February 27, 2024 • 1748 mins
Meeting Dave Santiago of Cutter & Buck
In this episode of the eCommerce Masters Podcast, host Ethan Giffin engages with Dave Santiago, VP of Omni Channel and Corporate Sales at Cutter & Buck. Santiago, with a rich background in consumer goods and digital sectors, dives into Cutter & Buck's transition from a golf-centric brand to a premium lifestyle label with long-lasting, consumer-favorite products. Their discussion centers around the brand's pivot towards Omni Channel sales, ensuring their offerings resonate across diverse consumer bases, from corporate to retail. Santiago shares insights into the innovative direct-to-consumer (D2C) strategies that propelled Cutter & Buck's growth, particularly through licensed and on-demand decorated products. A standout moment comes as Santiago reflects on the evolution of Cutter & Buck's D2C focus, highlighting the significant shift from an experimental phase to a core component of their sales strategy, aiming for D2C to comprise 15% of total sales within five years.
The conversation delves into the challenges and triumphs of integrating technology and sustainability, which are just pieces of Cutter & Buck's commitment to environmental responsibility. The episode not only showcases Cutter & Buck's innovative approaches to eCommerce and Omni Channel sales but also offers listeners valuable lessons in resilience, adaptation, and strategic growth in eCommerce.
Quotes From The Show"We develop products that we believe will appeal and apply to all channel end users and consumers." - Dave Santiago, 00:05:04 "Our go-to-market strategy is, everything we do is about creating great products and solutions for the end user and consumer." - Dave Santiago, 00:04:47 "We have a very consumer-centric view and end-user view, which is interchangeable to us." - Dave Santiago, 00:04:18 "The overall revenue US for Cutter & Buck is about 150 million this year... approaching 200 to 250 million in 2024." - Dave Santiago, 00:03:40 "It's a really cool role to play because it's never dull. And it's all about engaging consumers." - Dave Santiago, 00:05:38 "We found great efficiency, enhanced profitability, better user experience by making that digital commitment." - Dave Santiago, 00:21:07
Chapters00:00 - Introduction to eCommerce Mastery 04:08 - The Journey Begins: Trailblazers' Stories 08:17 - Strategies for Success in eCommerce 12:26 - Overcoming Challenges in the Digital Marketplace 16:35 - Innovation and Evolution in eCommerce 20:44 - Building a Brand: Insights from the Masters 24:53 - Future Trends in eCommerce: What's Next?
ResourcesCutter & Buck Website: https://cutterbuck.com/ Cutter & Buck Instagram: https://www.instagram.com/cutterandbuck/ Dave on LinkedIn: https://www.linkedin.com/in/alexandravonparis/ BigCommerce: https://www.bigcommerce.com/ Klaviy
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(01:00:00):
(upbeat music)
Welcome to the
E-commerce Masters Podcast,
the platform where we
delve into the stories
and strategies of
e-commerce trailblazers.
I'm your host, Ethan Gippen,
and today we have the
pleasure of welcoming
another remarkable guest to our show.
Joining us today is Dave Santiago,
Vice President of Ami
(01:00:20):
Channel and Corporate Sales
for Cutter & Buck, a
premium apparel brand
that offers products for golf, sports,
and lifestyle consumers.
He has over 20 years of experience
in consumer packaged goods, soft wines,
and digital online sectors,
where he has consistently
delivered revenue growth,
profitability, and customer satisfaction.
(01:00:40):
Dave is one of my favorite
change makers and disruptors,
and we are honored to work with him
as a longtime client here at Groove.
Welcome to the show, Dave.
- Thank you, pleasure to be here.
- It's great to have you.
So excited to have you here today.
So let's dive right into things,
and if you could just
tell us a little bit more
about Cutter & Buck
and the types of products
(01:01:01):
that you sell as a whole.
- Well, Cutter & Buck
is a brand and a company
founded in the Pacific
Northwest Seattle area.
We've been around for about 30 years.
During that time, the
brand and the company
has gone through several iterations.
We pride ourselves on making products
that are designed to be
(01:01:22):
a consumer's favorite,
so the bar's pretty high.
So that really means
something to us internally.
We go to market as a
brand and apparel brand
as an at-ones company, so
we're a little bit different.
When we develop a product
and introduce a product,
it's long-lasting for three
to five years at a minimum,
which works out well for e-commerce.
And we're very heavily involved
(01:01:47):
in lifestyle products in general,
with our roots coming
out of the golf industry
way back when.
The brand itself and its application
and how we design the market products
has evolved to a more of
a lifestyle premium brand.
- That's cool.
I absolutely love my Cutter & Buck vest.
So one of the great
things about what you do
is kind of corporate branded apparel.
(01:02:10):
And so I'm lucky enough
to have a great groove
Cutter & Buck vest
that you will find on me
until the weather gets
usually below 45 or 40 degrees.
I'm rocking the vest, right?
I also want to look like I fit in
the kind of private
equity world of things too
with that when I go to events.
(01:02:31):
- That's great.
Yeah, I know.
We're glad you love it.
A lot of people do.
It's exciting to be engaged with
consumers at trade shows.
And we participate in the
major PGA merchandising test
where it's really cool
to come see and engage
with all the fans that
can identify the brand
(01:02:52):
and they say, "Hey, my
dad bought the product,
"I buy the product, my son buys the
product, and I love it."
So that's real feedback that we're very
proud of and cherish.
- So speaking of golf,
and then you do have a
wide diversity of products,
who is your target market
and what's kind of the
overall corporate revenue
for Cutter & Buck?
(01:03:13):
- The target market is
ages of 35 to 55 mainly.
Average income,
household incomes of 75,000 more.
We do about 80% of our
business in men's apparel,
20% for women, but we
know that the percentages
of women actually buying
(01:03:33):
and purchasing is much,
much higher than the
20%, which is what we love.
The overall revenue US for Cutter & Buck
is about 150 million this year.
In Canada, it's another 20 to 25 million.
We also have our global
sales of Cutter & Buck
is approaching 200 to
(01:03:54):
250 million in 2024.
That's where we're at.
- All right, so what is
the VP of Omni Channel
and Corporate Sales encompass?
What is, it's a very, very
broad umbrella of a role.
Like how are you,
are you touching
literally everything sales-wise
(01:04:15):
that comes into the organization?
- Yes, it is.
We have a very
consumer-centric view and end user view,
which is a terminology that's
interchangeable to us.
So a corporate end user would be our
customer's customer.
So a distributed salesperson
will be presenting products
for a program or for a
company apparel store
and the end user would
actually be the employee.
(01:04:37):
On the flip side, Omni Channel,
it's truly the consumer
target is the end up end consumer.
And the way we see our
go-to-market strategy
is everything we do is
about creating great products
and solutions for the
end user and consumer,
leveraging the
platforms of our B2B partners,
whether it be retail, brick
(01:04:57):
and mortar, golf, on course,
off course, corporate
distributors, on and on and on.
So we develop products
that we believe will appeal
and apply to all channel
end users and consumers.
And that's how we have
developed our development,
our what we call our
market-winning product strategy.
(01:05:19):
And we buy our inventory and
we configure our supply chain.
My role is to oversee
the go-to-market strategies
in all those channels.
I oversee all the sales,
the entire sales force,
including our D2C strategy as well.
It's a really cool role to
play because it's never dull.
And it's all about engaging consumers
(01:05:41):
and making sure that the our
products are getting front,
engaging the consumers again
in front of those consumers
on effectively and efficiently.
So you began your role back in 2016
as license apparel director.
What has kind of been the evolution
of the license apparel
opportunities at Cutter?
So it's been very exciting,
(01:06:03):
but like in retail itself,
the license apparel
industry is consolidated
to some power players,
some super power players.
And we are mainly
fanatics and other major players.
So when I started the campus retail,
which was bookstores were major players,
major contributors dominated
in what we call NCAA apparel.
(01:06:25):
Since then, the
penetration of that market
has been somewhat less and it's been gone
to an online product
acquisition by consumers.
So there's been a
shift in buying behavior
that has really been interesting and
that's true to the space,
but also it's played out just like any
other retail sectors
had years prior, whether it
was selling buying hammers
(01:06:46):
or the major players have come
consolidated, gone away.
And same with the
license apparel industry.
So the way we reach products today,
and consumers today is
really with both in-store
team franchises, brick and mortar retail,
but the online engagement is dominating
(01:07:07):
and that's what's
emerging to be the real play.
So you talk about fanatics a bit and
that's a great opportunity.
So when you sell a
licensed product through fanatics
and they resell your
products, is that being delivered?
Is that being dropshipped
by you in that transaction?
(01:07:28):
In 2017, when I was 16
when we started and I started,
less than 20% of the products was
fulfilled by Köner & Bach.
Now 100% of the product and orders are
being fulfilled by Köner & Bach.
So what that has done is opened our eyes
to the value of no
inventory turnkey solution
(01:07:49):
that we can provide an entire industry as
a real value proposition.
And having been in the game for so long,
the conundrum called
inventory for any retailer
has been really a real
barrier for success for many.
Buying the right inventory,
holding the right inventory,
having enough inventory has been really
(01:08:09):
the holy grail for retail.
So having a partner like Köner & Bach
that can actually own the inventory,
fulfilling one day for blank orders,
decorate on demand in 29
hours for a decorated product
is a real value
proposition to the industry.
And that's our go to
mark, that's our secret sauce.
(01:08:30):
And so for our listeners, to kind of
break that down a little bit lower,
if I order a Baltimore Orioles jacket or
a Baltimore Orioles golf shirt,
it's your product that it's
embroidered with that logo.
You actually embroider that on demand in
about 29 hours and get that out the door.
Yes, for EDI integrated partners, we do
(01:08:51):
that, that's exactly right.
So everything's production ready and we
have a whole workflow
of syndicating the products online,
getting them to get
the orders to EDI feeds,
they go right to the embroidery machines.
I think that is so cool, by the way,
and just the speed at which
you're able to produce that
and get that out to the customer.
(01:09:12):
You've got licensing agreements with
Major League Baseball,
Minor League Baseball, you've got NFL,
you've got Collegiate.
What's kind of next
in terms of licensing?
Where do you think licensing is going?
Do you think you're going to
continue to add and evolve?
Or do you think you kind of
have your core four there?
No, we're in the
application process all the time.
(01:09:35):
We hope to be
considered by the NBA this year.
We're actually in the
application process there,
which we're super excited about.
And we want to continue to add.
We would love to be a
Formula One licensee.
We would love to
continue to add our portfolio.
So we love the play, we love the
opportunity to add the
(01:09:56):
licenses with our brand.
We believe that is a strategy that's just
mutually beneficial,
and we want more.
So do you think that the personalized
products or the print,
the decorate on demand products have
really kind of driven and pushed
your
direct-to-consumer growth of the things
you sell directly through cutterbuck.com?
(01:10:17):
Absolutely, absolutely on many levels.
Just from a consumer reach,
NFL fans outnumber cutterbuck fans.
So being able to leverage
that audience and really make
a compelling offering
for that consumer base,
(01:10:38):
and then we just repeat over the
different channels of
fan bases and affinities.
It also plays in the golf space too.
We are a licensee for
PGA and on and on and on.
So out of all of the license options that
have kind of come out during your watch,
do you have a favorite product or kind of
(01:11:00):
theme or team of your favorite product?
I asked a similar question to a friend of
mine who owns a car dealership.
I said, "What's your favorite car?"
He said, "The one leaving
the park, leaving the lot."
So the ones that are selling the most are
my favorite, actually.
(01:11:21):
I think trans-ationally.
And to be honest with you, prior to
getting into the licensing business,
I had a favorite team, but now really I'm
really in praying for the winner.
Yeah, no, that's great.
No, that's great.
I think a true capitalist.
I appreciate that opinion.
One of the things I think
that I've seen in terms of,
(01:11:43):
I think we've been working together since
about 2016 or so is,
when we started, a direct-to-consumer was
not as prioritized
within the organization.
I hate to call it a hobby, but it seemed
like it was kind of a beta test of,
"Hey, can we sell direct and we probably
(01:12:03):
just need to do it."
How have you created change within the
organization for it to become a much
higher focus where your CEO is involved
at times in conversations and it's now
an important part of what
your overall sales strategy is?
Well, we flipped the
switch on our perception on DSC.
(01:12:26):
When we realized that
there was a path forward,
we could actually grow the
business cost-effectively
and not build empires to support a
business that wasn't performing.
So we're lean and mean in our
organization internally,
and we are really, really funding success
(01:12:46):
and really just building out
our business cost-effectively first with
a great part of Lightproof.
But also, we're seeing the value of the
margins in a direct-to-consumer basis,
and we see the value of those
transactions over B2B host sale.
So it's a big strategic win for us to
really grow that business
as a center total sales.
(01:13:09):
We have a desire to have that segment of
the revenue funnel be
15 percent of our
total sales in five years.
Wow. That is a fantastic goal,
and I really commend you on that.
Have you seen your wholesale customers
push back on any of this
strategy at all in the process?
(01:13:29):
Initially, early on, we'd get an
occasional call and we
would always do the right thing.
But no, it's actually leveled out to
where we've been very
disciplined in our pricing strategy,
and we're respectful in that viewpoint so
that we're not undermining
either side of the revenue funnel.
(01:13:51):
And again, with
decoration, it's a lot of fun.
There's a lot of space.
So a lot of different segments where you
can penetrate very
effectively where everybody wins.
You also sell on
Amazon, you sell on eBay.
How do those marketplaces kind of fall
into your omnichannel strategy?
They're emerging and they're important
(01:14:13):
because they're also very
profitable for us as well,
especially in the film by a vendor once
where you go out with an MSRP strategy
and then do some revenue sharing
downstream being vertically integrated
with the product as a manufacturer.
It's a winning strategy for us.
So it's growing.
It's one of the fastest
(01:14:33):
e-commerce segments we have.
It also falls into our pipeline or direct
fulfillment, which
helps feed the machines
and really solidify the back end that
we've built, which we're very proud of.
That's great.
So I like to ask people what they're
wearing, so to speak.
So let's talk a little bit about what's
in your e-commerce tech stack?
(01:14:56):
Well, it's a long list.
Too many to name offhand.
But e-commerce is our platform.
SAP is our enterprise management system.
We also have some homegrown technology
stacks and product
information systems and such.
(01:15:18):
So yes, you use a PIM, I think
you use In River as your PIM.
That's correct.
That's correct.
And with the decorated products, we did a
lot of custom
development inside that platform.
Clavia was our email provider.
And we used to search
spring and drawing blanks.
(01:15:39):
No, it's OK.
It's Klarna and 99 Minds for loyalty.
You stan for reviews and ratings.
Avalara on the tech side.
And then I think Happy Returns on the--
Happy Returns, one of our favorites.
That was a big one first.
So I mean, that's a great
little tech stack there.
And quite frankly, many of those players
are common that we come across for
(01:16:01):
mid-market customers
like Cutter.
So people are always
curious of what others are using.
And I think you've got a great
representation of some of the top players
within the marketplace.
Where do you see direct-to-consumer kind
of going and evolving in 2024 and beyond?
(01:16:24):
Well, our direct-to-consumer, I think you
mean, we see exponential
growth over the next several years.
Our fan shop, part of the store, is going
to drive a lot of that growth.
Every time we introduce a new product, a
(01:16:45):
new series, it exponentially morphs into
tens of thousands of SKUs.
So what's really exciting, and each one
of those have a target to
an end user slash consumer.
So through the decoration capabilities we
have, every product we introduce
exponentially expands out into a super
(01:17:06):
base that drives the sales.
Hunting that down, managing that,
expanding those catalogs and collections,
building stores within stores,
and continue to chase down the affinity
marketplace is really the dream.
Because it allows us to do that cost
effectively versus using influencers or
(01:17:26):
the type of high priced consumer
acquisition strategies
that other brands do.
I know that B2B commerce is also a
significant focus of yours. How are you
investing in that in 2024 and 2025?
Which is really cool. That's a great
question because B2B e-commerce is, if
(01:17:51):
you look back, it's where consumer
e-commerce was 20 years ago.
So now we have these corporate giant,
distributor giants, that are now
investing in e-commerce and getting their
technology stacks in place
and getting their platforms,
so they're becoming EDI ready. And with
the emergence of the web store and the
(01:18:13):
company's company online store and book
and run stores that are
all morphing to online,
we're really well positioned to do
integrated workflows, print product on
demand, provide no inventory solutions,
similar to what we're doing in the AMI on
the retail side of the corporate. And
it's super exciting.
We feel that it's going to be a major
(01:18:34):
growth factor for us and the industry.
And we provide a solution that's already
been proven with our
success in the retail space.
And now we're used to delivering that for
the corporate distributor as well.
And so we're doing actual integrations
now with major players using promo
standards as a mechanism, EDI, leveraging
with price stores and other platforms.
(01:18:54):
And we're on to hunt for
more and more and more.
How have your field reps reacted to
leveraging the B2B online tools? Are they
kind of pushing back or are they kind of
in lockstep with that change?
They're in lockstep. Initially, they
couldn't spell API. So what we've done is
(01:19:16):
we've built an infrastructure internally
to where all they have to
do is solve the problem,
answer any questions and then make a call
and we come in support.
So we fund that clarity.
We have a very disciplined go-to-market
strategy that's very high leverage.
We're selling the platform as well as the
(01:19:36):
garments, which is just find the right
source and solution, whether it's
shipping to a warehouse, shipping to end
users, doing direct fulfillment or doing
some type of integration.
And we have it down to where it's really
easy and seamless and they're super
stoked. They see a new way forward.
That's great. Over my time here at Grove,
(01:19:57):
I've been asked to speak multiple times
at national sales meetings
to salespeople to talk about,
B2B, e-commerce, what are all the pieces
of that? What are CRM?
And so sometimes those can be very
daunting conversations to get people
bought in and kind of moving it forward.
But I will tell you, it's much better to
take an order online than it is to take
(01:20:18):
it over the phone these days.
Absolutely.
And it's much like, because people that
buy often want to buy at midnight or well
after hours and you're just creating an
opportunity for them to engage and do
what they need to do
when they want to do it.
I may just pile on that. So several years
ago, we made a commitment for
(01:20:40):
sustainability and 90 percent of our
products are sustainable.
We have sustainable operations,
sustainable production
and sustainable products.
But part of that commitment is we went
digital. So we have no
more printed catalogs.
We are B2B Salesforce and our customers
rely on our B2B platform,
(01:21:00):
CBcorporate.com, to browse, check
inventory, place products.
So we're worthy on that. We found great
efficiency, enhanced profitability,
better user experience.
Just it's just amazing the breakthroughs
we've had by making
that digital commitment.
Well, that's cool. I mean, you know, I've
(01:21:21):
always really respected your you've
always been a change
maker and a disruptor.
And I've always respected that about you,
especially if you come prepared with data
and are able to explain your point of
view and the opportunity available.
So, you know, where are you looking next
for those types of opportunities?
(01:21:44):
Well, it's more more we want more as a
general statement to respond to that.
So anything that aligns with our flight,
we want to lean in heavily.
So this digital
engagement is really the key.
So as you know, I challenge your team and
the D2C and I
challenge our team internally.
(01:22:05):
It's how do we reach more? How do we
reach more consumers? How
do we reach more end users?
So our sales objective, starting with
objective and key results, starts with
more customers, more orders
and protect profitability.
That's our game plan. So what we see is
how do we cascade that down into
particular strategies to go develop those
(01:22:27):
particular marketplaces so that they roll
up to the win, which is our
profitable growth objective.
So where that's going to come from, we're
going to continue to lean in on
technology to help us get there.
I think the idea of microsites and
infinity stores is something that should
be on the table for us.
(01:22:47):
Better ways for our buyers to browse and
purchase is always something we want.
And continuing to enhance our email
marketing and segmentation strategies is
also is on the table on the short list of
things we need to do.
Understanding exactly who the customer
is, what they do, how they go to market,
(01:23:07):
how we can support is
really a point of effort for us.
It's always important to know your
customer in this process. Speaking of
roll ups, you're a part of New Wave Group
and International Roll Up of Brands.
How does Cutter & Buck
fit into that conglomerate?
Yes, it's been a really great opportunity
(01:23:29):
for us to have New Wave
Group as our owner group.
And they see us as a great investment
because we've been
profitable and well run.
Our CEO, I would say, is one of the
smartest, most guys I
know have ever worked for it.
And we are the largest company in the
(01:23:51):
portfolio in the US and probably one of
the more profitable ones in the group.
Crafts, sportswear is another great brand
in the portfolio as well as a head hat.
So some great brands in the portfolio.
Everybody gets along.
(01:24:11):
It's a culture of collaboration between
the companies, which is amazing to see.
And the board is super supportive.
So they're not telling us what to do.
They're just
encouraging and always supportive.
So it's worked out really
well from my perspective.
Very, very cool. Very cool.
And very respected brands in their craft
is also a fantastic brand as well.
(01:24:33):
How did you make your way
into the apparel business?
Interesting.
So I started in hard goods
and eventually got into apparel.
Kind of snuck in.
One of the companies I worked with was a
(01:24:55):
back end provider for print on demand,
which was really cool.
That experience taught me everything
about getting single
orders out the door fast.
So if you think about personalized
calendars and postcards and Thanksgiving
and you're inside that print factory and
you see those orders that are coming in
in the thousands and thousands of going
(01:25:16):
out 12 hours later, that's life changing.
That is career change.
And that experience then led me to work
for a company called Prep Sportswear,
which was an online aggregator of high
school apparel and other type of affinity
groups and had a print on demand model.
So that was my first tapes into apparel.
(01:25:37):
Then I worked for a company called
Teamwork Athletic Apparel out of San
Diego that did team uniforms, but with a
similar model of go it with sublimation,
which is another on
demand decoration technique.
And so I went from, you know, basically
swags fan wear to uniforms to a lifestyle
brand called Connor and Buck.
(01:25:58):
And that was about a 10 year journey.
And you went from sun to rain.
Yes, I did.
To the Pacific Northwest.
Yes, I did.
Yes, I did.
As I did.
I followed the money, though.
That was good.
That is good.
And Seattle is a
fantastic place to live overall.
Well, that's cool to
hear your story like that.
(01:26:19):
We all have, you know, it's
it's it's a journey, right?
I'd like to tell my staff it's, you know,
it's not getting to the end.
It's about the journey that makes it that
makes it worthwhile.
So very true.
So if you had one tip for somebody
looking to lead omni channel sales for a
mid market organization,
what would what would be the one tip that
you would that you would tell them to
(01:26:41):
think about while
they're on this journey?
Well, I would give them the tip of
finding a best
practice for managing teams.
And we engage in a high output management
methodology that is practiced and
(01:27:02):
executed and deployed by every team and
internal and whether they're sales or
operations or customer
service or development.
And that is we we we practice that, which
has been very helpful in the omni channel
environment to have a common language
between collaborators and groups.
(01:27:23):
It also has provided us a platform that
has been able to communicate our
objectives to where the lowest front
line, not lowest, the frontline employee
understands what we're doing.
That has been a breakthrough for us.
And that's a tip. If you can find a way
to help your team top to bottom have
(01:27:44):
clarity, perfect clarity of what you're
doing, what we're doing as a company
together during where you're most likely
changing the business environment and the
business model on the fly.
That's that would be my tip.
And once you do that, people you'll get
great productivity, having your employees
(01:28:04):
and better outcomes.
Fantastic, fantastic. And thank you so
much for for sharing that with us.
I definitely appreciate your time and
thank you so much for for joining us
today, telling us your story, telling us
about about the brand and what you're
doing from a direct to consumer.
(01:28:25):
You know, I think our listeners will
really appreciate what you have to say.
Thank you, Ethan. Great.
Where can people find you online?
I'm on LinkedIn and that's probably the
platform where you'll find me most.
And I do post and try to
say interesting things.
I mean, on that. So it's that's where
(01:28:47):
where's why you find me.
It's great. Thank you. And for people
that are interested in cutter and buck,
they can find you at cutter buck.com.
That's right. Please. All right, Dave,
thank you again for joining us.
And I look forward to speaking to you
again soon. Take care. Bye bye.
(upbeat music)
Welcome to the
E-commerce Masters Podcast,
the platform where we
delve into the stories
and strategies of
e-commerce trailblazers.
I'm your host, Ethan Gippen,
and today we have the
pleasure of welcoming
another remarkable guest to our show.
Joining us today is Dave Santiago,
Vice President of Ami
(01:00:20):
Channel and Corporate Sales
for Cutter & Buck, a
premium apparel brand
that offers products for golf, sports,
and lifestyle consumers.
He has over 20 years of experience
in consumer packaged goods, soft wines,
and digital online sectors,
where he has consistently
delivered revenue growth,
profitability, and customer satisfaction.
(01:00:40):
Dave is one of my favorite
change makers and disruptors,
and we are honored to work with him
as a longtime client here at Groove.
Welcome to the show, Dave.
- Thank you, pleasure to be here.
- It's great to have you.
So excited to have you here today.
So let's dive right into things,
and if you could just
tell us a little bit more
about Cutter & Buck
and the types of products
(01:01:01):
that you sell as a whole.
- Well, Cutter & Buck
is a brand and a company
founded in the Pacific
Northwest Seattle area.
We've been around for about 30 years.
During that time, the
brand and the company
has gone through several iterations.
We pride ourselves on making products
that are designed to be
(01:01:22):
a consumer's favorite,
so the bar's pretty high.
So that really means
something to us internally.
We go to market as a
brand and apparel brand
as an at-ones company, so
we're a little bit different.
When we develop a product
and introduce a product,
it's long-lasting for three
to five years at a minimum,
which works out well for e-commerce.
And we're very heavily involved
(01:01:47):
in lifestyle products in general,
with our roots coming
out of the golf industry
way back when.
The brand itself and its application
and how we design the market products
has evolved to a more of
a lifestyle premium brand.
- That's cool.
I absolutely love my Cutter & Buck vest.
So one of the great
things about what you do
is kind of corporate branded apparel.
(01:02:10):
And so I'm lucky enough
to have a great groove
Cutter & Buck vest
that you will find on me
until the weather gets
usually below 45 or 40 degrees.
I'm rocking the vest, right?
I also want to look like I fit in
the kind of private
equity world of things too
with that when I go to events.
(01:02:31):
- That's great.
Yeah, I know.
We're glad you love it.
A lot of people do.
It's exciting to be engaged with
consumers at trade shows.
And we participate in the
major PGA merchandising test
where it's really cool
to come see and engage
with all the fans that
can identify the brand
(01:02:52):
and they say, "Hey, my
dad bought the product,
"I buy the product, my son buys the
product, and I love it."
So that's real feedback that we're very
proud of and cherish.
- So speaking of golf,
and then you do have a
wide diversity of products,
who is your target market
and what's kind of the
overall corporate revenue
for Cutter & Buck?
(01:03:13):
- The target market is
ages of 35 to 55 mainly.
Average income,
household incomes of 75,000 more.
We do about 80% of our
business in men's apparel,
20% for women, but we
know that the percentages
of women actually buying
(01:03:33):
and purchasing is much,
much higher than the
20%, which is what we love.
The overall revenue US for Cutter & Buck
is about 150 million this year.
In Canada, it's another 20 to 25 million.
We also have our global
sales of Cutter & Buck
is approaching 200 to
(01:03:54):
250 million in 2024.
That's where we're at.
- All right, so what is
the VP of Omni Channel
and Corporate Sales encompass?
What is, it's a very, very
broad umbrella of a role.
Like how are you,
are you touching
literally everything sales-wise
(01:04:15):
that comes into the organization?
- Yes, it is.
We have a very
consumer-centric view and end user view,
which is a terminology that's
interchangeable to us.
So a corporate end user would be our
customer's customer.
So a distributed salesperson
will be presenting products
for a program or for a
company apparel store
and the end user would
actually be the employee.
(01:04:37):
On the flip side, Omni Channel,
it's truly the consumer
target is the end up end consumer.
And the way we see our
go-to-market strategy
is everything we do is
about creating great products
and solutions for the
end user and consumer,
leveraging the
platforms of our B2B partners,
whether it be retail, brick
(01:04:57):
and mortar, golf, on course,
off course, corporate
distributors, on and on and on.
So we develop products
that we believe will appeal
and apply to all channel
end users and consumers.
And that's how we have
developed our development,
our what we call our
market-winning product strategy.
(01:05:19):
And we buy our inventory and
we configure our supply chain.
My role is to oversee
the go-to-market strategies
in all those channels.
I oversee all the sales,
the entire sales force,
including our D2C strategy as well.
It's a really cool role to
play because it's never dull.
And it's all about engaging consumers
(01:05:41):
and making sure that the our
products are getting front,
engaging the consumers again
in front of those consumers
on effectively and efficiently.
So you began your role back in 2016
as license apparel director.
What has kind of been the evolution
of the license apparel
opportunities at Cutter?
So it's been very exciting,
(01:06:03):
but like in retail itself,
the license apparel
industry is consolidated
to some power players,
some super power players.
And we are mainly
fanatics and other major players.
So when I started the campus retail,
which was bookstores were major players,
major contributors dominated
in what we call NCAA apparel.
(01:06:25):
Since then, the
penetration of that market
has been somewhat less and it's been gone
to an online product
acquisition by consumers.
So there's been a
shift in buying behavior
that has really been interesting and
that's true to the space,
but also it's played out just like any
other retail sectors
had years prior, whether it
was selling buying hammers
(01:06:46):
or the major players have come
consolidated, gone away.
And same with the
license apparel industry.
So the way we reach products today,
and consumers today is
really with both in-store
team franchises, brick and mortar retail,
but the online engagement is dominating
(01:07:07):
and that's what's
emerging to be the real play.
So you talk about fanatics a bit and
that's a great opportunity.
So when you sell a
licensed product through fanatics
and they resell your
products, is that being delivered?
Is that being dropshipped
by you in that transaction?
(01:07:28):
In 2017, when I was 16
when we started and I started,
less than 20% of the products was
fulfilled by Köner & Bach.
Now 100% of the product and orders are
being fulfilled by Köner & Bach.
So what that has done is opened our eyes
to the value of no
inventory turnkey solution
(01:07:49):
that we can provide an entire industry as
a real value proposition.
And having been in the game for so long,
the conundrum called
inventory for any retailer
has been really a real
barrier for success for many.
Buying the right inventory,
holding the right inventory,
having enough inventory has been really
(01:08:09):
the holy grail for retail.
So having a partner like Köner & Bach
that can actually own the inventory,
fulfilling one day for blank orders,
decorate on demand in 29
hours for a decorated product
is a real value
proposition to the industry.
And that's our go to
mark, that's our secret sauce.
(01:08:30):
And so for our listeners, to kind of
break that down a little bit lower,
if I order a Baltimore Orioles jacket or
a Baltimore Orioles golf shirt,
it's your product that it's
embroidered with that logo.
You actually embroider that on demand in
about 29 hours and get that out the door.
Yes, for EDI integrated partners, we do
(01:08:51):
that, that's exactly right.
So everything's production ready and we
have a whole workflow
of syndicating the products online,
getting them to get
the orders to EDI feeds,
they go right to the embroidery machines.
I think that is so cool, by the way,
and just the speed at which
you're able to produce that
and get that out to the customer.
(01:09:12):
You've got licensing agreements with
Major League Baseball,
Minor League Baseball, you've got NFL,
you've got Collegiate.
What's kind of next
in terms of licensing?
Where do you think licensing is going?
Do you think you're going to
continue to add and evolve?
Or do you think you kind of
have your core four there?
No, we're in the
application process all the time.
(01:09:35):
We hope to be
considered by the NBA this year.
We're actually in the
application process there,
which we're super excited about.
And we want to continue to add.
We would love to be a
Formula One licensee.
We would love to
continue to add our portfolio.
So we love the play, we love the
opportunity to add the
(01:09:56):
licenses with our brand.
We believe that is a strategy that's just
mutually beneficial,
and we want more.
So do you think that the personalized
products or the print,
the decorate on demand products have
really kind of driven and pushed
your
direct-to-consumer growth of the things
you sell directly through cutterbuck.com?
(01:10:17):
Absolutely, absolutely on many levels.
Just from a consumer reach,
NFL fans outnumber cutterbuck fans.
So being able to leverage
that audience and really make
a compelling offering
for that consumer base,
(01:10:38):
and then we just repeat over the
different channels of
fan bases and affinities.
It also plays in the golf space too.
We are a licensee for
PGA and on and on and on.
So out of all of the license options that
have kind of come out during your watch,
do you have a favorite product or kind of
(01:11:00):
theme or team of your favorite product?
I asked a similar question to a friend of
mine who owns a car dealership.
I said, "What's your favorite car?"
He said, "The one leaving
the park, leaving the lot."
So the ones that are selling the most are
my favorite, actually.
(01:11:21):
I think trans-ationally.
And to be honest with you, prior to
getting into the licensing business,
I had a favorite team, but now really I'm
really in praying for the winner.
Yeah, no, that's great.
No, that's great.
I think a true capitalist.
I appreciate that opinion.
One of the things I think
that I've seen in terms of,
(01:11:43):
I think we've been working together since
about 2016 or so is,
when we started, a direct-to-consumer was
not as prioritized
within the organization.
I hate to call it a hobby, but it seemed
like it was kind of a beta test of,
"Hey, can we sell direct and we probably
(01:12:03):
just need to do it."
How have you created change within the
organization for it to become a much
higher focus where your CEO is involved
at times in conversations and it's now
an important part of what
your overall sales strategy is?
Well, we flipped the
switch on our perception on DSC.
(01:12:26):
When we realized that
there was a path forward,
we could actually grow the
business cost-effectively
and not build empires to support a
business that wasn't performing.
So we're lean and mean in our
organization internally,
and we are really, really funding success
(01:12:46):
and really just building out
our business cost-effectively first with
a great part of Lightproof.
But also, we're seeing the value of the
margins in a direct-to-consumer basis,
and we see the value of those
transactions over B2B host sale.
So it's a big strategic win for us to
really grow that business
as a center total sales.
(01:13:09):
We have a desire to have that segment of
the revenue funnel be
15 percent of our
total sales in five years.
Wow. That is a fantastic goal,
and I really commend you on that.
Have you seen your wholesale customers
push back on any of this
strategy at all in the process?
(01:13:29):
Initially, early on, we'd get an
occasional call and we
would always do the right thing.
But no, it's actually leveled out to
where we've been very
disciplined in our pricing strategy,
and we're respectful in that viewpoint so
that we're not undermining
either side of the revenue funnel.
(01:13:51):
And again, with
decoration, it's a lot of fun.
There's a lot of space.
So a lot of different segments where you
can penetrate very
effectively where everybody wins.
You also sell on
Amazon, you sell on eBay.
How do those marketplaces kind of fall
into your omnichannel strategy?
They're emerging and they're important
(01:14:13):
because they're also very
profitable for us as well,
especially in the film by a vendor once
where you go out with an MSRP strategy
and then do some revenue sharing
downstream being vertically integrated
with the product as a manufacturer.
It's a winning strategy for us.
So it's growing.
It's one of the fastest
(01:14:33):
e-commerce segments we have.
It also falls into our pipeline or direct
fulfillment, which
helps feed the machines
and really solidify the back end that
we've built, which we're very proud of.
That's great.
So I like to ask people what they're
wearing, so to speak.
So let's talk a little bit about what's
in your e-commerce tech stack?
(01:14:56):
Well, it's a long list.
Too many to name offhand.
But e-commerce is our platform.
SAP is our enterprise management system.
We also have some homegrown technology
stacks and product
information systems and such.
(01:15:18):
So yes, you use a PIM, I think
you use In River as your PIM.
That's correct.
That's correct.
And with the decorated products, we did a
lot of custom
development inside that platform.
Clavia was our email provider.
And we used to search
spring and drawing blanks.
(01:15:39):
No, it's OK.
It's Klarna and 99 Minds for loyalty.
You stan for reviews and ratings.
Avalara on the tech side.
And then I think Happy Returns on the--
Happy Returns, one of our favorites.
That was a big one first.
So I mean, that's a great
little tech stack there.
And quite frankly, many of those players
are common that we come across for
(01:16:01):
mid-market customers
like Cutter.
So people are always
curious of what others are using.
And I think you've got a great
representation of some of the top players
within the marketplace.
Where do you see direct-to-consumer kind
of going and evolving in 2024 and beyond?
(01:16:24):
Well, our direct-to-consumer, I think you
mean, we see exponential
growth over the next several years.
Our fan shop, part of the store, is going
to drive a lot of that growth.
Every time we introduce a new product, a
(01:16:45):
new series, it exponentially morphs into
tens of thousands of SKUs.
So what's really exciting, and each one
of those have a target to
an end user slash consumer.
So through the decoration capabilities we
have, every product we introduce
exponentially expands out into a super
(01:17:06):
base that drives the sales.
Hunting that down, managing that,
expanding those catalogs and collections,
building stores within stores,
and continue to chase down the affinity
marketplace is really the dream.
Because it allows us to do that cost
effectively versus using influencers or
(01:17:26):
the type of high priced consumer
acquisition strategies
that other brands do.
I know that B2B commerce is also a
significant focus of yours. How are you
investing in that in 2024 and 2025?
Which is really cool. That's a great
question because B2B e-commerce is, if
(01:17:51):
you look back, it's where consumer
e-commerce was 20 years ago.
So now we have these corporate giant,
distributor giants, that are now
investing in e-commerce and getting their
technology stacks in place
and getting their platforms,
so they're becoming EDI ready. And with
the emergence of the web store and the
(01:18:13):
company's company online store and book
and run stores that are
all morphing to online,
we're really well positioned to do
integrated workflows, print product on
demand, provide no inventory solutions,
similar to what we're doing in the AMI on
the retail side of the corporate. And
it's super exciting.
We feel that it's going to be a major
(01:18:34):
growth factor for us and the industry.
And we provide a solution that's already
been proven with our
success in the retail space.
And now we're used to delivering that for
the corporate distributor as well.
And so we're doing actual integrations
now with major players using promo
standards as a mechanism, EDI, leveraging
with price stores and other platforms.
(01:18:54):
And we're on to hunt for
more and more and more.
How have your field reps reacted to
leveraging the B2B online tools? Are they
kind of pushing back or are they kind of
in lockstep with that change?
They're in lockstep. Initially, they
couldn't spell API. So what we've done is
(01:19:16):
we've built an infrastructure internally
to where all they have to
do is solve the problem,
answer any questions and then make a call
and we come in support.
So we fund that clarity.
We have a very disciplined go-to-market
strategy that's very high leverage.
We're selling the platform as well as the
(01:19:36):
garments, which is just find the right
source and solution, whether it's
shipping to a warehouse, shipping to end
users, doing direct fulfillment or doing
some type of integration.
And we have it down to where it's really
easy and seamless and they're super
stoked. They see a new way forward.
That's great. Over my time here at Grove,
(01:19:57):
I've been asked to speak multiple times
at national sales meetings
to salespeople to talk about,
B2B, e-commerce, what are all the pieces
of that? What are CRM?
And so sometimes those can be very
daunting conversations to get people
bought in and kind of moving it forward.
But I will tell you, it's much better to
take an order online than it is to take
(01:20:18):
it over the phone these days.
Absolutely.
And it's much like, because people that
buy often want to buy at midnight or well
after hours and you're just creating an
opportunity for them to engage and do
what they need to do
when they want to do it.
I may just pile on that. So several years
ago, we made a commitment for
(01:20:40):
sustainability and 90 percent of our
products are sustainable.
We have sustainable operations,
sustainable production
and sustainable products.
But part of that commitment is we went
digital. So we have no
more printed catalogs.
We are B2B Salesforce and our customers
rely on our B2B platform,
(01:21:00):
CBcorporate.com, to browse, check
inventory, place products.
So we're worthy on that. We found great
efficiency, enhanced profitability,
better user experience.
Just it's just amazing the breakthroughs
we've had by making
that digital commitment.
Well, that's cool. I mean, you know, I've
(01:21:21):
always really respected your you've
always been a change
maker and a disruptor.
And I've always respected that about you,
especially if you come prepared with data
and are able to explain your point of
view and the opportunity available.
So, you know, where are you looking next
for those types of opportunities?
(01:21:44):
Well, it's more more we want more as a
general statement to respond to that.
So anything that aligns with our flight,
we want to lean in heavily.
So this digital
engagement is really the key.
So as you know, I challenge your team and
the D2C and I
challenge our team internally.
(01:22:05):
It's how do we reach more? How do we
reach more consumers? How
do we reach more end users?
So our sales objective, starting with
objective and key results, starts with
more customers, more orders
and protect profitability.
That's our game plan. So what we see is
how do we cascade that down into
particular strategies to go develop those
(01:22:27):
particular marketplaces so that they roll
up to the win, which is our
profitable growth objective.
So where that's going to come from, we're
going to continue to lean in on
technology to help us get there.
I think the idea of microsites and
infinity stores is something that should
be on the table for us.
(01:22:47):
Better ways for our buyers to browse and
purchase is always something we want.
And continuing to enhance our email
marketing and segmentation strategies is
also is on the table on the short list of
things we need to do.
Understanding exactly who the customer
is, what they do, how they go to market,
(01:23:07):
how we can support is
really a point of effort for us.
It's always important to know your
customer in this process. Speaking of
roll ups, you're a part of New Wave Group
and International Roll Up of Brands.
How does Cutter & Buck
fit into that conglomerate?
Yes, it's been a really great opportunity
(01:23:29):
for us to have New Wave
Group as our owner group.
And they see us as a great investment
because we've been
profitable and well run.
Our CEO, I would say, is one of the
smartest, most guys I
know have ever worked for it.
And we are the largest company in the
(01:23:51):
portfolio in the US and probably one of
the more profitable ones in the group.
Crafts, sportswear is another great brand
in the portfolio as well as a head hat.
So some great brands in the portfolio.
Everybody gets along.
(01:24:11):
It's a culture of collaboration between
the companies, which is amazing to see.
And the board is super supportive.
So they're not telling us what to do.
They're just
encouraging and always supportive.
So it's worked out really
well from my perspective.
Very, very cool. Very cool.
And very respected brands in their craft
is also a fantastic brand as well.
(01:24:33):
How did you make your way
into the apparel business?
Interesting.
So I started in hard goods
and eventually got into apparel.
Kind of snuck in.
One of the companies I worked with was a
(01:24:55):
back end provider for print on demand,
which was really cool.
That experience taught me everything
about getting single
orders out the door fast.
So if you think about personalized
calendars and postcards and Thanksgiving
and you're inside that print factory and
you see those orders that are coming in
in the thousands and thousands of going
(01:25:16):
out 12 hours later, that's life changing.
That is career change.
And that experience then led me to work
for a company called Prep Sportswear,
which was an online aggregator of high
school apparel and other type of affinity
groups and had a print on demand model.
So that was my first tapes into apparel.
(01:25:37):
Then I worked for a company called
Teamwork Athletic Apparel out of San
Diego that did team uniforms, but with a
similar model of go it with sublimation,
which is another on
demand decoration technique.
And so I went from, you know, basically
swags fan wear to uniforms to a lifestyle
brand called Connor and Buck.
(01:25:58):
And that was about a 10 year journey.
And you went from sun to rain.
Yes, I did.
To the Pacific Northwest.
Yes, I did.
Yes, I did.
As I did.
I followed the money, though.
That was good.
That is good.
And Seattle is a
fantastic place to live overall.
Well, that's cool to
hear your story like that.
(01:26:19):
We all have, you know, it's
it's it's a journey, right?
I'd like to tell my staff it's, you know,
it's not getting to the end.
It's about the journey that makes it that
makes it worthwhile.
So very true.
So if you had one tip for somebody
looking to lead omni channel sales for a
mid market organization,
what would what would be the one tip that
you would that you would tell them to
(01:26:41):
think about while
they're on this journey?
Well, I would give them the tip of
finding a best
practice for managing teams.
And we engage in a high output management
methodology that is practiced and
(01:27:02):
executed and deployed by every team and
internal and whether they're sales or
operations or customer
service or development.
And that is we we we practice that, which
has been very helpful in the omni channel
environment to have a common language
between collaborators and groups.
(01:27:23):
It also has provided us a platform that
has been able to communicate our
objectives to where the lowest front
line, not lowest, the frontline employee
understands what we're doing.
That has been a breakthrough for us.
And that's a tip. If you can find a way
to help your team top to bottom have
(01:27:44):
clarity, perfect clarity of what you're
doing, what we're doing as a company
together during where you're most likely
changing the business environment and the
business model on the fly.
That's that would be my tip.
And once you do that, people you'll get
great productivity, having your employees
(01:28:04):
and better outcomes.
Fantastic, fantastic. And thank you so
much for for sharing that with us.
I definitely appreciate your time and
thank you so much for for joining us
today, telling us your story, telling us
about about the brand and what you're
doing from a direct to consumer.
(01:28:25):
You know, I think our listeners will
really appreciate what you have to say.
Thank you, Ethan. Great.
Where can people find you online?
I'm on LinkedIn and that's probably the
platform where you'll find me most.
And I do post and try to
say interesting things.
I mean, on that. So it's that's where
(01:28:47):
where's why you find me.
It's great. Thank you. And for people
that are interested in cutter and buck,
they can find you at cutter buck.com.
That's right. Please. All right, Dave,
thank you again for joining us.
And I look forward to speaking to you
again soon. Take care. Bye bye.
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