Source: Slide from Columbia Sportwear’s 2022 Investor Day Presentation
Will Columbia Sportswear benefit from a greater wholesale emphasis?
At its first Investor Day in its 84-year history, Columbia Sportswear announced plans to ”double down” on wholesale growth even as numerous other active lifestyle brands emphasize direct-to-consumer (DTC) initiatives.
At the event last week, Tim Sheerin, SVP, global wholesale, said that when he first joined the company in 2016, CEO Tim Boyle described the Columbia brand as “humble, accessible, democratic.”
“Maybe the most interesting of the three words to me was democratic,” said Mr. Sheerin, who formerly led Nike’s North American sales. “We all know brands out there that want to be the most premium and many of them are shifting to a direct business model. At Columbia, we want our brands, we want our products, we want our distribution to be more democratic.”
The top 50 strategic partners represent 75 percent of Columbia’s wholesale business, and that’s expected to expand. Mr. Sheerin said, “Retail partners make great connections to a broad consumer base and we believe those partners will be able to grow those consumer connections for years to come.”
Columbia also works with smaller specialty stories in the outdoor and fashion space “to help authenticate our product.”
Mr. Sheerin said, however, that Columbia’s marketplace is “digitally-led”, not only because the fastest growth is expected to come online, but because Columbia.com is the first place where consumers experience the brand. He said, “It’s the face of the brand. It’s our storytelling. Our celebration. It’s our product. It’s our innovation. That’s where we focus our messaging and our content.”
In the U.S., Canada and Europe, the brand is concentrating its physical retail strategy on its factory outlet stores with the full-price focus on providing differentiation and elevated storytelling at wholesale accounts.
Mr. Sheerin added, “We create our content with an eye for columbia.com but the backbone of our business is with our strategic partners. So we’ll take that content, we’ll collaborate with our partners and help elevate the Columbia shopping experience within their stores and on their website.”
Columbia’s wholesale emphasis runs counter to the increasing movement toward direct selling by The North Face, Patagonia, Arc’teryx and Canada Goose in the outdoor space as well as Nike, Adidas, Polo Ralph Lauren and other major apparel players.
Discussion Questions
DISCUSSION QUESTIONS: Does Columbia Sportswear’s focus on wholesale brick and mortar relationships vs. owned brick and mortar make sense? What should guide a brand’s decision to emphasize third-party selling versus leaning into going direct?
Poll
Loading …BrainTrust
Jenn McMillen
Chief Accelerant at Incendio & Forbes Contributing Writer
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
It’s all about reach. If you have a premium brand, you want to protect it by controlling the experience, the presentation, and the customer service in-store. With Columbia proclaiming itself a democratic brand, which means designed for or liked by most people, focusing on wholesale delivers exactly that.
I think it makes sense. Stores are a big investment (some might say, a distraction) and unless the company is really big and well-known, it’s easier to be “found” in stores that carry other brands, too. They can always open their own stores again later if it feels right.
When a major brand like Nike pulls back from wholesale, it creates space for others to jump in. Rather than inspiring other brands to follow in Nike’s footsteps, plenty of brands have decided to grow by leveraging others’ platforms and physical presence (otherwise known as wholesale). Claire’s impressive turnaround hinged on wholesale. It’s a viable and practical model that has withstood the test of time. Even more so as the combined physical and digital reach of some retailers reaches new heights.
I’m really scratching my head on this conversation. Columbia is “digitally-led” but their (physical stores) strategic partners are “the backbone of the business”? While smaller specialty stores do indeed help “authenticate” the brand, a couple of racks sitting in the middle of all the competition is not the same kind of storytelling as Columbia would have available to it in its own stores. I’m thinking of the kind of storytelling I see in Timberland, or Filson, or The North Face, or Patagonia stores. And they think their website is doing better storytelling than their own stores could project? Not from where I’m sitting. I happen to like Columbia as a brand. I own their shirts, pants and jackets. I can’t help but wonder of the president of Columbia would make the exact same comments as the SVP of Wholesale.
It is interesting to note that Columbia sees the Internet presence as a strong marketing platform through which to deliver their message to the consuming public. (Remember radio, magazines and TV? None “sold” the product.). I am not a believer in DTC and Columbia Sportswear’s emphasis on wholesale distribution is the correct approach to growth.
Wholesale is a viable channel for any brand trying to tap into a market and get in front of a customer where they don’t already exist. Multi-brand retailers can leverage data to help inform merchandising strategies from product assortment to price point.
What to avoid is when the wholesale relationship is more buyer/vendor vs. wholesale partner. You don’t want to be bullied and lose your brand aesthetic or DNA because of what the retail buyer wants. I was a department store buyer for years and have also been on the brand side. It can be very one-sided.
Columbia is hardly bashful about the wholesale business. Their customers include J.C. Penney, Macy’s, Kohl’s, Patagonia, Walmart, others, and of course, Amazon. These retailers sell in-store and online. Why would Columbia want in any way to emphasize DTC for anything other than convenience for some shoppers who happen onto the website?
Wait times shorten, lines shorten and this creates opportunities to have customer discussions at deep depths, which will still speed up the trip for everyone. As a long-time pharmacy customer, hooray!
Unlike Nike, Adidas, Patagonia and some of the others mentioned, Columbia isn’t such a “sought-after” leading or premium brand. Wholesale distribution makes sense. As the other, stronger brands edit their wholesale partners, Columbia is smart to step in and take some of that business. It’s actually refreshing to see a brand recognize itself for what it is, unlike some others who feign a luxury or premium position when they aren’t such a thing.
Direct-to-consumer operations are notoriously challenging. So it makes sense to diversify with B2B and B2C models. Especially so when you know you have a great product that can stand the test of time, like Columbia does.
This is about delivering on both products and expectations to their customers, and for Columbia, these customers include a wholesale emphasis as much as a retail one. How Columbia manages to do this may be the better definer of their success, since many companies cannot seem to find the successful balance to making this happen.