Dive Brief:
- Birkenstock plans to open more retail locations to meet customers’ demand for physical touch points, executives said on the company’s third quarter earnings call last week.
- “Consumers are becoming increasingly selective and more intentional in their spending and looking for more physical touch points with the product,” CEO Oliver Reichert said.
- Despite a desire for more in-store experiences, online engagement remains strong. Birkenstock membership grew 36% from last year to 6.9 million customers, with members tending to spend 25% more than those not in the program, according to Reichert.
Dive Insight:
Birkenstock wants to expand its in-person offerings, whether through wholesale or its brick-and-mortar footprint, to meet customer demand and create lifetime customers.
“People love to come to us and see the product and touch it and feel it because quality is just a word. If you see and feel the quality, that's a differentiation from all the rest,” Reichert said.
The footwear company added seven stores in the third quarter, bringing its total to 64.
“If you have somebody in front of you explaining the benefits of the footbed, talking about the second-best solution next to barefoot walking, the impact is dramatically high,” Reichert said. “And it leads into a higher price point once we create a sale and, of course, we create a fan that comes back with his friends, family, relatives.”
Wholesale partners are an important part of the equation, offering customers another touch point for the product.
“We're a little bit more agnostic to the actual endpoint of distribution. If the demand is there, the demand is there,” David Kahan, CEO of Americas at Birkenstock, said on the call. “Again [if] somebody purchases our product, it's not a one-time purchase, it's a lifetime consumer. So if that first purchase just happens to happen in a wholesale partner, suffice to say, the lifetime value of that consumer across channels, especially when they become one of our members is quite significant.”
