How brands sell cultural myths
Editor’s note: This story was originally published on August 30, 2017 in Inside Retail Weekly.
Despite closing several bricks-and-mortar stores in the UK last year, Kathmandu remains confident of its potential for international growth. The outdoor apparel and equipment brand has ramped up its presence at European trade shows and reached agreements to trial products in two major sporting chains, GO Outdoors in the UK and SportScheck in Germany.
Kathmandu clothing, including down and fleece jackets, and backpacks are already available online at SportScheck, the largest sports retailer in Germany and part of the Otto Group, one of the biggest e-commerce companies in the world. Similar products will appear on the GO Outdoors website in the next few weeks. The trials have been timed to coincide with the Northern Hemisphere winter.
“It’s part of our ‘capital lite’ strategy. It’s public knowledge that we’ve reviewed [the physical store] model [in the UK] and gone for a more blended model, where we’re selling through wholesale partnerships,” explains Paul Stern, Kathmandu’s general manager of marketing.
“We’re taking a cautious approach in key markets like the UK, where we’ve already built brand awareness, and Germany, which is the largest outdoor market in Europe.”
“It’s very early days. International still makes up a relatively small part of our business at this stage, but the opportunity is significant,” he adds.
The reason Stern and his colleagues remain optimistic about international growth has as much to do with Kathmandu’s product offering as its country of origin. It was founded in New Zealand and still has a head office in Christchurch, as well as one in Melbourne, Australia.
“We’ve tested the brand with focus groups and one of the things that resonates strongly is our New Zealand heritage,” Stern says.
“When Europeans or people in the UK think about New Zealand, they think of exciting outdoor destinations and different weather conditions and terrain. They have very positive feelings about New Zealand and New Zealanders.”
These associations are formed not only by pop culture such as Lord of the Rings, but also by personal experience. In the 12 months to July 2017, over 113,000 people from the UK and over 77,500 people from Germany visited New Zealand, according to the country’s tourism board. They are the fourth and fifth biggest tourism markets for the island nation, after Australia, China and the US.
Stern believes this interest in New Zealand the country will transfer to Kathmandu the brand.
“You’ve got The North Face, Patagonia and Columbia with a North American heritage, but there’s not really an outdoor and travel brand like Kathmandu that’s got its roots in Australia and New Zealand competing globally. We certainly think there’s opportunity there,” he says.
The culture of globalisation
It’s something of a paradox that in today’s globalised world, where international brands often outsource manufacturing to the same factories in China and people of every background engage on the same social media platforms, foreign brands still hold an inexplicable allure.
Douglas Holt, John Quelch and Ear L. Taylor refer to the concept of ‘cultural myths’ in their September 2004 article in the Harvard Business Review titled How global brands compete.
“Consumers look to global brands as symbols of cultural ideals. They use brands to create an imagined global identity that they share with like-minded people,” the authors write, going on to quote an unnamed Costa Rican consumer, who points to the aspirational quality of global brands: ‘Local brands show what we are; global brands show what we want to be.’
Speaking to IRW, Pippa Kulmar, a senior strategist at Retail Oasis, describes the decision to focus on a brand’s country of origin as a clever tactic in a highly competitive market like retail.
“There’s no way to create a truly competitive advantage anymore, everyone catches up so quickly. And often consumers aren’t interested in the thing that you’re really good at. It doesn’t matter if your rain jacket is more rainproof than any other, that’s not why they’re buying it, they’re buying what it means,” she explains, citing Apple as one example of this.
“When you buy an Apple product, you’re buying what it means to be an Apple consumer – creativity or Steve Jobs.”
According to Kulmar, brands can and often do trade on the appeal of their home market, even if the products are actually made elsewhere. Kathmandu manufactures some of its products in New Zealand, but most of its wet weather gear is made in China.
“Louis Vuitton does this. Even though most of its bags aren’t made in Paris, it’s selling its French-ness. How else could you possibly justify paying $600 for a canvas bag? They’re selling ‘otherness’, the romance of that place to create intrigue and desire,” Kulmar says.
While certain places in the world have developed a reputation for producing certain products over decades or centuries – think chocolate and Switzerland, clothing and Italy, technology and Japan – new pairings enter the cultural zeitgeist from time to time. Korean beauty products are having a major moment right now. Is New Zealand outdoor gear the next phenomenon?
More than just heritage
Frank Spiewack, vice president of global sales and marketing at Alchemy Equipment, a small Christchurch-based outdoor apparel retailer, confirms that European customers, especially those in Germany, Austria and Switzerland, are “very keen” on New Zealand brands.
“New Zealand is this mythical country on the other end of the world. It embodies this ideal of an outdoor healthy lifestyle. It’s a very strong brand in itself and that gets transferred to the products as well,” he tells IRW. Spiewack has also worked at outdoor clothing brand Macpac.
However, Alchemy Equipment only emphasises its Kiwi heritage to a certain extent, focusing more on its fashion-forward aesthetic.
“Normally, New Zealand gear is all about functionality and durability, but our product design is more international. We’re not what customers expect,” Spiewack says.
As a result, the company is targeting high-end ski resort stores in Germany, Austria and Switzerland and boutiques in Italy, France, Belgium and the Netherlands, rather than the midmarket chains that Kathmandu has partnered with. And Spiewack cautions that Kathmandu could find it difficult to differentiate its products.
“There’s no shortage of products in the European market and retailers can already buy similar products from other brands. Their only point of difference is to play the New Zealand card strongly and use that to position themselves,” he says.
But Stern says Kathmandu won’t just focus on its brand heritage.
“Our point of difference is not purely about being a New Zealand brand. Another factor we’ve invested a lot in is sustainability. Products that are perceived as sustainability are well received in the German market in particular. We’re paying a lot of attention to where we’re sourcing materials and what materials we use,” he says.
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