[E-Business/Business Development/Marketing & Selling]
Case Study: Timbuk2 Designs
Hed: Success Is In the Bag
Deck: Using the Web to Enable Customer-Designed Backpacks
Summary: Timbuk2 Designs, a manufacturer of custom-designed backpacks, felt
traditional retail outlets were keeping it from delivering its products to consumers. So the
company created an online tool that lets users design one-of-a-kind bags.
Pull quote: “We thought that developing software to make it easier for consumers to pick
their own colors, fabric and options made a lot of sense.” -- Jordan Reiss, VP, Timbuk2
Designs
Frustration with the old-fashioned sales style in traditional brick-and-mortar stores turned
out to be the key to Timbuk2's success. No matter what they tried, the San Francisco
backpack maker was unable to get its retail outlets to sell its custom-made products
properly. So despite an initial lack of money and technical know-how, Timbuk2
revolutionized its business with a Web-based system that lets customers design their own
bags, place the orders and have them shipped the same day.
“It was really our frustration in dealing with traditional retailers that made us decide to
add e-commerce capabilities to our Web site," says Timbuk2 VP Jordan Reiss. The
company spent ten years developing a network of retailers to sell its products, but
couldn’t get those retailers to let consumers know they could design their own bags. "So
we thought it made sense to develop software that lets consumers pick their own colors,
fabric and options.”
Despite worries about alienating its traditional retailers, Timbuk2 launched BagBuilder
on its Web site in October 1999; it now accounts for 30 to 40 percent of all orders. And
since that figure is increasing by about 25 percent each month, Reiss expects Timbuk2 to
make about $3 million in BagBuilder sales in 2001, which would be more than the firm
made all of last year without the e-commerce channel. “This could basically double the
size of our business from where we were without it,” he says.
BagBuilder is a great feature, but it isn’t the only secret to Timbuk2’s e-commerce
success says Patricia Seybold, e-commerce industry expert and author of The Customer
Revolution: How to Thrive When Customers are in Control (due out in April from Crown
Books).
“I think Timbuk2's success is due to a combination of their lean manufacturing model
and the ability for end users to customize on the Web,” says Seybold. “There’s no point
in having a sexy configuration on your Web site if you can’t actually deliver a custommanufactured product. Timbuk2 is the first company in the U.S. apparel business to offer
custom-manufactured products, a customized Web front end and the ability to make that
product in 15 minutes and ship it out that night."
How it Works
The appeal of creating the bag of your dreams coupled with BagBuilder's ease of use is
very attractive to consumers, says Reiss. To design their ideal backpack, customers
simply log onto Timbuk2’s Web site and navigate through five simple steps, which are
enhanced with animations, illustrations and explanations.
First, users select one of four sizes. To give them some perspective, an image of a guy
wearing all four sizes is provided. Then backpackers must decide between wax cotton
canvas and a synthetic fabric. Next, users are faced with the hardest part of the process –
choosing a color combination. “There are more than 4,000 color combinations,” says
Reiss. Users can then select any of five sewn-in features like dividers and reinforced
bottoms. Finally, the prospective back-packer chooses attachable accessories, including
cell phone holsters and strap pouches.
As the customer designs a backpack, the BagBuilder software recalculates a running
total. A bare-bones bag can be had for $50; the largest one, loaded to the gills, will cost
$183. Reiss says the average price of a custom-designed bag is $75 to $85.
It Wasn't Always in the Bag
While it may seem like Timbuk2's merge onto the information superhighway was
painless, it’s hasn't been that smooth a ride.
From the start, the company was hobbled by a lack of financial and technical resources
for software development. “We needed to create an entire program from scratch, but we
only had a budget of $50,000 and we didn’t have any in-house technical know-how,”
says Reiss.
Using the small amount of cash it had, Timbuk2 hired a Web-design firm to build a
prototype BagBuilder without e-commerce functionality. It ran the limited prototype on
their site to let customers try BagBuilder on for size. People liked the idea, so Timbuk2
raised about $1 million in outside financing to hire a small in-house technology team to
give BagBuilder full e-commerce capability.
With BagBuilder up and running, Timbuk2's next challenge was figuring out how to use
it without ticking off their retailers. They eventually decided to let both Web and brickand-mortar retailers use the software free of charge.
Timbuk2 is still in the process rolling out BagBuilder to different retailers in different
ways. The first method gives e-tailers a custom-order link from their site to BagBuilder
on Timbuk2’s. Visitors place their customized orders directly with Timbuk2. However,
any other shopping the customer wants to do with the retailer will have to be a separate
transaction.
Currently, the BagBuilder link is available on only a few e-commerce sites, including
Webcyclery.com and Snowtraders.com. Reiss says Timbuk2 is working with some of its
larger e-tailors to install the technology.
The next type of retailer integration, which is more difficult from a cost standpoint, is
placing interactive displays in retail outlets. “Having the physical products there so
consumers can see the sizes, fabrics and colors, but then giving them the ability to place a
custom order directly to us through an in-store display is the perfect environment for
this,” says Reiss.
This method is being used at The Spokesman Bicycles in Santa Cruz, Calif. Owner
Michael Moore says signs in his shop direct customers to a laptop running the
BagBuilder software. The results have been “huge and fantastic,” says Moore. The shop
has sold as many bags in the two months it’s been testing the software as it did in all of
last year.
“Allowing customers to see the bags in person, but giving them the ability to manifest
their own ideas about color and options has allowed people to close the sale themselves,”
says Moore. “Rather than thinking about it and walking away with a catalog, they were
able to create it and purchase it right then and there.”
Strapping On a Direct Relationship
In addition to increasing sales and pleasing retailers, the BagBuilder has provided
Timbuk2 with a tighter-run operation and the ability to communicate directly with its
customers.
“Since the consumer places the order, and it goes directly into production, (BagBuilder)
is a more cost-efficient way of taking orders," says Reiss. Before going on line, Timbuk2
staffers took orders by phone and fax, and recorded them by hand -- with the inevitable
errors. "The more orders we have placed by the customer, the fewer errors we have, and
the more efficient we can be," he says.
Timbuk2 is also using direct customer contact to improve and expand its product line.
“Prior to doing this, we didn’t have a direct feedback channel from the people who were
actually using our bags because we mostly sold to retailers,” says Reiss. “But the Internet
has provided us with a direct link to our customers and we are getting feedback from
people around the world telling us what they like and don’t like, as well as people
providing design advice and product recommendations.
“We are amassing a wealth of consumer information," he says, "that is directing us on
where we’re going to take our business.”
At a Glance
Company name: Timbuk2 Designs
URL: www.timbuk2.com
Location: San Francisco
Founded: 1989
Founder: Rob Honeycutt
Employees: 40
Revenue: About $5 million
Related Links
<a href="http://www.timbuk2.com">Timbuk2 Designs</a>
<a href="http://www.spokesmanbicycles.com">The Spokesman Bicycles</a>
<a href="http://www.webcyclery.com">Web Cyclery.com</a>
<a href="http://www.snowtraders.com">Snow Traders.com</a>
<a href="http://www.psgroup.com">Patricia Seybold</a>
SOURCES
Jordan Reiss
Vice president
Timbuk2 Designs, Inc.
San Francisco, CA
415-252-4300 x 15
Jordan@timbuk2.com
Mike Moore
Owner
The Spokesman Bicycles
Santa Cruz, CA
mike@spokesmanbicycles.com
831-429-6062
Patricia Seybold
Author of The Consumer Revolution
pseybold@psgroup.com