Tim: Welcome back, Tim Glam here. And we've got another great Signal session. I'm really excited to have in the studio here in Denver, Ian Dewar, who is the head of global consumer analytics at the VF Corp. He's got a great presentation. I'm going to stop talking. Ian, thanks for coming.
Ian Dewar: Thank you, Tim.
Tim: Are you good to go?
Ian Dewar: Let's go.
Tim: Good, I am giving it all to you. We'll do some questions at the end of this. I got some questions I want to ask, but Ian, the floor is yours.
Ian Dewar: Great. Thank you, Tim. As Tim said, I'm Ian Dewar from VF Corporation, and I'm here to talk about the jacket you didn't know you needed. How we build emotional loyalty at the North Face and Vans. It's important to understand what our starting point is, and the North Face brand purpose is that we dare to lead the world forward through exploration. Our goal is to encourage our customers to get outside, to explore the world, and to learn more while they're doing that. At Vans, our brand purposes is to enable creative expression and inspire youth culture by celebrating and encouraging the off the wall attitude that comes with expressing your true self. The important thing at Vans is uniqueness of expression and creativity. Those are what's most important when Vans thinks about how we connect with our customers. We started the journey towards creating loyalty, we looked at what our customers need. And what our customers need is not a new jacket every six months or new shoes every three months, what our customers need are the products that help them explore the world, express their creativity, and really do what they love doing. Looking backwards at the North Face, this is a picture from 25 years ago of a climber in Nepal wearing a North Face jacket. That's me in Nepal 25 years ago, wearing a North Face jacket. And I still have that jacket today. So when we think about what the next best product for the North Face is, it's not the same jacket in this season's hottest color. It's not new technology that's three ounces lighter. What it is is new products to help our customers do more with what they love doing. This is a tent from that same expedition, 25 year old tent that still works today. This is what our foundation is and this is what our heritage is. And building off it is how we build loyalty, not encouraging our customers to buy new product. On the opposite end of the spectrum, this is my son wearing a pair of Vans skateboarding. Well, scootering at a skateboard park. Same idea of looking at him and looking at what Vans means to him, his friends, the other kids at the skateboard park. That's the foundation of what Vans wants to create. We're not selling new shoes just to sell new shoes. We're selling the opportunity for these kids to do what they love doing. So when we started building loyalty, we looked at how North Face customers shop. They're highly seasonal. About half our business is repeat. Our customers have high satisfaction and the majority identify as active. They have high income, they shop for others, and they're very reactive to weather. So with this foundation in mind, we started to look at what do our customers need to have a better experience? And what do they not know about the North Face that we can do for them? Looking at Vans, we have the same setup. Younger customers, we have a lot of female shoppers. They're less likely to have children and they're more likely to live with their parents, certainly than the North Customers. They shop for Vans in multiple channels. As Vans families starts to craft that emotional connection with our customers, we need to understand what they need and how they want to express their uniqueness and their originality. And how do we provide that? Whether they're still living at home, whether they're young adults, or like me, they're buying for their kids. We build the foundation of emotional loyalty by creating programs that truly allow our customers to express their uniqueness. Coming back to the idea of not selling product just for the sake of selling product, when we think about how we look at our customers next best product, next best purchase, next best item, we really think about what our customers do with it, not what they bought from us. And so in the build out of the North Face Explore Pass program and Van's loyalty, the idea of understanding customers behavior, and not shopping behavior but actually in real life activity behavior, is the most important thing for us. Building a program that allows our customers to express their originality, identify their primary activities, and get rewarded for that is central to both programs. The North Face recently relaunched the Explore Pass program, previously it was called VIPeak rewards, now it's called Explore Pass. And we double down on opportunities for engagement that are outside of just purchasing product. Customers still get points for spending money with the North Face. They get exclusive access to gear. They have dedicated customer service, they have questions, but we also have members only programs for field testing. We have access to first release new products, and we have events that are designed specifically for Explore Pass customers to start with. When we think about how it comes to life, we really wanted to celebrate the activity of being outdoors. whether it's on the web on the left, on mobile in the middle, in store through posters where we offer an incentive to sign up, or in the actual app that allows customers to sign up, earn points and engage with their friends. A close up of the app shows one of our new opportunities for rewarding points, our customers Explore Pass members can check in at a North Face store or check in a national park and receive points for doing that. They can refer a friend and receive points for doing that. They can bring their own bag and help us save the environment, and receive points for doing that. It's more than simply spend X and get Y, it's encouraging our customers to have an exploration- oriented life and reward them for that exploration. Moving to Vans family, we have a lot of those same emotional ideas. Vans family is really about expressing our customers originality and uniqueness. The Vans family members get access to exclusive products, members only experiences, and personalized content, but they also get the opportunity to engage directly with Vans and see all of the new Vans product first. Whether that is Vans storytelling, Vans videos, Vans movies, or new Vans product. We think about the benefits for the customers and Vans family. There's exclusives around sweepstakes, promos, opportunities to engage with the brand. First release like Foo Fighters Vans sold out in one day, and Vans family got the first chance. They can earn points through polls and contests. They can use those points to enter sweepstakes for unique product or just cool Vans merchandise. They can also turn their points into Vans product that they can use to separate themselves and showcase their originality. Stickers, patches, iPhone backgrounds, mugs, lunch boxes, towels, t- shirts, et cetera. All of that allows our Vans family members to get access to product that regular consumers don't have. So we think about how we build that profile. One of the things that makes Vans family truly unique and truly builds the emotional loyalty with our customers is the ability to start with customizing your content. These are all screenshots from the onboarding experience and early start of a Vans family member. The first thing we ask our new members to do is tell us their three favorite interests. Skateboarding, surfing, snowboarding, BMX, music, art, hanging out with friends. And then once we know a little bit more about them, we ask them how often they do their activities they like the most. How good are you on a surfboard? That helps us understand who we're talking to and helps us tailor our content so that we're delivering the right message to the right customers at the right time, and giving members that really unique opportunity to tell us about themselves while giving back to them the type of exclusive access they're looking for. We ask customers how much they know about Vans, again, so we can tailor what we talk to them about. And finally, we ask customers what size shoe they wear. That way we can show them product that's available in their size that line up with the activities and the interests they've told us about. And we can begin that personalized experience from the very first moment when we meet our customers. The core to building emotional loyalty is really getting to know the customer. How do we encourage our customers at the North Face and Vans to get to know us, get to know me, and how do we learn about what they have to offer. Once we understand customers, whether it's through Vans family onboarding or through North Face surveys, or through invitations to events or through their browsing behavior, or through the emails and the other connection touch points they contact us in, we begin to build profiles. So we start to predict what our customers are interested in, and so we can return that type of content to them and show them product either we believe they need to make their experience outdoors or in the skate park, at the beach, better. Or introduce them to new product they didn't even know we made. In the predictive profiling process we have four separate levels of profiling. We build activity models for the North Face, that's hiking, skiing, running. For Vans, that's skating, surfing, music interests, snowboarding. We build product propensity models around key product styles, insulated jackets, MTE shoes for Vans, backpacks for back to school, and then footwear for the North Face. We look at shopping behavior. Is this customer likely to shop in a retail store? Do they shop during a holiday? Are they buying for themselves or are they buying for others? And finally, we look at purchase value models. How sensitive are the customers to price? What's their customer lifetime value? How do we look at how we build this emotional loyalty and build customer lifetime value at the same time, giving us a metric to track against? I'm going to show you some examples of how we use this predictive profiling to bring customer engagement and marketing to life. Starting with the North Face, North Face this past spring launched a new running line, VECTIV. It was designed for runners by runners, for runners who wanted to push their limits but also have a comfortable and supportive shoe. We first launched it with Explore Pass exclusives and custom product that was only available to our Explore Pass members. And then we used running profile models to deliver relevant emails as well as social and digital marketing content to show what the benefit of the product was and how it was used worldwide. At Vans we had a similar thing with our Pro Skate product, looking at Vans family members and interest in skateboarding, we were able to create a campaign that offered Vans family exclusive to a new half cab skateboarding shoe and delivered emails specific to people who had high interest in skateboarding. As well we took it one step further and we looked at skate interest as well as skate frequency, and targeted our best customers on social and other digital media with new skate product and the skate old school shoe. We want our best customers to see our best product first, and to see the product that's most relevant for them. If a customer tells us what they care about, we want to show them that we care about the same thing. Finally, looking at North Face back to school, during a back to school timeframe, we sell a lot of backpacks at the North Face. But we also sell a lot of other product. And so as we look at this separation, just because a lot of people are buying backpacks doesn't mean we don't have customers who are looking for other product. So we created a backpack score. First level of segmentation, is the customer looking for a backpack or is the customer looking for apparel? Second level of segmentation, is the customer interested in urban? Urban style, urban living, or mountain lifestyle? Country living, mountain living? When does the customer buy their packs? In the United States, our schools go back between the first week of August and the second week of September, so we have a five week window of when kids are going back to school and they're buying backpacks to go back to school with as well as apparel. And so we start all of our campaign August 1st, we're too early in some markets and too late in other markets. So looking at when that school starts helps us understand when we should deliver the right content at the right time. And then finally, are people buying for themselves? Do they have children? Do they have young children? Do they have teenagers? Understanding what we know about our customers buying behavior and what they've told us about their family helps us show them the right product at the right time of year. We created a four week rolling campaign for back to school because that's when schools start. We've color- coded it here across four separate weeks, we launched our campaign three to four weeks before school starts. But as you can see here, there's a four week window between when South Central United States goes back to school and when Northeast goes back to school up in the New York, Massachusetts, Vermont main area. That four weeks makes a huge difference in what our customers are buying and in what they're looking for, so why not show the right customers the right product at the right time? Here's some examples of how this came to life. We launched a catalog with a heritage backpack on the cover. We put a 25 year old backpack on the cover of our catalog and asked our customers to trust us that that... If they bought a backpack today, it might last for 25 years. We talked about sustainability and why we want you to buy product once, not over and over again. We showcased how we can repair product to again, make it last even longer. We built a campaign around back to school that really allowed the full use of product and showed all the different ways backpacks and our summer fall apparel could be worn. And then we created a series of segmented campaigns and messages around what we believe the customer was most interested in. Do they live in a city? Do they like hanging out with friends? Are they looking for apparel, fuzzy fleece, comfy boots? Are they going to spend more time outdoors than they are on campus? As we finish from back to school, it's important that we started and ended with that same message, built to last. Our backpacks are designed for our customers no matter where you use it to cover what you need when you need it. Switching gears, I want to talk about how data has helped us coming out of COVID, understanding our customers better and driving that personalized experience that we were talking about. Some key trends in COVID helped us define what was most important coming out, but I don't think it's any surprise that there's been a huge shift in online shopping. As well as I took this screenshot of a New York Times article about buying a bike, get ready for a long wait. Shortages of products around the globe of the kind of products that customers wanted to use while they were at home. We saw a big jump in online shopping and a big jump in customers experience working from home. And we wanted to take advantage of that, but take advantage of that in a way that showed our customers we were here to support them, and that we were really thinking about what they needed. As we started with COVID, we really focused that both brands on deliberate marketing, on talking to our customers directly and being honest, being transparent, and being relatable. North Face focused on how we provided and showcased products customers could use and were looking for while they were working from home. Vans focused on supporting local partners, but also allowing customers and delivering content that made people ready for life at home. We thought about what customers cared about and what they wanted to do. There's a massive uptick in summer hiking, camping, even outdoor exploration up in the mountains, as people got away from their towns and tried to do more in the outdoors. We thought about how we showcased what we cared about, it's important to also talk about what our customers cared about. North Face built a promotional campaign that allowed first responders early access and discounted product so that as they worked to keep people safe from COVID, they also had the right gear if they needed to take a break themselves. Vans created a program called Foot the Bill. Foot the Bill allowed local stores and local Vans partners to build a custom shoe which Vans sold nationwide, and allowed that money and provided that money back to our local partners. This allowed us to support independent shoe retailers all around the United States, skate shops, surf shops, and provide a real lifeline when they were struggling to keep their stores open. We encouraged our customers to get creative, to look at the different locations where they could buy something that helped support their creativity and also helped support our local retailers. We created a coloring book at home for Vans family members who really couldn't get outside. Well, let's bring something fun to you. Finally, we partnered with a number of our sponsored athletes and sponsored artists to create this bouncing off the walls idea in the summer, which again, celebrated and provided ideas of things that our customers could do at home. We sent it directly to Vans family members and then to the rest of the Vans community. Switching over another trend that we saw was adventures closer to home, travel and vacation trends are shifting. Youth options were limited the first summer of COVID and even the second summer of COVID, not everything had come back. So North Face created a summer base camp program, really encouraging our fans and our Explore Pass members to do more at home and teach their kids. Vans created exclusive content which they socialized to Vans family members and to the rest of the Vans community. Here's an example of the adventures close to home, North Face base camp, summer camp. We created a set of videos and tutorials from professional athletes that worked with the North Face, and allowed our first Explore Pass members and then the rest of the North Face community as well to watch these, bring their kids in, do some exciting things in their own backyard without having to send their kids off to camp. Thinking about some of the key learnings and some of the things that we've gone over here with prospective to personalization. One of the things we really believe at VF is that by building a true emotional connection with our customers, we can encourage them to do more with the product we make. We can encourage them to explore more and learn more about our brands. And we can encourage them to be better partners with us, whether that's through Explore Pass or through Vans family. Some ways loyalty data can help, identifying customers across device and across channels, learn what our customers love to you. This is really one of the most important things that we came out of both loyalty programs with is a much better understanding of who our customers are and what they do when they're not shopping with us. This helps us create messaging that resonates with data enrichment. Our goal with creating personalized messaging is to increase the relevance and help our customers explore and learn more about our brands. We can activate our message across customers' preferred channels. And finally, loyalty allows us to measure the impact of our campaigns and better understand what our customers do after they see our content and after they buy our products. I'm going to end with a video from Vans, fans recently launched Roblox. Vans world in the Roblox environment is directly in response to what our customers told us they and their kids love to do. So we thought if you can have Vans and you can skate in the real world, why wouldn't you want to have Vans and skate in a virtual world?
Tim: Great presentation, awesome. Thanks for coming in. All right, I've got a couple questions. Do you have the time?
Ian Dewar: Yeah, absolutely. Let's go.
Tim: Let me just rail through these real quick. What kind of zero party data is really important to collect from consumers to make a better experience or a better loyalty program, or just a better consumer experience with brands?
Ian Dewar: So that's a great question, the use of zero party data is super important to us. Consumer direct behavioral data is very important to us at VF. As I talked about, activity behavior is so important to what product our customers need next. It's more important what our customers do with the product they buy from us than actually what they bought. Do they hike? Do they surf? Do they like running or do they like going to concerts? Getting customers to complete a loyalty profile, a micro survey for points, or progressive profiling is a great way to start our customer understanding and our modeling process to better understand our full customer base.
Tim: In the consumer journey, the customer journey, there are different stages. You've got the awareness stage, the intra stage, maybe they're visiting a store, maybe they're comparing products, they're going to purchase. They're going to use, reuse, recycle, et cetera. A lot of things you mentioned. Which of the customer stages do Vans and the North Face really focus on to get that core intelligence?
Ian Dewar: That's a great question. So part of what's important for us with our loyalty programs is to be able to engage with the customers at all points in the customer journey. So the answer to your question at a start is yes. Yes, they're important, but Vans family and Explore Pass both allow us to begin the conversation with our customers really early in that process. We believe there are key opportunities in interest, search, and compare points that you've noted to begin this personalization process. This is again why behavioral data is so important. We can start personalizing messaging and increasing relevance before the customers even make their first purchase with us. Beyond purchase, we also want to have our customers understand how they use the product, so the post- purchase engagement is equally important. If the customer buys something from us, doesn't use it properly, doesn't like it, they're not coming back. So it's in our absolute best interest to make sure our customers understand our product and use it to explore and express their originality. Happy customers definitely become repeat customers.
Tim: Yeah, you're totally right there. Anybody who's dissatisfied is not going to become another customer, they're going to go somewhere else. So crucial. Let me ask you this. There are a couple different ways you can incent people, different types of offers. You've got your hard benefits, things like discounts, free product, et cetera. And then you've got soft benefits. That could be a special experience, that could be early purchase on a new product that gets launched or something. How do you guys over there at the VF, how do you mix this hard and soft in the design to keep that unique customer experience fresh, and to really foster more loyalty?
Ian Dewar: We really believe the drive for emotional loyalty begins with improving the customer experience. Like I said, in terms of the whole process, we care about getting relevance and getting personal with our customers from the very first time we meet them. And we want to make it easier for our customers to find the product they like, buy new and exciting product, and use it. So overall, when we think about the benefits that Vans family or the North Face Explore Pass members get, we start with the question, how does this improve our customer's experience with our product and with our brand, and their experience outdoors using it? So the combination of experiential benefits, access to early product, invitations to events, ability to meet our sponsored athletes, they're super important. But transactional benefits that make the customer continue to value our brand are equally there. So really there's not a yes or no in terms of your question, we really try to combine the transactional and experiential benefits because both of those continue to drive that emotional loyalty we're looking for.
Tim: Ian, I appreciate you coming in. We did a great session last year. You had a lot of inspirational things for our audience this year. We hope to have you back again. Appreciate it.
Ian Dewar: Tim, thank you very much. Thanks for the invite. And it's always great to talk to you.