Today there are 65 West 49 stores in seven provinces with close to 1,000 employees.
The company, which went public last year, had $86 million in revenue for the fiscal year ending Jan. 29, 2005.
For the third quarter, which ended Oct. 29, West 49 had sales of $39.5 million, up 47.1 per cent from $26.5 million for the same quarter in 2004 when the company was still private. Third-quarter financial results are expected to be released Dec. 8.
Mielke says Baio paid attention to two trends when he started the stores: The popularity of shopping malls and the move toward individual sports from team sports. To build the community of boarders, the company sponsors professional skaters, donates money to build skateboard parks and hosts skateboarding events.
Chip Wilson, who owns Vancouver-based lululemon athletica, also noticed a trend in the late 1990s. The high-impact aerobics of the 1980s were being replaced by a gentler kind of athletics - yoga.
"I was someone old looking for a new sport," says Wilson, who opened his first clothing store in Vancouver in 1998. "I wanted to be as athletic as I could. And after selling my company Westbeach, I thought about buying into Sugoi (a cycling company) but no one needs two entrepreneurs in one company.
Today lululemon has 32 stores in North America, Australia and Japan. It plan to have 35 stores by the end of this year, according to its communications department, and more than 200 by the end of 2009.
It has been widely speculated that Wilson has been discussing selling part of the company in order to finance the expansion.
Lululemon manufactures, distributes and retails yoga clothing from stores it owns or has franchised. It also sells wholesale to other stores, mostly yoga studios.
"We don't do it for the money, I assure you," Wilson says. "We do it to support yoga studios.”
He adds that it is time-consuming working with people whose core competency is not retail clothing because they do not understand how to buy.
"We're doing it for them, not for us," he says.
West 49 retail stores are located in shopping malls and are entirely corporately owned. West 49 has its own brand, but most clothing lines are imported from California with such brands as Billabong.
Like West 49, lululemon also contributes to the community, such as helping raise $60,000 for the Centre for Integrated Healing in Vancouver, one of many events to help support the health and athletic communities.
Wilson says he learned two lessons from his early days when he opened Westbeach, a West Coast surfing and boarding clothing firm.
The first is to get rid of the middleman: "Because then you can make a higher-priced, more technical garment and sell it at a price that people will actually buy it. And until you do that you can never make as good a garment as you possibly can," Wilson says.
The second lesson was creating a look that people actually want to associate with.
Judy Zaichkowsky, a marketing professor at Simon Fraser University's business school, says: "Lululemon has two types of customers - those that are cool with the company's ethics and (those) who want the hottest clothes to wear."
Clothing retailers have always tapped into culture or life-style to sell their product, Zaichkowsky says, but it takes a certain kind of entrepreneur to market the popular culture itself as Wilson has done.
"He's got great intuition," she says. "People want to be associated with their brand and customers will buy into that."
Wilson says the company makes it a priority to seek design feedback from the people who wear the clothes.
In exchange for advice and feedback, lululemon gives 15-per-cent discounts on products to fitness professionals and an allowance of lululemon products for a year to fitness ambassadors.
It also sells to a broader market than just yoga enthusiasts. "Yoga clothing is really only 25 per cent of sales. Another 25 is for the gym or going to and from the gym," Wilson says.
Last month, West 49 purchased 24 Quebec-based stores from Modes Freedom Inc. for about $9.17 million in cash and shares. The stores, which are also focused on the youth demographic, operate under the banners Arsenic, Amnesia and D-Tox.
While each store sells to the same age group as West 49, where 70 per cent of the customers are male, each has its own culture. D-Tox, for example, sells music paraphernalia.
The company also owns a young women's clothing retailer, Off The Wall, which has 11 stores.
In November, West 49 also acquired BoardZone Inc., an online sports retailer that operates under the banner of Boardzone.com, for about $1.4 million in cash and shares. The aim, says West 49's head of investor relations Kim Mullenger, is to get all the retailers into e-commerce in the next year.
Mullenger also says the company plans to synergize all the administration systems while at the same being careful to keep each brand separate.
"Corporately, West 49's intention is to keep the culture of that brand," Mullenger says. "Customers won't see the change ... we're not looking to globalize or make the brands homogenous. Each brand will maintain its own identity."
Mielke says the company has no fears that skateboarding is going to be passé any time soon and, to ensure that, the company has promoted the sport.
"The culture has always been there, but we helped grow skateboarding in Canada and bring relevance to it," Mielke says.
"We introduced it to areas where skateboarding hasn't been popular and helped municipalities set up skateboard parks."
|Chip Wilson opened his first lululemon store in 1998.|
(Melanie Chambers can be reached at firstname.lastname@example.org)