Lands’ End has been well placed to respond as its customers moved online in search of comfortable clothing over the last year of pandemic. When Covid-19 hit, the retail brand reacted quickly, says Constanze Freienstein, managing director, Europe, at Lands’ End Europe.
Mobile has, in particular, driven sales in recent months, as shoppers bought online and
as they opted for more comfortable clothing at a time that was both stressful and one in which they were less likely to go into the office to work. “Land’s End’s roots are in the heritage of ‘let’s get comfy’,” says Freienstein. “During Covid our wonderful assortment just took off. It was always about being comfortable at home and finding that comfort in a very stressful, unprecedented situation.”
As non-essential shops closed during lockdowns across both Europe and the US, shoppers started to move online to buy – and many came to Lands’ End. Its customer numbers grew 27% in the first quarter of this financial year – to April 30 – compared to the same time last year, while the number of new customers was 71% ahead of the previous year.
“Our customers are loyal and long-standing, but since Covid we’re seen a rapid digitalisation in our customers as much as in our company,” says Freienstein. “We’ve taken that step into being fully digital in our processes and adapting very fast and with new systems and so did our customer. What happened is that our online share rocketed. Within that, mobile is by far the strongest growth channel. So mobile is, in all fairness, the key driver for our growth.”
She adds: “Mobile is still the device that drives growth in the shopping experience, but also conversion of customers in the actual transaction. So, more and more transactional volume comes from mobile.” She adds: “We are well prepared. We have invested a lot in making that mobile experience a very pleasant and easy and convenient experience.”
That shift is reflected in its recent first quarter figures, in which the American lifestyle brand reported a 44.4% rise in global ecommerce revenues from $180m to $260m in the three months to April 30, compared to the same time last year. Overall net revenues, including from around 30 retail stores, most in the US, grew 48% at the same time to $321.3m – and are also up 22% from the first pre-pandemic quarter of 2019. At the same time, net income of $2.6m was well up from a net loss of $20.6m in the first quarter of 2020 – and a net loss of $6.8m in the first quarter of 2019. Looking ahead, the casual clothing retailer now expects its net revenues for the year to grow to between $1.61bn and $1.65bn, and net income to grow to between $27.5m to $34m.
That fast online growth stems from the company’s fast reaction to Covid. “We were very agile, we were very nimble, and also very cautious, and we always reassess the situation,” says Freienstein. “I think this was part of what made last year’s success possible, just that reactivity. There was an opportunity, we weren’t shy, and we did take risk and we took that opportunity. And that paid off. So, it was a difficult year, it was a tough year, and it continued well into this year, being tough and difficult. We are still working from home, and Land’s End will only come back to the office in September. That was a decision taken by the company, making sure we keep our employees safe.” Once staff do return, it’s planned that will be in a hybrid model, with the focus on collaboration, team building and social engagement in the office.
Covid hasn’t been the only challenge the retailer has faced in the last year. Freienstein says that over the last year dealing with Brexit has become a fact of life. “I guess, for every company trading in Europe, and based in the UK,[Brexit] has been something that, you know, we just had to react to, and we did, and we did early on. So we set up the transition into a bonded warehouse early on, and we had transitioned six months before Brexit he came, so we had a lot of time to adapt to the processes.
“And then we had great partners identified to support us in importing into Europe and in the customs processes. We had to adapt but now we have a well-established process. This is just the reality right now – and it is a day-to-day process and part of our operations.”
Customer care: the driving principle
Lands’ End was founded in 1963 in Chicago, as a retailer selling yachting equipment for racing sailors. Over the years it moved into leisure clothing and today the retail brand, now based in Dodgeville, Wisconsin, says its typical customer is female, aged over 45, and is both outdoorsy and engaged in the community, at a time when they may be moving into a new stage of their lives, as children leave home. They are engaged with Lands’ End, following it on social media and recommending and rating products on its website.
One key issue that customers mention is sustainability, and that has become a priority for the company, with a sustainability plan that covers areas from responsible sourcing and packaging to circular design and deploying water saving processes in manufacturing materials such as denim. Shoppers, says Freienstein, ask about sustainability issues in its customer care centre and online.
“Sustainability seems to be more and more important for customers,” she says, “and we do get many comments. Customers are very engaged and they will comment on the product, asking about the sustainable denim in our product range.” Already the retailer’s European distribution centre and headquarters, in the UK, meet environmental standards and its corrugated packaging is 100% recycled. Now it aims to achieve circular design principles, to source fully sustainable materials including cotton by 2025, targets that it is already on the way to achieving.
The customer experience is also a top priority for the retailer and it is using machine learning to make improvements. “Back in 1963 when the company was founded, customer care came first and it is still our driving principle today,” says Freienstein. “We are all about the customer and we are very much into delivering individual relevant experiences for whatever journey the customer chooses, and for whatever reason they have come to the website.”
The retailer is putting AI technologies to work to make its website faster and more easily navigated by its customers. “We leverage global skill and scale to the benefit of our European business, to influence availability of product for our customer and to limit the disappointment when a loved item is no longer available in the right size and colour,” says Freienstein.
Looking ahead
Lands’ End is expanding as it plans for the future, putting in place new sales channels with which to reach its customers – including marketplaces. In July 2021 it started selling on Zalando, as the brand focuses on selling to Germany and German-speaking markets in Europe and more marketplaces are set to be added. “As an ecommerce company, I think these days marketplaces are just another leg that you have to stand on to effectively and comprehensively reach a national customer base,” says Freienstein.
Lands’ End will also extend its use of social media, engaging more frequent and with greater support from its global team, while machine learning is being incorporated into the virtual assistant that is currently in development. New payment options are being added, while backend efficiencies are underway.
Meanwhile, online, its customers are starting to opt for slightly more formal clothing as they gear up for the new stage of moving beyond the pandemic. “We see the Oxford shirt coming back, but in a versatile styling, maybe with a sweat pant and a little more ‘dress up’ shoes. So the customer is now comfortable and confident enough to match and mix all those pieces, and we give the customer a lot of great inspiration on how to do this.
“Our creatives really targeted what is new and we call it ‘work leisure’.” Shoppers can now expect to see jackets with hoodies underneath and linen jackets matched with more formal shirts. “I think there will be a whole new way of dressing when we return to offices and see a whole new kind of fashion sense coming into our world,” says Freienstein. “It’s very interesting and we hope to help our customer with good guidance and inspiration as they enter this new world.” Times are changing once more, and all in all, says Freienstein, “Lands’ End is looking ahead to a “very exciting journey” to come.“
This interview first appeared in the RetailX Top1000 Europe 2021. Explore it further and download it here.
