After a year marred by the coronavirus and intense racial injustice conversations — topics that are still very much at the forefront — Merrell president Chris Hufnagel is confident the brand’s 40th anniversary will be one to remember.
“Merrell is at an inflection point. We’ve got a full product pipeline and a meaningful emotional story to tell,” said the exec, now in his second year at the helm. “One of our biggest opportunities is getting people to trade out of their sneakers and get into something we make as they start to enjoy the outdoors.”
His faith in the brand he leads appears warranted.
Last year, with the outdoors offering respite to lesser-experienced nature fans, Merrell leaned into its digital platforms to communicate the mental and physical benefits of the trail. Also, the company continued to authentically address its diversity shortcomings: One year removed from signing the CEO Diversity Pledge, the brand leadership created a social accountability taskforce and performed a global marketing audit.
But financial success comes down to product, and industry insiders believe Merrell’s footwear delivers on the demands of today’s aesthetics-focused consumer.
“Merrell has always lived at the juncture of fashion and function, and there’s always been a fashion sensibility to the product that many other outdoor brands simply don’t have,” explained Matt Powell, senior sports industry adviser at The NPD Group Inc. “People in the broader market see Merrell as a fashion leader, as well as a brand that makes credible functional products.”
But this is nothing new.
Jon Zalinski, who has stocked Merrell since opening Treadz Shoes in Colorado in 2008, has witnessed the adoration from consumers of all ages for more than a decade.
“Merrell has a ‘current’ look and feel, but on the other side, they also have things that have been around forever like the Jungle Moc and the Moab. Those are staples of my business,” Zalinski said. “You need Merrell on the wall because it performs steadily throughout the year. People around here know Merrell for solid product at a good price.”
However, like the rest of the industry, Merrell is still facing an uphill climb after seeing steep losses in the first half of 2020, though Q3 brought better news for sales, with only a mid-single-digit dip. (Parent company Wolverine World Wide Inc. will report Q4 results next month.)
Below, Hufnagel talks about connecting with new consumers and offers a glimpse into what the brand’s next four decades could look like.
HOW HAS MERRELL CHANGED OVER THE PAST 40 YEARS?
Chris Hufnagel: “Brands go through an evolution, and at the core of it, Merrell was founded to build great products. We had people who loved the outdoors who wanted to build the very best hiking boot — and they did. Over the years, Merrell has evolved into a global business with partners and consumers around the world. We sell products that are performance-based with some of the best outdoor footwear in the space. At the same time, we’ve got a great collection of lifestyle products and are growing into apparel and accessories.”
HOW ARE YOU MARKING THE ANNIVERSARY?
CH: “It’s a year-long celebration, and we’re going to find important brand moments throughout the course of the year to celebrate where we are and where we plan to go. There are a handful of activations that we’re going to do, some important partnerships. But most importantly, we’re a product company, so you’re going to see a plethora of new product this year. Also, a big piece of that is our brand purpose: We come to work every day to share the power of being outside and we want to do that no matter who you are, where you came from, who you love or how you move. The outdoors is a special place, and we want to make sure it is welcoming and inclusive for everybody. That message has never been more relevant than it is now, and we’re excited to tell that story in a meaningful way. But it isn’t a retrospective. While we certainly respect the past, our eyes are looking at the next horizon and how we can make sure the next 40 years are better than the first 40.”
WHAT DOES MERRELL’S FUTURE LOOK LIKE?
CH: “We should be a global head-to-toe lifestyle business, moving past the categories within footwear we’re famous for to helping people engage with the brand for all purposes and pursuits, and growing both the share of closet and share of mind with our consumers. Certainly, geographic expansion is important — we’re sold around the world today — but there are some regions where we should do better and we know that we can grow. And we need to be at the forefront of the digital revolution that we’re seeing in both how consumers engage with and consume brands. We will make sure Merrell is the leader in that space.”
WITH MORE PEOPLE DISCOVERING NATURE DUE TO COVID-19, WHO IS TODAY’S OUTDOOR CONSUMER?
CH: “Clearly, the outdoors is having a moment. In the COVID era, it’s safe — at least safer than being inside. And with people’s access cut to gyms, restaurants or malls, we’re seeing outdoor participation skyrocket. Every day I drive past a local trail system and I’ve never seen that parking lot fuller than it is right now. All generations — Gen Z, millennials, baby boomers — they’re spending more time outdoors because of COVID, and we don’t see that trend reversing. We don’t think people are going to forget about how the outside made them feel. There was a time when the outdoor industry was stuffy and exclusive, and you had to have climbed so many peaks. We still want to support those people, but at the same time, we want to help people just get outside, whether it’s a walk to their local park or an hour in the afternoon to walk down the street. We’re trying to open the tent up to more people and not treat the outdoors as this exclusive place.”
THE DIVERSITY AND INCLUSION CONVERSATION CAME TO THE FOREFRONT LAST YEAR. HOW IS MERRELL ENSURING THIS REMAINS A PRIORITY?
CH: “For my team, being the most inclusive, diverse and well- represented brand in the industry means a lot, and we’re working hard to create change both within our four walls and across the broader industry. We signed the CEO Diversity Pledge in 2019, and our JEDI [Justice, Equity, Diversity and Inclusion] work is really important to us. In June, coming out of the Black Lives Matter movement, we set up a social accountability taskforce that looks at everything we do as an organization, internally and externally, to make sure we’re doing a better job. And one project we just completed is a global marketing audit to look at our marketing across our consumer touch points around the world. This year, we’re going to launch a JEDI advisory council that’s going to help our efforts. We don’t have all the answers and there are a lot of smart, passionate people out there for us to tap into their expertise to help us be better. This is a journey. It’s not just do something in the wake of the Black Lives Matter movement in June and then put it away.”
AS THE RETAIL INDUSTRY BECOMES MORE DIGITALLY FOCUSED, MERRELL IS LAUNCHING AN APP. WHAT CAN CONSUMERS EXPECT?
CH: “When [new Wolverine president] Brendan Hoffman joined the company last year, he was surprised we didn’t have an app. So it’s in development right now, and we’re planning on launching it in the second quarter. It’s going to be an amazing consumer touch point to engage with the brand. It’s going to be easy to use and navigate, and it will allow us to both sell products and better tell our story. We’re working on all types of different functionalities, whether it’s helping consumers find a trail close to their home, learn about a new product launch or just to engage in more meaningful conversations with the community.”
HOW HAS MERRELL HAD TO RETHINK ITS 2021 PRODUCT PLAN BECAUSE OF THE PANDEMIC?
CH: “We worked hard to tell fewer, bigger stories — like the Moab. This is going to be the year the Moab. We’re seeing momentum in the core Moab, and we’re going to launch lighter and faster versions, as well as the next iteration: the Moab 3. We’re also looking to capitalize on light, fast and athletic, so you’ll see things like the MQM, the Nova and Antora, the Bravada because those styles have momentum. At the same time, we’re paying attention to what happens from a consumer standpoint. This easy-on, easy-off trend is super important, and this idea of a two-mile shoe, one that’s good enough to go two miles from the house. And we’re thinking about other growth opportunities like work and tactical, which have been a business that has been growing but hasn’t been invested in. Then there’s apparel and accessories, which is an important piece for us. We’ve been thinking about all those things as white-space growth opportunities in a way that we haven’t done before.”