Yeti is "the luxury brand in the fragmented outdoor aids industry, with technical leadership, brand awareness and customer loyalty like no other".
Yeti has recently joined the $1 billion club of brands, as a result of the outdoor activity boom driven by the new crown epidemic and the willingness of many people to pay high prices for well-designed, quality outdoor gear such as coolers and mugs from Yeti.
Yeti was founded in 2006 by outdoor enthusiasts. They started the company after becoming frustrated with inexpensive coolers that had handles that broke easily and pins that fell off. The company's sales reached $1.09 billion last year, up 19 per cent from 2019.
Over the years, Austin-based Yeti has been diversifying its product offerings with products such as dog beds, waterproof bags, blankets and lightweight folding chairs, while adding different models of its signature refrigerated insulators, including a stainless steel insulator that costs $800.
Now Yeti is in the midst of its largest ever launch, including a backpack and duffel bag priced at up to $249.99 and two soft-sided luggage models, the most expensive of which retails for a whopping $449.99, adding to its relatively small range of luggage. All this is to maintain the momentum of its growing business. (Yeti will soon launch its first hard-sided luggage.)
While there are already several models in both categories, the company's CEO, Matt Rettgers, said that the duffel bag and luggage are in line with what consumers have come to expect from Yeti, particularly in terms of being able to continue to enjoy the iconic quality and design of Yeti products. He sees the new products as a complement to existing offerings, as many customers engage in a lot of outdoor activities when they travel.
He told Fortune magazine, "You definitely need to take certain things from one place to another and there will definitely be items that you will use once you arrive at your destination." On price, Retjes said, "We're committed to building a premium brand where consumers pay a high price and get sturdy, durable quality and great design."
There is no doubt that Yeti was a beneficiary of the boom in outdoor activities during the new crown epidemic, and the need for alternative recreational activities was even greater for countless Americans after travel was severely restricted. For example, the latest figures from the Sports & Fitness Industry Association (SFA) show that the number of people in the U.S. who have hiked at least once increased by 16.3 percent in 2020, and the number of people who have participated in recreational freshwater fishing increased by 16.6 percent.
In 2020, Yeti found itself missing out on many activities that could drive sales, such as trips to picnics and barbecues. But before the epidemic, the company persisted in its healthy growth, and in large part because it had customers as highly loyal as believers.
In a report released last week, Wall Street firm BTIG said Yeti is "the luxury brand in the fragmented outdoor aids industry, with technical leadership, brand awareness and customer loyalty like no other."
As more of the company's sales shift to its own website and shops, Yeti needs customer loyalty even more. In 2020, Yeti achieved another milestone in addition to being among the billion-dollar brands: for the first time, more than half (53%) of the company's revenue came from its own shops and website or direct marketing (DTC) business. A large part of this comes from its Amazon shop. Yeti is not alone in this shift: from Levi's to Coach to Ralph Lauren, many brands are looking to increase direct sales and reduce their reliance on middlemen to better foster customer loyalty and increase control over the display and distribution of their merchandise.
Yeti's key wholesale partners include Dick's Sporting Goods (15% of its total sales in 2019), Lowe's, REI and Bass Pro Shops. 2020, the company's business The transformation is partly due to the fact that many retail shops were forced to close in the first quarter due to the New Crown epidemic precautions, but Rettgers believes that direct sales will remain a high proportion of total sales even after the epidemic is over. (Five years ago direct sales accounted for only 10 per cent of total sales.)
Retjes says: "We knew when we created this passion-based outdoor brand that consumers wanted to interact with us directly, that they were not only attracted to our merchandise, but also to the brand story we tell." Yeti has turned its products into a cultural phenomenon through novel marketing techniques such as lifestyle catalogues and Spotify song lists by artists such as Leon Bridges, no longer limited to simple refrigerated thermoses or drink holders.
To break the US$2 billion sales mark (so far Yeti says it expects sales to rise by just 15 to 17 per cent this year), suitcases and new-fangled backpacks are far from enough. In fact, Rettgers believes there is a huge market to be tapped, both at home and abroad. He believes Yeti can further enrich its existing products by adding more new elements. For example, the company recently introduced a larger capacity single drink holder and a wider range of colours for existing products for consumers to choose from.
The majority of our sales growth each year has come from our older products," says Rettgers. The fact is that our products are built to last and we will continue to tell the story of those products."