Herschel Supply has it in the bag
October 25, 2013 | Kerry Gold | Comments
In just four years, Herschel Supply Co. has gone from startup to global brand thanks to the marketing savvy of two brothers with an appreciation for what it takes to be cool
It’s not hard to spot a Herschel bag. Just look around for a hipster and you’ll see one hanging off the bony, plaid-clad shoulders of one of those harbingers of cool and lovers of all things old-world traditional—think handlebar moustaches, bow ties, fedoras and unicycles.
No hipster can resist the Herschel Little America, a solid backpack constructed from canvas with leather straps and a big drawstring pouch—a bag that conjures up images of boy scouts and private school students.
Lyndon and Jamie Cormack weren’t entirely new to the fashion retail business when they decided to found Herschel Supply Co. The Vancouver-based duo spent years as sales reps in lifestyle fashion—Lyndon at Vans, Jamie at K2 Sports—before they launched their company in 2009. Today, Herschel has not only been a success story in terms of numbers, but has achieved the kind of coveted youth-brand identity that can only be accomplished with a keen understanding of its consumer. And what really nailed Herschel’s success is that the retro boy scout/private school chic has worked on moms and kids too, securing it broader appeal and making it a hit with the back-to-school crowd as well. In the words of Herschel global marketing director, Mikey Scott, “They launched a brand instead of a product.”
The Herschel story started with a few questions. What did their target consumers want in a bag? And where would they go to buy it? The brothers had the answers; in less than four years, the bag has turned into a worldwide phenomenon. Sales soared 900% in the first year and the brothers quit their day jobs. As revenue climbed the growth rate tapered, but still expanded at an enviable pace of 350% and 60% growth in the following two years. Today, Herschel does a multi-million-dollar sales volume (the company declines to be more precise) and its merchandise is featured in 5,000 stores.
The brothers, both in their 30s, believed their target consumer was intolerant of mediocre factory workmanship, condescending old-world advertising and generic marketing to the masses. Instead, the brothers Cormack focused on the details and took an integrative approach, aligning their brand with other iconic brands they grew up admiring, like Stussy and New Balance—brands that spoke to their demographic.
The starting point was to offer an alternative to the ubiquitous gym bag. “We found that every single bag was very much about sports, and pigeon-holed the customer,” says Lyndon. “We decided that ‘utilitarian nostalgic, but really modernized’ was where we wanted to go. Although fashion had gone there, and footwear had definitely gone there, and other categories had gone there, we didn’t feel the bag market had gone there. It just somehow got neglected in the whole stream of things.”
The Herschel is thoroughly modern. It’s lined with a paisley or pinstripe fabric and contains a fleece-lined compartment for a laptop, most suitably a MacBook Air. It is both nostalgic and urban and, it turns out, it was just what the world was waiting for. A year ago, the brothers got a phone call and scored the ultimate prize: Herschel now has eight exclusive products that appear in every Apple Store around the world.
On a summer afternoon, Jamie and Lyndon are seated inside the latter’s spacious office. Dressed in jeans and running shoes, sockless, half seated, half sunk into a couch, they’ve got the vibe of West Coast skateboarders. But when talking business, they speed talk as if they’ve got a flight to catch. On the floor against a wall is a long row of pairs of shoes—a new venture for the brothers.
In four years, they’ve gone from eight to 36 staff members. They outgrew their first space and have almost outgrown the current 7,500-sq.-ft. former factory in Vancouver’s Railtown, which includes a massive photo studio for product shots, with in-house photographer.
“We both had great jobs, but this is something we wanted to do,” says Jamie, the younger brother. “We get brands. We get branding. We get the appropriate, necessary steps to get somewhere with a brand. But having to do that-—to reverse engineer that final product to uphold the brand story, and all the intricacies that work with that—was way more work and way more challenging than we ever would have expected in our lives. But turning it into a reality was the coolest thing about this experience.” The brand’s name plays on the nostalgia factor, with a nod to Herschel, Sask., where their grandfather was raised.
Their strategy, to infuse an old style with a new esthetic, is similar to the way the Filson or Canada Goose brands have gained popularity. But Filson and Canada Goose were long-established niche brands before gaining mass acceptance. Herschel’s Little America, its most popular bag, is just a pup even though it looks like it’s been kicking around for 100 years.
They knew that positioning was key. From the get-go, trade shows played a huge role in helping them gain exposure to the right retailers. The team travelled relentlessly to shows in Asia, Europe and the U.S. especially, obsessing over minute details. “You have to have more than just a cool backpack,” Scott explains. “You’ve got to show up properly. When we go into a trade show, we don’t just put our backpacks on a shelf. We spend eight or nine hours blowing up bags to make them look perfect. We tie the straps, put the zipper pulls all facing to the right. We make sure it’s a great-looking product.”
Today, Herschel bags—there are now more than 700 of them, and three distinct product lines—are found in high-profile stores, including Colette in Paris, Selfridges and Dover St. Market in the U.K., American Rag, Urban Outfitters and Nordstrom in the U.S., Harvey Nichols and Lane Crawford in Hong Kong, Beans, United Arrows and Journal Standard in Japan, and Little Burgundy in Canada, to name a few.
They create specific product for specific retailers, says Scott. They choose brand partnerships that are unique, that make sense to both brands. And they are loyal; they’ve collaborated with surf fashion company Stüssy eight times, using Stüssy fabric patterns in their bags, and even the well-known graffiti-style Stüssy font for the Herschel logo.
As for those new shoes, the Herschel look has been incorporated into New Balance kicks, and they created matching bags with a clever compartment to store the shoes. Their New Balance shoe launched in the spring and is a top seller. They collaborated with those companies because they grew up with their brands and understand their esthetic, says Scott.
“If someone contacts us, we look at it as a team and we see if it makes sense,” says Scott. “But we’ve said ‘no’ a lot more than we’ve said ‘yes’ to a partnership,” he adds. “And we have picked the right partners.”
If the Cormacks have created a cool brand, it’s because they’ve been extremely choosy in their level of exposure. They’ve pinpointed micro-markets instead of marketing in a wide sweep. They also maintain a highly engaged online user base with constant updates.
“They have great marketing minds,” says Scott. “They don’t place a bunch of ads in magazines and say, ‘There you go.’ We have done strategic advertising in trade magazines, strategic online buys and partnering with individuals, and we’ve played with social media and focused on that engagement—not in super-high numbers with millions of followers. We focus on doing more with less.”
As an example of their micro-strategy, Herschel has regularly exhibited at Agenda, a huge American streetwear trade show held in Las Vegas, New York and Long Beach. They’ve also advertised in the show’s guide and magazine twice a year for the last four years, securing the back cover.
They can occupy everything from niche, appearing weekly on Hypebeast.com, a top street fashion and culture blog, to mainstream, appearing in GQ magazine, with their Novel duffle bag voted one of the top items of 2012.
Without the help of an agency, they’ve placed seasonal ads in magazines in Japan, Hong Kong, Italy, France, Australia and North America. Online, they’ve placed ads in blogs and on Facebook, where they have 90,000 followers and a 3.2% rate of being shared (virality), compared to their direct competitors’ rate of .30%. They’ve got 125,000 followers on Instagram, the same on Vimeo, and 6,000 followers of their customer service channel on Twitter. The numbers aren’t huge, but that’s also the point.
The challenge will be maintaining the illusion of a niche brand with that elusive “cool” label while enjoying mainstream appeal. The company’s hundreds of bags and three product lines are suited to varying price points, sold through the appropriate retailers, from budget price to high end. To avoid turning off consumers, they are still choosing those retailers wisely.
“We are going after a consumer that marches to the beat of their own drum, who doesn’t want to be cookie cutter to everybody else,” says Lyndon. “Certainly, they follow trends and fashion, but they put their own take on it.”
Basically, says Jamie, their marketing approach is a lot like the way they immersed themselves in various subcultures when they were kids. Stumbling upon something new on their own was way more interesting than being told what to like. In the world of cool, autonomy is key.
“It’s the word ‘organic’ that we use, that sense of discovery—people being able to hear about something and going out there and finding out about it. For kids, obviously, it’s a little bit of a drive-through world. They are overwhelmed with information all the time so that they almost lose their sense of discovery and going out and trying to find and research a brand. They have everything now.”
For Herschel, says Lyndon, the key has been avoiding mass advertising and concentrating on ways to let their target consumer feel like they’ve discovered the brand on their own. And when they do, it turns out they think it’s pretty cool.