How Jim Gabel Plans To Reinvigorate Merrell

Merrell had its share of challenges in 2015, including executive turnover and consumer-awareness issues, but its new president, Jim Gabel, is determined to shake things up this year.
In May, the brand lost Gene McCarthy, its president since August 2013, who later joined Asics, while Gabel, the former president of Wolverine’s Performance Group, took over the role.

Gabel aims to have products hit the market faster and bring in new shoppers through a brand platform called Do What’s Natural. He also wants to attract a younger customer, most notably via a recent partnership with Tough Mudder.

David Levy, owner of Connecticut-based retailer Hawley Lane Shoes, believes the brand’s efforts will pay off.

“They’ve gotten a bit hipper in their styles — less bulky on the women’s stuff. That’s resonating well with the customer. Their men’s stuff also is cooler and hipper without being too edgy, which has been a good fit for us,” said Levy. “And in terms of building awareness, the [Do What’s Natural] campaign makes them more relevant to the younger customer.”

Gabel spoke with Footwear News about his plans for Do What’s Natural, the Tough Mudder partnership and creating consumer-focused products.

Merrell’s sales grew only 1 percent in Q3. How can you fuel more growth at the brand?
JG: As a competitive person at a company that is focused on shareholder value, that growth fell short of our expectations. Currency has been a big headwind for us; when you’ve got that much business that’s international, we can do a lot of things right, but if currency is going against us, it does present a problem for revenue growth. But we feel the stories we’re coming out with are not just U.S. stories — they’re global initiatives — and we’ve got global partners that are on board with these concepts.

Jim Gabel Merrell
Jim Gabel.
CREDIT: Thomas Iannaccone.

Gene McCarthy left abruptly in May. What impact did his departure have on the brand?
JG: The good thing about our strategy with all of our brands is our philosophy on leadership, which is that one person does not drive the business; it’s a collaborative effort. I was actively involved as president of the overall group on the direction of Merrell, and we’ve got an incredibly seasoned and talented team in the senior management group.

If one thing has changed, it’s that we’ve accelerated. By me being directly involved in the business now on a day-to-day basis, products that were taking 18 months to market, we’re bringing to market in nine months, as evidenced by things like Polar Ice Grip and 168, which is a new after-sport initiative for us that was originally planned for spring ’17 but was forwarded to fall ’16.

What challenges are you addressing in your new role?
JG: [I want] to move with greater speed in product development. We will come out with product four times a year, not just twice a year. And we’ve shifted additional resources to the women’s side.

What are your plans to improve how Merrell operates in the outdoor market?
JG: For 35 years, we’ve been making the best hiking and outdoor products in the industry, but what we haven’t focused on is telling our stories. You’re going to see us talk about key concepts and stories in a much more impactful and consumer-focused way. The other thing is that in the past 12 months, we’ve changed how we develop products.

We’ve always listened to the consumer, but now we’ve got a formal integration of the consumer into our development process. We set up a footwear panel in the U.S. that has more than 3,000 Merrell and non-Merrell consumers who guide us in what they’re looking for in products, how we improve existing products and new areas they want to see the brand go into. In 2016, that consumer panel will expand into the U.K. and Asia. We expect to have a global panel of around 10,000 consumers.

What customer feedback have you received?
JG: The customer tells us that we make incredible products. The most recent NPD survey had Merrell as the most-loved brand out of all 140 footwear brands that were in the study, and that’s including the big athletic labels. Yet our brand awareness is at 2 percent, so we don’t tell people about it. That’s what we’re doing through this storytelling, and the Wolverine Group will make the largest investment it has ever made in Merrell in 2016 so we can launch an integrative brand platform and start talking about the product.

How will Merrell communicate more effectively with consumers?
JG: We’ve significantly retooled our digital strategy, and one of the ways is through a much different social strategy and the Do What’s Natural integrative brand platform. Two-thirds of the content will be created by users. It’s an open invitation to people to tell us about what their “natural” is in the outdoors. One of the challenges we’re working on is having Do What’s Natural come to life in the impactful way it needs to. We’ll also launch a new Merrell.com in 2016, and that site will be a much different level of engagement with the consumer.

In 2015, we built an ambassador force for Merrell, Saucony and Chaco. We have 45 people in the marketplace coast to coast who are ambassadors for the three brands who we mobilize when we have a product launch. They’ll be able to have all of our best retailers trained within a week, and they’ll be able to activate events around Tough Mudder in the way we need them activated. It was a $5 million investment to bring in 45 people.

How is Do What’s Natural different from what Merrell has done in the past?
JG: We’ve had things like Get Outside and In Connect, but they were more taglines than brand platforms. Do What’s Natural is a brand platform, and therefore, it has longevity as an open invitation to a wide variety of consumers.

How will the Tough Mudder partnership help you attract new consumers?
JG: [The race] has more than 4 million Facebook fans, so that will immediately get us [in front of] a new, younger consumer. It’s a true partnership in terms of product we develop and how we then message to their and our consumer.

What attracted you to the event?
JG: What we loved about Tough Mudder was that it’s the world’s biggest obstacle challenge. It operates in eight countries, has 63 events around the world, people participate in them on an annual basis and they’re growing in a meaningful and impactful way. We also loved that it’s not a timed event — it’s all about teamwork. You can’t enter a Tough Mudder event without being part of a team. These are people who love the outdoors, so it’s a perfect tie-in for us.

We see Tough Mudder as an entry into nature’s gym. If Merrell were to come out with a white athletic shoe because athletic is hot, that wouldn’t be who Merrell is and wouldn’t be appropriate for us as a brand. But if we look at nature’s gym and what’s happening in the outdoors from an athletic perspective, it is very appropriate for Merrell to be in that place, whether it’s trail running or obstacle challenges.

As the outdoor industry heads to the OR show this week, what are the biggest challenges facing the segment?
JG: Having an answer to athletic. It’s not just about having a white shoe and putting your name on it — it’s how do we participate in the athleisure trend? Clearly, everybody continues to be challenged by how to attract a younger consumer to the outdoor space — so much so that our research tells us that if we’re outdoors, and I say we just hiked and you say that was a walk, we just did the same exact thing. What we’re trying to do is remove the barriers to people getting into the outdoors and enjoying it the way they want to enjoy it.

Our research tells us that 28 percent of people who are in the outdoors right now feel they’re wearing the wrong footwear; they’re wearing either a tennis shoe or a deconstructed lifestyle shoe. They head for the outdoors and they don’t have a great experience because they’re either sliding on the trails or the shank isn’t strong enough and their feet hurt afterward. We can educate people on the right footwear [to wear] in the outdoors, but if that footwear is all $150, they’re not going to buy it. We’re making the brand more accessible.

If you look at something like the Capra, it starts at $90, so the brand is a lot more accessible to the first-time user. And in our styling, we’re making sure that they can wear the shoes not just in the outdoors for a specific purpose but also from a lifestyle standpoint, so [the footwear] reflects that they want to be associated with the outdoors whether they’re on the trail or just walking around.

[Editor’s Note: This story first ran in print 01/04/16]

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