How The North Face is Navigating the COVID-19 Pandemic
Photo courtesy of The North Face
When the COVID-19 pandemic forced the world to stay-at-home, people got restless, to say the least. Luckily, one of the caveats that allowed people to leave their homes was for exercise, which included a multitude of outdoor recreation options.
The demand for outdoor gear was above and beyond any expectation, like when Forrest Gump ran a punt back for a touchdown and just kept running through the endzone and into the locker room. The heightened demand was a godsend for the outdoor industry reeling from the premature closure of ski resorts in March due to the pandemic. It was also a double-edged sword. The unexpected demand left manufacturers scrambling to make sure there was enough product to meet it, and with retail closures, supply chain disruptions, and social distancing at factories, demand became a difficult roadblock.
Photo courtesy of The North Face
Despite being one of the biggest players in the outdoor gear market, The North Face wasn’t immune to the effects of the pandemic. As a global company with operations in countries around the world, The North Face saw the movement of the pandemic in real-time when it began to affect the market in Asia. That’s where the brand first saw interruptions to its supply chain for manufacturing new products. As raw goods began moving eastward from China, to Taiwan, South Korea, and finally Vietnam for finished products, they followed the path that the outbreak of COVID-19 was taking. The factories located in countries where the pandemic was first spreading is where The North Face first saw a slowdown in production.
“Even if factories weren’t fully closing, they were social distancing,” says Scott Mellin, global vice president of mountain sports at The North Face. “Think of a factory operation line that’s seam sealing center back panels [for outerwear]. There are usually 10 operators in there, but because of social distancing, we could only have five operators. So, immediately production goes to 50 percent.”
Photo courtesy of The North Face
In addition, The North Face closed down its retail stores in China and Hong Kong, further impacting revenue. Then, as Asia began to come out of its quarantine, and restrictions lessened, Europe hit its own peak during the pandemic, forcing store closures, followed by the United States.
“It was a rolling thing where certain operations were emerging out of quarantine, other operations were going into quarantine, while you're running a global supply chain and a global network of retail stores.”
“It was a rolling thing where certain operations were emerging out of quarantine, other operations were going into quarantine, while you're running a global supply chain and a global network of retail stores,” notes Mellin.
Due to the lack of in-person shopping, the brand needed to work fast to migrate inventory from its retail stores into its online inventory, because demand for products was through the roof as people started to get outside to curb the physical and mental impacts of stay-at-home orders.
“There were a lot of logistical tentacles in a big global supply chain and a big global retail fleet to make sure that we could satisfy the consumer demand for our product,” describes Mellin. “I don't think anybody necessarily foresaw it, but we had enough intuition to say that when people don't have the opportunity to go to work, they're locked up at home, their life is completely digitized through Zoom and Google Meet, that there's going to be an appetite to get outside.”
Photo courtesy of The North Face
Whether people were hiking, trail running, or simply setting up a tent in the backyard, the business was booming. With the pent up demand to head outside and congregate with others in relatively safe spaces, the brand, as a whole, concluded that it was not going to take as big of a financial hit as anticipated. Mellin admits that the liquidity of The North Face’s parent company, VF Corp, assisted greatly in helping them ride out the storm, but is proud that it was able to avoid layoffs and continue to empower its employees to innovate on the product side.
“We didn't have the pressures of having to furlough or layoff people,” says Mellin. “We could ride it out and make sure that the investments that we made in people would be intact as we came out of the quarantine.”
Photo courtesy of The North Face
While the spike in sales of summer gear has been encouraging, Mellin is cautiously optimistic about the upcoming winter. He believes that for brands that are purely snow-specific, it’ll be a tough few months because of the uncertainty associated with the operations of ski resorts. In turn, The North Face tempered its investment in snow.
“We didn't make a giant investment in the snow business for this year, just with all the dynamics of ski resort closures back in March, countries closing resort operations, the state of Colorado closing resort operations, we didn't take a bullish outlook on the snow season going into 2021,” describes Mellin. “We’re in a pretty good position from an inventory perspective. But, my heart goes out to brands that are fully committed to snow only. And if we can't have a normal operating system, it's gonna be tough on the industry.”
Photo courtesy of The North Face
Mellin does see the demand for backcountry skiing continuing to hold strong, as skiers look for any way to slide on the snow, regardless of the status of ski resorts. Theoretically, this would set The North Face up for success given its range of products catering to backcountry skiers and snowboarders, particularly its FUTURELIGHT fabric, which is completely waterproof and air permeable to provide top-notch breathability and protection from the elements.
Photo courtesy of The North Face
“It's people naturally hedging, they want to make sure that they can go slide around on snow; they may not have any experience or any mechanism to actually venture beyond the boundaries of the ski resort,” says Mellin. “Our hope is that, like last spring, even if the resort can’t operate the lifts or the lodges, Aspen still groomed the hills and created this really safe space for people to skin and ski, which was a lovely gesture to the community.”
Furthermore, Mellin is encouraged by the influx of digital backcountry education tools being disseminated throughout the skiing community. “I'm encouraged by the way that the industry, including avalanche forecasters, guide services, and brands in the space, have really stepped up to help people understand all the dimensions that they're going to need to safely travel in the backcountry.”
Photo courtesy of The North Face
Regardless of the outcome of the winter, Mellin has seen positive changes to certain processes in place for the business. Consumer strategy has shifted even further digitally, with direct-to-consumer options becoming a must-have for any business during the pandemic. In addition, because traditional go-to-market practices like trade shows and sales meetings have also gone virtual, it’s created more efficient workflows for the brand. For example, a jacket that’s going to be shown at a sales meeting and a trade show, and then put on the website for sale, only needs to be photographed once, rather than multiple times for different avenues.
“We're building fewer sets of samples, we have fewer rounds of photography of products, we're able to utilize all of that creative product much more efficiently.”
“That’s actually a positive outcome, because it's super-efficient,” says Mellin. “We're building fewer sets of samples, we have fewer rounds of photography of products, we're able to utilize all of that creative product much more efficiently. You know, it really hasn't slowed our innovation pipeline on principle, either.”
Photo courtesy of The North Face
As far as research and development, as well as product testing, Mellin and The North Face have been able to seamlessly transition built relationships with suppliers around the world into the digital space.
“Those relationships make it quite easy to work through WhatsApp, Zoom, or email to get those prototypes built, to get them into a lab for proper testing, to get them on to the athletes for physical tests and field testing. It hasn't really slowed us.”
“Those relationships make it quite easy to work through WhatsApp, Zoom, or email to get those prototypes built, to get them into a lab for proper testing, to get them on to the athletes for physical tests and field testing."
While product strategies have benefited from increased efficiencies, the pandemic has also helped The North Face evaluate its product marketing. The brand was able to truly read the room, and instead of focusing heavily on product marketing to its consumers, it instead chose to help inspire people stuck at home to get outside.
“It started with the athlete team back during the initial days of the lockdown,” says Mellin. “We wanted to creatively showcase our team's passion for sport and hopefully create inspiration within the community by having our team just recreate locally and explore their backyard.”
As the social talking points in the country began to mount, Mellin says they were consistently able to respond in an authentic matter, focusing on social responsibility rather than true marketing. It’s led to the brand’s most recent initiative, called Reset, in which it relied upon its athletes to help encourage people to hit the reset button after so many months of the pandemic - to use it as a tool to improve something about someone’s life.
“We all personally need a little bit of a reset after being home for nine or ten months and having a lot of behavioral habits, good or bad...pushing reset is a good thing.”
“We all personally need a little bit of a reset after being home for nine or ten months and having a lot of behavioral habits, good or bad, and pushing reset is a good thing,” describes Mellin.
“We can all reset ourselves. There’s something we can all change to make us a better person.”
Photo courtesy of The North Face
The pandemic has forced the collective snowsports industry to reflect and pivot to new strategies and processes. And while not every brand is in as strong of a position as The North Face, brands can all learn something from the way it took everything in stride and made decisions based on current situations to ensure it met the demand of a growing populace of outdoor consumers, while sticking true to the ideals it holds dear as a company.
