ORLANDO, FL. — When outgoing CEO Jerome Griffith joined Lands’ End in 2017, the brand had a big problem: “the database for our core customer was shrinking.”
That’s bad news for any company, but Lands’ End has historically received long lifetime value out of its shoppers. A Lands’ End customer stays with the company for 18 years on average, according to Griffith, so building back up its customer base became a priority.
“If your customer gets a year older every year, they’re all going to die, so you don’t want that to happen,” Griffith said at the ICR conference on Tuesday. “You want your database to either stay the same age or bring in younger people.”
The company tried, at one point, to bring in millennial shoppers, but switched its approach when that didn’t work. The Lands’ End shopper is generally mid-50s, so Griffith said it made more sense to appeal to the Gen X shopper than try to go too young. That’s part of the reason the brand has partnered with the likes of Amazon, Target and Kohl’s.
“We’ve seen pressure from how you acquire customers online: It’s not getting any cheaper."
CEO Designate, Lands' End
“These new customers come in through these marketplaces: 75% of them either never shopped at Lands’ End or are lapsed customers and haven't shopped at Lands’ End for five years,” Griffith said. “So we're bringing in a new customer, but it’s actually the same customer, but 10 years younger.”
Andrew McLean, who was named CEO-designate in September, will continue that mission to grow the Lands’ End customer base as the brand’s new leader. McLean has been working alongside Griffith, who retires Jan. 27, since November.
“We've seen pressure from how you acquire customers online: It's not getting any cheaper,” McLean said at the conference. “So we've got to look at new avenues to acquire customers, whether we pull them out of our outfitters business, or whether we're pulling them out of our stores business, or we use the catalog to prospect again … we've got to continue to renew the database. And we've been incredibly successful with that and I'm happy to say that I'm just astonished to have 7 million customers, and be able to build that.”
Physical stores is also one of McLean’s priorities for the future, but the timing on that is uncertain, since the brand can only tackle so many things at once. McLean also highlighted that Lands’ End already has a physical channel in its catalog business, which is “an amazing physical manifestation of our brand.”
“I think Jerome and the team have done an amazing job to convert us to a digitally native company. But the catalog is still a huge outreach for us and it’s a physical opportunity for us that many others have walked away from,” McLean said.
Not as exciting, but still on the roadmap, is to “do something about our debt in the next couple of years,” according to McLean. In the company’s third quarter, long-term debt stood at $226 million.
What’s not changing, at least for the most part, is Lands’ End’s other management. McLean said the company is changing its merchandising leadership, with a new merchant joining in February, but that otherwise “we feel good about our team.”
“You shouldn't change everything in the first moment,” McLean said. “We’ve blended the organization with some new people and we’ve really elevated and retained a number of the existing. I think the balance we've got to the organization is really powerful.”