YETI announced its second quarter (Q2) financial results for 2022 showing customer shopping trends that will further its growth for the annual year, including holidays. Total net sales increased 17%, partly driven by the company’s 14% increase in wholesale revenue. YETI has also focused on its direct-to-consumer business, which increased by 14%. Matt Reintjes, president and chief executive officer, commented, “YETI delivered strong growth during the second quarter, comping last year’s significant 45% growth. We believe this performance continues to demonstrate the incredible resiliency and vitality of the brand as well as the durability of demand for YETI.” While the company stated that sales were slightly below expectations, the demand for YETI products remains strong, with a three-year compounded annual growth (CAGR) rate of 22%.
YETI secrets revealed
YETI product development teams collaborate with marketing to bring category-redefining products to market. Through its advanced analytics, YETI can build a robust product roadmap that drives future demand by identifying customer needs and wants. The company has its state-of-the-art research and development center in Austin, TX, where it can generate prototype products. YETI uses the research center and its ambassador program to test the performance of products. According to the company, once the final design and specifications of a new product are approved, it partners with global suppliers and specialized manufacturers to produce products according to its exacting performance and quality standards.
Connecting consumers with brand storytelling
Reintjes discusses the importance of telling stories to build deep loyalty with its customers. The company does this in many areas, including a recently completed film tour featuring seven new films showcasing inspiring tales from the wild. In step with consumer preferences towards brands that practice relevant social responsibility initiatives, all proceeds from ticket sales will benefit various conservation groups dedicated to preserving the outdoors.
The company has over 150 brand ambassadors who are outdoor enthusiasts, sports fanatics, and food and wine connoisseurs across over a dozen communities which build customer engagement and, according to the company, have been a backbone of the business from the start.
A key trend going into fall for many retailers is being able to build and tell a brand story, but for YETI, it is in the company ethos. The company sees this as a way to build a strong community within its core customer base alongside the ambassador program. Reintjes discussed how videos from its users are the most successful and create the highest engagement with its customers. Specifically, he called out one recent post on TikTok, highlighting a fan’s vast YETI collection, which has captured nearly 10 million views and the response to the video received over 200,000 likes. “We are still exploring opportunities on many social channels, but TikTok remains an important opportunity for the brand.”
Customer trends heading into fall and holiday
Reintjes discussed that today’s consumers are very thoughtful about where and what to buy, so the company focuses on creating products sought after by its highly engaged loyalists. Product innovation is vital for the brand. Reintjes discussed how the quality of customers and strong retention come from a loyal customer base, engaging storytelling, robust marketing and advanced analytics.
While many retailers have an easier time with customer acquisition in the second half of the year, especially around holiday shopping, gaining new customers has slowed down in Q2. This trend has been seen across the industry, with many retailers facing high customer acquisition costs in Q2, including YETI.
Retailer’s focus in the second half of the year
During the peak selling season, customers are inundated with various product offerings across many retail stores with many products on the market. For YETI, the second half of the year, including the holiday, will be focused on driving attention to the YETI brand and supporting its wholesale partners.
Many brands have placed more emphasis on direct-to-consumer business and digital offerings, which will help to drive deeper loyalty and higher spending from the customers and, at the same time, provide companies with an abundance of shopper data that can be used going into 2023.
Demand remains high for YETI
YETI is hyper-focused on product innovation, building brand connections with its loyal following and unique omnichannel approach based on deep customer data-driven insights. Reintjes said, “YETI has an unwavering focus on brand expansion across our diverse multi-channel distribution points, prioritizing and sustaining investments in marketing, people and innovation, and maintaining high customer value. These areas differentiate YETI in the market and will be integral to our leadership position in the quarters ahead.”