My relationship with GoLite — and specifically with its founders and owners, Kim and Demetri Coupounas (“Coup”) — goes back nine years, to the summer of 2003 when GoLite welcomed me to Boulder, Colo. as a summer intern. We have both grown a lot since then. During my speaking and book tour earlier this Spring I fielded a few questions to the effect of, “WTF is happening at GoLite?” in regards to its decision to abandon the traditional retail market, drop its prices, and open its own stores. In this interview I give Coup an opportunity to explain this decision and its effects, as well as his broader perspective on the company.
Andrew: GoLite was founded in 1998 – 14 years ago – as arguably the first “lightweight backpacking” manufacturer. It has evolved several times since then. How does GoLite describe itself now?
Coup: We take pride in continuing to make some of the lightest backpacking clothing and equipment in the marketplace, as well as light, simple, functional products for travel. And we have increased our commitment to sustainability in recent years.
Andrew: You have been its president since the beginning. How is Kim, your wife and GoLite’s co-founder, now involved?
Coup: Kim was CEO, as in Chief Executive Officer, for years. For two years she was Chair of the board of the Outdoor Industry Association and that was a second full-time time job. In that role, she helped focus the industry on accelerating its commitment to and performance toward being more sustainable as she’d already been doing at GoLite for years. When her term was up, it was natural to continue the emphasis on that work at GoLite. To save printing costs and save paper, we called her Chief Environmental Officer, still our CEO. Two years ago, George Demetrios Leonidas Coupounas was born which, as every mother knows, was and is a huge, if glorious effort. So, Kim has two full-time jobs again. At GoLite, she continues to spearhead all our sustainability work – more broadly as Chief Sustainability Officer, and of course she has tremendous institutional memory and is an owner.
Andrew: When GoLite began to shift away from purely function-driven and minimalist products (think: the Coal Parka and Lair Tarp/Nest), some accused it of “selling out.” Why did GoLite’s product direction change? Why did you not just remain a more focused – albeit much smaller – cottage company?
Coup: From the very start we wanted to help as many people as we could to lighten up and enjoy the outdoors. We’re not here to just help a few – we’re here to help many. Some don’t seem comfortable with that. Some use terms that, if they were in my shoes, they’d find offensive, rude and unfair. No one here has “sold out.” If we had, we’d have more money :-~)
I look at this issue like the way I look at (listen to) music. I don’t hold it against the Beatles that the White Album contains “Revolution 9” a “song” I don’t care for – I just don’t listen to it. I listen to Let It Be, A Day in the Life, Hey Jude, Eleanor Rigby, and continue to thank John, Paul, George, Ringo and their various producers and managers for the greatest music I’ve ever heard.
Similarly, at GoLite, why it would bother someone that we make certain products that are “light” instead of “ultralight” is beyond me. Everything we make we make for a reason and because the signals we’ve received from all of our customers and potential customers over the years have indicated needs and desires that are broader than what any individual or small group may care for.
Andrew: Over the last 1-2 years GoLite has transformed its business model, from being focused on its wholesale business (the traditional model, whereby a manufacturer sells its products to a retailer which then re-sells these products to consumers) to being focused on direct sales, through its website and stores. Can you explain what the model looks like today?
Coup: In the US and Canada, virtually all sales are now direct to customers through our website, our town stores, and our outlet stores. In all other markets, we sell through distributors that decide what in our line to purchase and resell, as well as how to price and market it.
Andrew: Have you “bet the farm,” so to speak, on this new model?
Coup: When you run a small business in this economic environment, you bet the farm frequently. And this bet is working. We now sell far more through our website and stores than we ever did through traditional outdoor retailers.
These results are due to a combination of being able to: present the complete brand, holistically; tell the lightweight and sustainability stories with integrity; and pass on to our end customers the dramatic cost savings that this model realizes.
Andrew: What drove GoLite to change? Why did it struggle to succeed as a traditional wholesaler? Was it a failure of GoLite’s product, branding, or management? Was it the strength of GoLite’s competitors? Or was the retail market too difficult to crack?
Coup: We were dissatisfied with how slowly our innovations were accepted in the traditional sales channel, as well as with how diluted the message was by the time it got to the end customer. Previously, there was a merchandiser, buyer, sales rep, store manager, and sales staff between GoLite and the end customer. Now there is nobody between GoLite and the end customer.
Andrew: Is this the “new” GoLite, or is the model still evolving? What changes or additions will take place in the next 12-18 months?
Coup: The basic strategy is visible now – this is what we’re doing. However, there are constant tactical adjustments that need to be made based on our continuing learnings. This is a whole new way of doing business for us. It’s better. We’re much happier with how we are able to present product and the brand, to interact with our customers, and to grow sales. But there continues to be lots to learn.
Andrew: How are customers affected by this change, in terms of prices, customer service, and product availability?
Coup: I hesitate to answer for customers – generally, it’s good to hear them speak in their own voice. But what I have heard and seen is that they are able to now understand the whole brand, what it means and stands for, and how the products should be used, than previously. They also seem to appreciate that our products are not just light on their backs and light on the planet, but also light on their wallet. On the backend, we are able to service our customers better because there is a direct and extensive stream of information (e.g. popular products, sizes, and colors; feedback about product design and store layout; etc.) coming into our systems daily, whereas before this feedback loop was much more diluted and delayed.
Andrew: GoLite’s pricing is sweetly discounted versus industry averages. For example, right now its 20-degree 800-fill mummy bag costs just $200, and long-sleeve merino wool tops costs just $45. If the old adage, “You get what you pay for,” is true, then there must be a catch. What is it here?
Coup: It’s true that you get what you pay for. And if you want to pay for tradeshow fees, tradeshow booths that cost as much as a house, sales rep commissions, sales meetings, obsolete inventory, pre-season discounts, collection fees, bad debt, order cancellations, lots of flights, rental cars, hotel rooms and dinners, as well as all the traditional retailer’s expenses, go pay some other company $400 for that bag and $90 for that shirt. If you just want to pay for quality, sustainable materials and an excellent design, plus a fair rate for labor, shipping, and rent – which we can deliver at a cost of about 1/3 – 1/2 below the industry average – then get them from GoLite.
Andrew: Since GoLite has always sold direct on its website – although at wholesale prices – and since it has been doing semi-annual sales in Boulder and Denver for several years, it might seem like an easy transition to start selling direct exclusively. But I’m guessing it was not so straightforward. I have two sub-questions:
Andrew: 1. How difficult has it been to find store locations, train employees, and keep good inventory levels as you build up your direct business?
Coup: It’s a lot of work, but it’s all work that bears fruit, which makes it satisfying and rewarding. In selecting real estate, for example, we have run lots of experiments – not always intentionally – around square footage, customer access (parking versus walk-by traffic), and various towns and regions. And we apply all that learning to places we select going forward.
As for staff, we have good people here at headquarters choosing good people out there in the field. Like all personnel decisions it takes time, work, and insight. But, again, it’s gratifying and rewarding to know that when we find the right store managers and staff, they will spend their entire workday thinking about, and helping customers understand and appreciate, just one brand – GoLite’s full story and full range of products, with integrity. Our employees are also better able and more than willing to pass along insightful feedback from customers.
Andrew: 2. How have you had to change development and production now that the entire product line is available at GoLite stores, instead of just a few standout items that a retailer might have carried?
Coup: The product selection and production process has been liberated. For example, take the Ion pack, which we had to discontinue because there wasn’t enough demand for a single production run per season at our former sales volume and the amount that had to be charged at retail. At the price we’ll be able to charge in the future, and our increased size, we’ll be able to run several production runs per season. Previously, we had to make bets on what buyers at retail stores would want, not knowing if they would want enough in one season to justify an entire production run. Even if they did want enough for one run, they might not want much more, in which case our distribution center becomes a warehouse, which is unfortunate. We also no longer have to sell buyers on entirely new products, convincing them that there is a demand. Instead, we can simply make a single production run and watch how quickly it sells. If it sells quickly, we’ll order more next season; if not, we’ll order less, or discontinue it. This sort of rapid, detail-rich data feedback was simply not available in the past. And with so many more voices weighing equally in the process, it’s a more democratic way of doing business.
Andrew: Related to development and production, what has GoLite been able to do since it went direct that it was unable to do as a wholesaler? New products, designs, materials?
Coup: Next year we will have the lightest free-standing tents on the market, at a very affordable price. It’s ultra-light for an ultra-low price. Previously, it made no sense to present these products to buyers since they already had a preconceived notion about GoLite’s role in their store and since they may have already had another brand supplying them with similar product. Similarly, we also now sell great merino wool base layers in our stores. This makes total sense for us – our customers understand merino wool’s advantages and they want it. Before, we could never have even considered selling wool base layers to traditional retailers, since those retailers already relied on several other suppliers that had a brand story and product line entirely oriented around wool. This is a product category that will expand next year.
Andrew: I have presented at most of the GoLite stores – Boulder, Denver, Fort Collins, SLC, Santa Fe – and I’d say that few of the customers or the employees are hardcore, or even avid, backpackers. It’s much more mass market. Knowing this, how do you avoid losing your core customer and your identity?
Coup: Our web site sales are equipment rich and ultra-lite skewed; far less so our store sales as you’ve witnessed. Introducing and re-introducing true core products is something that we are very much looking forward to. Our direct website and stores, and our pricing, now enable this, since we have the sales outlets and volume to support more niche items.
Andrew: In my early years I was very focused on a product’s weight, but my view has evolved and I now actually think there’s too much emphasis on it — it’s only one important characteristic of gear, along with functionality, durability, reliability, ease of use, etc. I think GoLite was ahead of me on this, since it was putting hip belt pockets on its packs and #5 zippers on its raingear before my thinking had fully evolved. So it’s funny to hear you use the word “light” so often. Where does GoLite stand on this?
Coup: Weight is very important. It’s the third characteristic of our hierarchy for designing gear. First is function/performance. Second is durability. Beating one’s chest while proclaiming that one has the absolute lightest product available – regardless of function, fit, durability, cost, etc. – doesn’t make sense to me. I still remember going out for an overnight with nothing, head to toe, just to see if that was best. It’s not. But we continue to emphasize weight because when you stop focusing on weight, things will naturally become heavier and heavier until you are right back at traditional, overbuilt gear. At GoLite, the weight of our products is discussed and emphasized from the start of the design process, all the way through quality control and shipping.