Patagonia Sales Funnel

Part
01
of four
Part
01

Patagonia Sales Funnel: Online

Patagonia customers can easily search for Patagonia's online products on multiple third-party websites. Customers can see reviews, compare prices, compare products specs side-by-side and get instant expert advice on products they are interested on. Customers always take advantage of Patagonia's "Ironclad Guarantee" of quality. More details about the customer journey in Patagonia's online sales channel are presented below.

GENERAL INFORMATION

  • Patagonia sells its products through multiple companies including Dicks Sporting Goods, REI and Sole 2 Soul.
  • Two most popular sites for Patagonia gear after their direct website are REI and BackCountry.
  • The last Patagonia released statistics regarding wholesale sales, showed that 59% of sales came from third-party sales.
  • Patagonia customers takes advantage of the company's "Ironclad Guarantee" which guarantees the quality of all products regardless of where they were purchased.
  • Patagonia customers can be reassured knowing that only 0.39% of all returns in 2018 were due to quality defects.
  • Customers can either return products directly to the site they purchased from or to Patagonia directly via the website.

CUSTOMER JOURNEY

  • Customers first searches for Patagonia online website.
  • Patagonia authorizes you to register for or otherwise use online shopping.
  • Third-party websites show positive customer reviews for Patagonia products, and sort products by 'best match' with the top products having the most favorable reviews. This allows customers to see reviews left by people who previously purchased the products.
  • BackCountry not only shows customer reviews but also Patagonia marketing materials such as video and photo advertisements.
  • Many online stores allow customers to take advantage of coupon codes, especially for first-time shoppers.
  • After going through the reviews and comparing items side-by-side, customer is able to pick what best suits them and puts them to their cart.
  • They then proceed to check-out by paying for their products.
  • All orders placed must obtain pre-approval with an acceptable method of payment, as established by our credit and fraud avoidance department.
  • Most orders are shipped within one business day from the day the order was placed and take 3-7 business days to arrive by standard ground shipping.
  • The buyer should inspect the goods for fault and notifying Patagonia within 15 working days of receiving the goods should there be a fault.
  • The buyer should notify Patagonia within 30 days of receiving goods should they wish to exchange the product or return the purchase for store credit or refund.
  • Customer is the one responsible for all costs associated with the return of goods to Patagonia.
Part
02
of four
Part
02

Patagonia Sales Funnel: Patagonia Store

Patagonia attracts customers to its stores by using wall banners, billboards, and web advertisements. Consumers that seek to engage in adventures such as running, skiing, climbing, or fishing, discover that Patagonia is devoted to equipping them to grab life by the horns. Patagonia helps them live life to the fullest.

CUSTOMER’S NEED UNTIL PURCHASE

  • The childhood ambitions of some current Patagonia customers include climbing Mount Everest. The quest for adventure has remained strong, inspiring some adventure seekers to chase their dreams all over the planet.
  • Different companies provide solutions that address the needs of this young and fearless group of ambitious people. However, a negligible number of companies treat the needs of adventure seekers with the integrity, passion, and pride that come close to the attributes of Patagonia.
  • By being highly passionate and by displaying integrity when dealing with adventure seekers, Patagonia has been able to attract potential customers, who end up buying its products.
  • Many adventurous athletes are traveling around the world to experience as much of sport as one can envisage. Their trips need significant planning as well as preparation and usually take months to complete.
  • Patagonia solves the planning needs of customers by providing them with extra materials for education and inspiration, to assist in their planning processes.
  • The civil servitude of Patagonia appeals directly to customer values. Similar values create a strong relationship between Patagonia and consumers. This appeal makes buyers feel confident that "their retail choices are informed, ethical, and positive."
  • Consumers who like to run, ski, climb, or fish, usually discover that Patagonia is devoted in its attempt to equip them to grab life by the horns, living it to the fullest. Patagonia purchases are hinged on the desire to equip/empower every customer to take on new tasks and get the best out of such tasks.

HOW BUYERS LEARN ABOUT PATAGONIA'S STORE

  • Patagonia attracts customers by designing and making available products that fulfill consumer needs.
  • The company's committed method of consumer attraction is also evident from its current "commitment to utility." This commitment is illustrated more comprehensively using pictures displayed on the Smile website, which reveal a minimalist design, organized collections, and easy-to-navigate menus.
  • Apart from physical banner ads, Patagonia advertises its various sales channels like physical store locations across the world on its website.
  • Insights obtained from The Drum web (screen capture available here) indicate that Patagonia has some strange advertising messages hosted on walls in Europe to attract customers.
  • One unusual off-the-wall advertising recently requested customers to "think twice before buying" Patagonia's products. Some customers learn about Patagonia through outdoor adverts.
  • Some Patagonia customers learn about its products via newspaper adverts.
  • In 2017, the company published an anti-consumerist campaign which asked people not to buy its jacket in the New York Times on Black Friday. The reason being that the product had failed the environment and was not ecofriendly.

WHERE BUYERS GET THE PRODUCT

  • Patagonia has multiple sales channels such as physical stores, dealers, and environmental grantees, which can be located using a store finder.
  • Potential Patagonia customers who decide to buy can purchase its products at physical store locations (brick and mortar stores).
  • The arrangement of products within stores may differ across various Patagonia store locations. However, the exposed brick, wood, as well as stone elements, are usual features at its numerous stores.
  • Patagonia has a focus on simplicity, and this is visible as soon as someone enters any of its retail locations. Patagonia locations do not have a sophisticated/complex arrangement as observed in the pictures published by Smile.
  • The physical store locations (sales channels) of Patagonia are at least eight in count across California, United States. Patagonia has two physical sales channels (store locations) in Colorado and two in Connecticut.
  • Patagonia has one store in the District Of Columbia. Other physical sales channels are located in Illinois (2), Maine (1), Massachusetts (1), Minnesota (1), Montana (1), Nevada (1), New York (4), Oregon (1), Pennsylvania (1), Tennessee (1), Texas (1), Utah (1), and Washington (2).
  • With brick and mortar locations in various continents, Patagonia store locator is accessible via this link.

AFTER SALES SUPPORT

  • Customer journey with Patagonia does not end after a purchase.
  • Patagonia customers are advised to recycle used clothing purchased from the company by dropping clothes beyond repair at any of Patagonia's brick and mortar store locations. The aim is to reduce waste as well as provide some benefit to less fortunate communities. 
  • Those who cannot visit a brick and mortar (physical) store can return worn-out clothing via mail. The email service makes the garment recycling service of Patagonia available to both local and international customers.

METHODOLOGY

Our team soured through customer surveys, industry expert opinions, etc., such as Smile web. We studied for insights into the customer journey leading to purchase from Patagonia's physical store/sales channel. We also studied Patagonia customer experience spotlight to gain insights into their needs for a product, up until when they make an actual purchase. This strategy revealed that consumers who like to run, ski, climb, or fish, discover that Patagonia is devoted in its attempt to equip them to grab life by the horns, living it to the fullest. We studied for Patagonia's sales channels, but they were not covered in the survey.



Part
03
of four
Part
03

Patagonia Sales Funnel: Third-party Stores

Patagonia customers can easily find Patagonia's products online on multiple third-party websites. Customers can see reviews, compare products, get expert advice on products, and despite not purchasing the item through Patagonia directly, can still take advantage of Patagonia's "Ironclad Guarantee" of quality. More details about the customer journey in Patagonia's third-party store sales channel are presented below.

GENERAL INFORMATION

  • Patagonia sells its products through multiple third-party companies including Dicks Sporting Goods, REI, Sole 2 Soul, and many more.
  • A web search for Patagonia returns REI and BackCountry as the two most popular sites for Patagonia gear after their direct website.
  • REI is one of the most popular websites in the world and is ranked higher than both Patagonia's site, as well as the BackCountry online store.
  • The last time Patagonia released statistics regarding wholesale sales, it showed 59% of sales did come from third-party sales.
  • Patagonia customers can take advantage of the company's "Ironclad Guarantee" which guarantees the quality of all products regardless of where they were purchased.
  • Patagonia customers can be reassured knowing that only 0.39% of all returns in 2018 were due to quality defects.
  • Customers can either return products directly to the site they purchased from or to Patagonia directly via the website.

CUSTOMER JOURNEY

  • Third-party websites show positive customer reviews for Patagonia products, and sort products by 'best match' with the top products having the most favorable reviews. This allows customers to see reviews left by people who previously purchased the products.
  • BackCountry not only shows customer reviews but also Patagonia marketing materials such as video and photo advertisements.
  • Products are generally broken down by categories, with men's, women's, and children's apparel ranking as the top three.
  • Apparel is the biggest Patagonia third-party product based on consumer reviews.
  • Customers shopping on REI can take advantage of the 'Compare' feature to compare Patagonia product specs side-by-side as well as customer reviews.
  • Customers looking to purchase Patagonia gear on REI can take advantage of well-maintained used gear to cut back on costs.
  • Many online stores allow customers to take advantage of coupon codes, especially for first-time shoppers.
  • REI has a unique feature for customers to not only get advice on activities but also get "Expert Advice" on gear.
  • Another unique feature that's exclusive to shopping on REI is that customers can take part in the "Community Conversation" to get advice.
  • On BackCountry, customers can call in or live chat to get advice from the company's "Gearheads."
  • Checkout includes coupons for the wholesale site, not Patagonia directly, however.

Part
04
of four
Part
04

Patagonia Sales Channels: Revenue and Merchandise

Unfortunately, the merchandising and revenue split between Patagonia's three sales channels was not found. However, it was found that Patagonia has four sales channels which are catalog, retail stores, online, and third-party wholesalers. Also, it was found that about 36% of its annual revenue is derived from online sales through their website.

PATAGONIA

  • According to Rose Marcario, CEO of Patagonia, the company was close to making $1 billion in 2015, but they won’t disclose their actual revenue publicly.
  • This company is also projected to spend around $299.3k on IT.
  • According to Fast Company, Patagonia’s. “Sales increased by about 30% during 2012, to $540 million.”
  • Patagonia has a multichannel marketing approach which includes catalog, online, retail, and wholesale.
  • Morlee Griswold, an executive at Patagonia, says that they break their buyers into three types: casual, loyalist, and cheerleaders.
  • In 2018, they made $355.7 million in net sales from their online sales channel.
  • Online sales account for around 36% of their annual revenue. ($355,700,000/1,000,000,000 = 35.5)

RESEARCH STRATEGY

Your team began by reviewing the Patagonia website looking for their financial statements or annual reports. Usually, any financially related data would be listed there, including revenue/merchandising based on distribution channels. Although their company information, corporate sales, and others were reviewed, there were no financially related documents located.

Since there were no traditional financial documents available, the next strategy was to find investor presentations and/or quarterly announcements published either on the Patagonia website or other sites like PR Newswire and Annual Reports. These types of presentations are known for having data like sales channel breakdowns, consumers demographics, etc. None of the press releases found were related to quarterly financials and no annual reports were found using this method.

The next step was to review business database/indexes like CrunchBase and Hoovers to see if any financially related information is publicly available. This search did produce some financial data like their estimated revenue and projected IT spend, but none of the information found could help determine the revenue/merchandise split of their distribution channels.

As a final resort, industry publications related to clothing for skiing, snowboarding, and other related activities. Some websites reviewed were Sports Insight Magazine and Apparel Magazine. These publications focused more on the clothing options available at Patagonia rather than their business structure. There was also a search for logistic related publications to see if this company and its revenue/merchandising split was featured. A few sites reviewed were Logistics Management and Fast Company. Unfortunately, this method also didn’t produce an answer to the question presented.
Sources
Sources

From Part 01
Quotes
  • ""Dicks Sporting Goods, Sole 2 Soul, REI""
Quotes
  • ""Patagonia’s Fair Trade Certified™ sewn tech tees are made to wick moisture, dry fast, and handle the heat. They keep you comfortable when you're working hard in conditions ranging from temperate to scorching.""
Quotes
  • ""We guarantee everything we make. If you are not satisfied with one of our products at the time you receive it, or if one of our products does not perform to your satisfaction, return it to the store you bought it from or to Patagonia for a repair, replacement or refund. Damage due to wear and tear will be repaired at a reasonable charge"."
From Part 03
Quotes
  • "Patagonia is in business to save our planet"
Quotes
  • "Patagonia’s Fair Trade Certified™ sewn tech tees are made to wick moisture, dry fast, and handle the heat. They keep you comfortable when you're working hard in conditions ranging from temperate to scorching."
Quotes
  • "Products sold through wholesale partners at around 59 percent of total sales."
Quotes
  • "We guarantee everything we make. If you are not satisfied with one of our products at the time you receive it, or if one of our products does not perform to your satisfaction, return it to the store you bought it from or to Patagonia for a repair, replacement or refund. Damage due to wear and tear will be repaired at a reasonable charge."
Quotes
  • "Only .39% of returns of Patagonia products were due to defects."
Quotes
  • "REI ranks as the 2,632nd most popular website, higher than Patagonia's own site at 7,132 and BackCountry at 11,185."
Quotes
  • "Your go-to source for expert outdoor knowledge you can trust. All the information you need to learn new skills, choose and maintain gear, prep for your trips and have amazing adventures."
Quotes
  • "This community is a place where people who love the outdoors can connect, learn, share, inspire each other, and celebrate getting outside. Whether you're a seasoned expert or have just taken your first step on the trail, you are welcome here."
Quotes
  • "Our Outdoor Experts Offer Personalized Service to Make Gearing Up Easy"