Dynamic Marketing Communiqué

Nanotechnology, AR, and Customization: The secret to staying relevant? Be where your consumers are, know what they want! [Monday Marketing Marvels]

January 17, 2021

The digital age is changing the way we do business.

Internet.

Social media.

Breakthrough technologies.

These things have led businesses to reinvent their products, services, and consumer experiences.

The digital transformation even caused other businesses to automate, streamline, and invest in machine learning and artificial intelligence (AI).

It has ushered in a new era of leadership and innovative business models.

Speaking of digital transformation…

Let’s see what this company is doing to reinvent retail amid the changing business landscape!

V.F. Corporation (VF) is an American apparel and footwear company headquartered in Denver, Colorado.

Founded in 1899, it is one of the world’s largest companies that connects consumers to different lifestyles, activities, and experiences through its family of outdoor, active, and workwear brands.

The company owns more than 30 iconic brands, which are categorized into 3 segments:

  1. Outdoor Segment

    Ready for some outdoor adventure?

    This segment showcases VF’s group of authentic, outdoor-based lifestyle brands with product offerings under the performance-based apparel, footwear, and equipment category.

    These brands are:

    • The North Face (the largest brand in the outdoor segment)

    • Timberland

    • Icebreaker

    • Smartwool

    • Altra

    Surely, some of these brands ring a bell to you!

  2. Active Segment

    Ready… Set… Go!

    The active segment comprises VF’s activity-based lifestyle brands that include apparel, footwear, and accessories.

    Brands under this segment are:

    • Vans

    • Kipling

    • Napapijri

    • Eastpak

    • JanSport

    • Eagle Creek

    As stated in VF’s website, these brands are more than just “active” labels that symbolize the youth culture’s vigor and vitality. They also connect people across the globe to the activities and experiences they cherish the most.

  3. Work Segment

    Going out for work or a casual getaway?

    VF’s got you covered!

    This segment consists of the company’s work and work-inspired lifestyle apparel and footwear products.

    There are only 2 brands under this segment, namely: Dickies and Timberland PRO.

    The brands’ work-inspired, casual-use products aim to provide consumers with comfort, durability, and performance.

So… in the digital era, how does VF reinvent its business operations to cater to the current trends and demands of consumers?

Through purpose-led designs and sustainable innovation!

One manifestation of this transformation is seen in VF’s new Axtell Soho retail space in London.

The six-storey building opened in 2019 to showcase how the company is using technology to improve its portfolio, while bringing the stories of its brands to life in new and immersive ways.

Another interesting thing about the Axtell Soho building?

It has custom video walls and cinematic sounds, making it easier for customers and visitors to immerse themselves in each of VF’s brand identities!

Here are of some of the things that you can see in the company’s new retail space:

  • Timberland’s Living Walls

    Even if it’s inside the building, Timberland’s space exudes passion for outdoor adventures and nature.

    Its walls have its own irrigation system, giving its wall plants a vibrant green color.

    Such a perfect place to feel at ease while looking for some outdoor apparel and footwear!

  • The North Face (TNF)’s New Nano-spinning Technology
  • The brand is leading the future of outdoor apparel with its FutureLight technology!

    FutureLight is a nano-spinning technology that adds air permeability to TNF’s waterproof clothing, resulting in an ultra-thin, nimble garment that:

    Feels comfortable
    Provides protection against harmful elements in harsh outdoor environments
    Enables movement without constraints

    These products allow the person wearing them to generate heat while dissipating moisture from his or her clothes.

    Perfect for those who love to hike, trek, ski, etc.!

  • Vans’ Customisation Requests
  • Characters. Celebrities. Flowers. Eccentric patterns or shapes.

    Just state your preferred design and Vans will customize the shoes for you!

    The iconic shoe brand has started accepting customization requests in 2019 to shape future product trends in the shoe industry.

    It’s also an avenue for Vans to identify what is “hot” among its target market―the more its shoe designs appeal to consumers, the higher the chance that they will buy the product.

  • Avatar-based Virtual Mannequins
  • VF makes sure that potential business partners and customers who visit its Axtell Soho space enjoy the experience.

    One of the ways the company does that is by setting up avatar-based virtual mannequins in its building!

    Through the mannequins, different VF brands are able to showcase their key seasonal looks in 3D.

    Consumer interaction is also encouraged. Users can use the touchscreen displays to change the room lighting and visualize the products in different scenarios.

As stated by VF’s Chief Digital Officer, Viela Carboni:

“The big opportunity we have is how we focus on creating more dynamic, relevant, contextual experiences for our consumers and how we do that in a much more unified way.”

For VF, it doesn’t matter whether a customer goes into its physical stores or online; its focus is serving the needs of consumers in the best way they can and leveraging technology to make the process easier.

In the past five years, V.F. Corporation has recorded revenues of:

  • USD 12.7 billion in 2015
  • USD 12.1 billion in 2016
  • USD 12.2 billion in 2018
  • USD 10.3 billion in 2019
  • USD 10.5 billion in 2020

There’s a reason why VF is known as one of the world’s largest footwear and apparel companies―how it reinvents its operations to stay relevant in the changing business landscape is just one reason why.

V.F. Corporation’s Earning Power: Valens Research vs. As-reported numbers

V.F. Corporation (VFC) makes for a great case study that we come back to regularly. One great reason?

The company has proven itself to be a better earning power generator than investors might think.

So, how well has VFC been growing its business in the past years?

The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.

The blue bars in the chart above represent V.F. Corporation’s earning power (Uniform Return On Assets). V.F. Corporation has seen fairly consistent and robust profitability. Its Uniform ROA ranged from 15% to 28% in the past sixteen years, or an average of 22%. Uniform ROA is at 20% in 2020.

The global ROA is just 6%.

The orange bars are the company’s as-reported financial information. If you relied on these numbers, you will see a company with understated profitability. As-reported ROA (return on assets, a measure of earning power) only ranged from 8% to 11% in the past fifteen years. Its ROA in 2020 was only at 8%, far lower than its Uniform ROA in 2020.

That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.

The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.

The numbers show that V.F. Corporation has been doing well and making a profit.

VF is shaping its organizations to match a digital world where people go to various online channels to spend their time and money.

The company is seeing it in a good light, stating that “digital” is the next stop in the journey of how people consume content.

“The goal of marketing has always been to go where your target group is to tell your message. If today, our consumers are no longer watching TV and spending all their free time in digital environments, we need to be there with our message. That’s the shift we have to make.” – Jan Van Mossevelde, VF’s Vice President of Strategy

About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”

Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.

…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.

The true ROI in marketing can’t be separated from the business as a whole.

What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?

At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.

Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.

However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).

By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.

We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.

Hope you found this week’s marketing marvel interesting and helpful.

Stay tuned for next week’s Monday Marketing Marvels!

Cheers,

Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com