Outdoor apparel-maker attracts customers with innovative approaches to green

Riding the wave of inconvenient truths about an increasingly toxic and hotter planet, popular outdoor apparel-maker Nau, based in Portland, Ore., has tapped into a sprawling market of consumers who’re hungry for environmentally friendly products and businesses that put sustainability front and center. With four stores that opened this year, 15 more slated for 2008 and a thriving Web site, Nau (which means “welcome” in Maori) has also taken concern for everything from sourcing to worker rights to unprecedented levels. Ian Yolles, the vice president of brand communications for Nau, sat down to explain the company’s new business model.

DELIVER: How does the unusual nature of Nau become part of its marketing?
YOLLES: Our experience suggests that great brands are built from the inside out. A lot of people think about branding from outside in – a tag line, a logo, some kind of advertising, which is superficial. We had a unique opportunity to build a company from scratch and align all the internal workings of the company to be congruent with the customer-facing interactions to make it authentic. We believe that our values-based proposition is going to be deeply resonant with a large group of people. We had a design philosophy predicated first on performance and function for people who live an active life. Second was not negatively impacting the environment. Third, we wanted a beautiful product.

The dominant design paradigm has been that if you tried to integrate all three of those characteristics in a single product you’d end up with a compromised end result. We felt it was a question of innovation, particularly from a fabric development point of view. In our spring product line, there are about 100 styles made from 30 fabrics – 27 of which required very significant work to commercialize, the reason being that the fabrics that met our criteria simply didn’t exist. For example, all of our two- and three-layer shell garments are made from recycled polyester, which comes from soda pop bottles and has been turned into this waterproof and breathable fabric with an aesthetic look that is very different from anything else in the outdoor business.

DELIVER: Nau is donating 5 percent of all sales to nonprofits, an uncommonly large amount. Why so much?
YOLLES: It certainly gets the customer’s attention. We can do this because we are working in an industry that has been primarily operating within a wholesale model of third-party distribution. We distribute our products through our own channels, our stores and Web site, which gives us significant margin advantage. Much more interesting is that we invite the customers to directly participate in the giving process. For each purchase, we give you a menu of 10 nonprofit organizations that work locally, nationally or internationally – and you choose where we should direct the donation.

DELIVER: How do you get customers into the stores?
YOLLES: We’ve done some advertising in weekly papers and on the radio, but we relied predominantly on word of mouth, which is far more credible. By way of example, we identified people in the community who had interesting stories that related to the sensibilities of our brand and invited them to join us for an evening of storytelling and conversation at three events for each store in the first month. We produced these beautiful invitations on paper stock that had seeds embedded in it, and you could literally bury the invitation and a poppy would grow out of it. These evenings were called “See[d] Change.” We mailed a package of these with postage-paid envelopes to everyone we knew and asked them to send them to friends. We had about 50 people turn out at each event, which is what we were aiming for in our 2,200-square-foot stores.

DELIVER: How do you integrate the store experience and your Web site?
YOLLES: When e-commerce first emerged in 1997, there was a lot of hype about the Internet fundamentally transforming the bricks-and-mortar shopping experience. Shoppers have changed their behavior; they move back and forth between these two channels – they’ll start researching online and then go in a store to try a product on, go home and compare prices on the Internet. But for retailers, these channels still exist parallel to each other. Nobody has connected the dots structurally in a way that is meaningful to the consumer.

When you come into our stores, each style is merchandised, and you can shop the store just like a traditional apparel store. You can try the product on, decide to buy it and sales associates will process your transaction at a (point-of-sale) terminal. However, we merchandise every single product with a corresponding card that has a bar code on it. If you want to learn about the product prior to purchase you can ask a sales associate, or you can take the card to interactive devices we call product trees, scan the bar code, and it will bring up the product detail page from our Web site, which contains all the detailed information about that specific style. You can also take the card to other interactive devices to initiate the transactional experience. When you scan the bar code it calls up the product detail page associated with that specific style. We prompt you to choose the color, size and quantity you want, then we ask if you’re ready to check out. If you are willing to wait a few days to have the product shipped to you at no charge, you get a 10 percent discount on the purchase price. During our first year of operation, we expected only 30 percent of our customers to opt for this “ship to you” methodology given there would be a customer learning and adoption curve. To date 50 percent of our customers have been choosing this approach.

DELIVER: How do you send the clothing to the customer?
YOLLES: We ship it in what looks like a feedstock bag – 50 percent post-consumer recycled paper and you can use it to return the product, if necessary, or you reuse it other ways. So wherever we use paper of any sort – or mailing – we’ve definitely thought about how to do it in the most sustainable way.

To learn more about Nau, its practices and its business philosophy, visit nau.com.