Has North Face reached a summit in consumer segmentation?

Discussion
Source: The North Face investor presentation – "Our Consumer Territory Model"
Apr 28, 2017
Tom Ryan

To enhance segmentation efforts, The North Face last year introduced a new “consumer territory model” strategy to define the many ways consumers are experiencing its brand.

“Our tag line, ‘Never Stop Exploring,’ manifests itself across many different dimensions in our consumers’ lives, not just the physical one, as they’re exploring the mountains, but also as they’re doing their everyday training or when they are living their lives day-in day-out,” said Arne Arens, general manager Americas, North Face, in late March at the annual investor meeting of VF Corp., the brand’s parent. “Now, regardless of the occasion, our brand has a right to play.”

North Face came up with four consumer territories:

  • Mountain Sport: The brand’s largest and traditional business of equipping athletes to tackle outdoor adventures, whether mountaineering, climbing, hiking, snowboarding or skiing.
  • Mountain Athletics: Addresses the training needs of athletes, including those prepping for outdoor feats, and includes running, training and fitness-oriented apparel and footwear.
  • Mountain Lifestyle: Addresses “pre and post activity adventures” and a more youthful consumer.
  • Urban Exploration: While the brand gained its foothold as the “original urban outerwear brand” in the eighties, North Face’s “mountain” values — protection, performance-driven lifestyle and exploration — are “also very relevant in the city.”

Each of the territories are backed by distinct design teams which will create messaging and outreach programs tailored to their respective consumers.

Beyond its bigger stores, North Face will open smaller boutiques to address Urban Exploration or Mountain Athletics consumers in a “very local, curated and personal way,” said Mr. Arens

At wholesale, success with Mountain Athletics and Mountain Lifestyles is expected to encourage traditional retailers to carry the brand year round rather than largely during cold months. Advances made in the Mountain Sports and Mountain Athletics territories could open up greater opportunities for the brand at athletic specialty and sporting goods stores while Mountain Lifestyle and Urban Exploration could open a path to the much larger lifestyle distribution channel.

Said Mr. Arens, “Through these segmentation efforts, we will build a differentiated consumer experience across channels and across tiers, maximizing revenues but also assuring a premium positioning across the entire spectrum of distribution.”

DISCUSSION QUESTIONS: What advice would you have for lifestyle brands and the retailers working with customer segmentation approaches? What are some common missteps in such schemes?

Braintrust
"Occasionally brands get so carried away with brand stuff that they lose sight of executing in a way that delivers meaningful business results."
"This type of lifestyle segmentation is very “VF” — they’ve taken this approach for years so it’s only natural..."
"The biggest risk or challenge is to make sure you don’t exclude too many consumers that don’t fit well into one of your chosen segments."

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9 Comments on "Has North Face reached a summit in consumer segmentation?"

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Mark Ryski
BrainTrust

Segmentation, targeting, refining messages … all marketing 101. North Face’s approach seems logical and thoughtful, but it’s not particularly revolutionary. While this work is important and necessary, occasionally brands get so carried away and myopic about brand stuff that they lose sight of executing in a way that delivers meaningful business results.

Carol Spieckerman
BrainTrust

This type of lifestyle segmentation is very “VF” — they’ve taken this approach for years so it’s only natural that the strategy is being applied to North Face. What is different, and I think quite relevant, is the way North Face is breaking out some of the segments and parlaying them to build localized brick-and-mortar propositions. Just as with the “athleisure” movement in women’s, the outdoor segment is also splintering into multiple sub-movements that ideally address how and when people really wear certain looks. Head-to-toe, mono-brand outfits are a thing of the past so North Face would be smart to present mix-and-match looks, even if they incorporate other brands.

Ken Morris
BrainTrust

Understanding your customer personas and segments has always been an important way for retailers to adjust their products and marketing mix to appeal to their key customer groups. The key to successful market segmentation is to ensure you truly understand what drives each group’s purchase decision; their journey, if you will, and what will appeal to their personalities and how they view the purpose of the product based on their lifestyle.

The biggest risk or challenge is to make sure you don’t exclude too many consumers that don’t fit well into one of your chosen segments. You can slice and dice until the segment is way to narrow.

Martin Mehalchin
BrainTrust

This makes a ton of sense in digital. However, the smaller boutiques will likely fail. Consumers get confused when brands build retail locations around a narrow slice of their assortment.

Peter Charness
BrainTrust

You think they’ll still sell winter wear to the to the average consumer? Hope there’s space left in the stores that carry their “regular” product. Betting there’s a big existing segment that isn’t particularly interested in mountains, or urban exploration, but just wants to stay warm. Targeted segmentation is of course a good thing, as long as regular loyal customers don’t slip through the cracks.

Craig Sundstrom
Guest

A danger, I would think, is that with teams working independently, the overall message of the brand might suffer … or even get lost altogether. Also there’s often — or usually — a problem when one tries to pigeonhole people into neat little categories. Just because everyone in, say, a “mountain climbing” group shares that interest, it doesn’t mean they share the same age or income or politics or a host of other factors that someone might try to appeal to if they’re looking at the group in an overly simplistic way.

Jeff Miller
BrainTrust

This does not look to be anything revolutionary and probably more of a re-segmentation hopefully based on some real data. The most obvious mis-step is that by placing people in a certain bucket you limit the interaction with your brand. I may be both urban exploration during the week and mountain sport during the weekend or perhaps with a brand like North Face seasonally. VF knows what they are doing in this space so I don’t see them making that mistake, but other less sophisticated brands could see some negatives from an exercise like this.

Doug Garnett
BrainTrust

To answer the headline question takes two answers.

North Face has done an excellent job developing a better understanding of the subtleties of the people who buy they product. They deserve kudos for that.

BUT — the real question is: Does obsessive-targeting those segments with this type of investment represent their best way forward? I don’t think so.

We first have to come to grips that these four segmentations don’t describe 100% of the people who buy North Face product. They’d be lucky if these four segments describe 60% of the people who purchase.

And that’s where obsessive targeting can break down — because it can drive products and advertising that alienate the 40% of the market who don’t fit into these categories.

It’s a serious risk — and realistic to say, for example, that this mistake is why Burger King lost their place as the #2 fast food chain.

I’d hope North Face management enjoys the insight from this target analysis … then remembers that many people outside their targets buy their products.

Scott Magids
BrainTrust
3 months 22 days ago

North Face’s customer base ranges from those who are actually climbing Everest, to those who watch the movie “Everest” on Netflix, but still want the look. This type of segmentation makes sense, especially in an environment where big data informs retailers more about the specifics of who wants to buy which product categories, and what those buyers’ primary motivators may be. It’s very logical to divide the categories in this way. While the Mountain Athletics and Mountain Sport segments provide very specific items that are required to accomplish rigorous goals, the Mountain Lifestyle and Urban Exploration segments are more responding to an emotional need of those who may not be engaging in those types of rigorous adventuring, but nonetheless want to feel like they are capable of doing so.

wpDiscuz
Braintrust
"Occasionally brands get so carried away with brand stuff that they lose sight of executing in a way that delivers meaningful business results."
"This type of lifestyle segmentation is very “VF” — they’ve taken this approach for years so it’s only natural..."
"The biggest risk or challenge is to make sure you don’t exclude too many consumers that don’t fit well into one of your chosen segments."

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