Tilley—Hats Off to a Great Company_

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					Case Study 7
Tilley—Hats Off to a Great Company!

Communication in Process

Alex Tilley, an avid sailor who was tired of his hats blowing into the water and sinking into

oblivion, decided to do something about it. After consulting with a variety of specialists,

Tilley created a hat that floats, doesn‟t blow off, has pockets and a brim that stiffens in the

rain, and blocks harmful UV rays.

   Alex Tilley grew up in Ontario, and his entrepreneurial spirit shone through at an early

age when he resold pumpkins he had purchased from a farmer and made a profit. After a

lacklustre academic career (which is still part of the folklore in Sudbury) and working at

various ventures, Tilley decided to become a dealer in fine art. This career choice allowed

him the leisure time to sail—a passion that brought forth the famous Tilley hat.

   Alex Tilley began selling hats in 1980 hoping to make a small profit. Although early

sales of the hat were disappointing, his break came when he donated his hats to the

Canadian sailors who were competing in the 1983 America‟s Cup sailing race. Eventually

word-of-mouth advertising paid off, and a mail order business was started. When customers

began showing up at his door, Tilley knew it was time to open a retail operation.

   The classic Tilley hat is a Canadian design icon that has expanded into a global

business. Tilley hats are world renowned and are endorsed by Sir Edmund Hillary (the only

person who receives payments for his endorsement—30 hats and 30 windbreakers for his

Sherpa friends) and also by the Canadian Armed Forces, which purchased 6000 hats for

troops during the first Gulf War and continue to issue Tilley hats to our troops.
   But Alex Tilley knows that it is not enough to have an excellent product; customer

satisfaction must be paramount. Knowing that happy customers will tell their friends and

that word of mouth is the best advertising, he has made customer service a matter of pride

within Tilley Endurables.

   From a marketing standpoint, Alex Tilley recognizes the value of customer

endorsements. Tilley catalogues feature real people to create credibility by putting a name

and face to his products. Tilley Endurables was one of the first companies in the world to

have its catalogue on the Web in the mid-1990s, and today Tilley hats are sold in 18

countries, with five family-owned stores in Canada (three in Toronto, one in Montreal, and

one in Vancouver) and retail partners throughout the world. In addition to making hats,

Tilley Endurables has evolved into a company with over 9000 stock keeping units (SKUs).

The company sells travel apparel, travel accessories, totes, belts, and many other items.

   Alex Tilley also has a strong determination to give back and is actively involved in

“Street Kids International,” an organization that provides children with resources to help

them achieve independence, “to thrive and to succeed or fail on their own initiative.” Tilley

Endurables donates a portion earned from each hat sold to Street Kids International to

support it in furthering its work.

Critical Thinking

• If hats are the backbone of Tilley‟s success, why is it important to continue adding to,

  promoting, and updating its products?

• How can Tilley get its message out to customers about its products?

• How is audience analysis a key factor in Tilley‟s ongoing success?
Process in Progress

Tilley Endurables Revisited

Today, Tilley Endurables has 200 employees in three different countries, and great

employees are key to Tilley‟s success. Alex Tilley acknowledges that the “nice, friendly

and sincere staff” is crucial to its image. The company sells its products in more than 26 000

stores in a dozen and a half countries around the world. Even though 70 percent of Tilley

sales are in Canada, more hats are sold overseas than in Canada.

   With few exceptions, such as socks that are made in the United States and the Cobber®

Neck Wrap made in Australia, all Tilley merchandise is manufactured in Canada.

Ultimately, it‟s the Canadian-made quality that has made hat sales soar in the United States

and the United Kingdom. Although Tilley has considered opening a manufacturing plant in

China, where he could make his products at a lower cost, he says he‟s proud of the Tilley

labels, which say they are sewn with “Canadian persnicketiness.”

   The iconic Canadian Tilley hat, which comes in 13 sizes and has annual sales of more

than $280 000, has been worn by Pierre Trudeau, Mick Jagger, Paul Newman, and Prince

Philip and has made Tilley, an MBA dropout, multiple millions.

   Tilley‟s target market is consumers age 50 and up. To reflect this age group, the people

in the catalogue are older models or real customers. Although the advertising for the

products focuses on mountains and deserts, Tilley‟s customers live predominately in the

“urban jungle” but may aspire to more exciting possibilities in the future.

   The clothing is considered classically conservative, and somewhat expensive, but Tilley

argues that the superior quality of the products requires this pricing. And they offer a lot of

extras—Tilley products come with a lifetime guarantee. So, for those who want a product
that‟s “endurable,” Tilley aims to fill that need and supports his products with the Tilley

guarantee posted on the company Web site:

     We pride ourselves on making the finest outdoor hats and travel clothing in the world

 and treating our clients in the fairest way possible. If there is a problem caused by poor

 workmanship or faulty material, please send your freshly washed garment to us and we‟ll

 replace the garment free—whatever‟s fair. Exclusions: normal wear and tear and damage

 caused by misuse or improper care.

   Tilley‟s philosophy of business also provides an interesting perspective—he advises

entrepreneurs to “expect failure as a part of your business life and carry on after that.”

Critical Thinking

• Based on what you learned in this chapter, what specific advice can you give about

  keeping a message clear? Should a business message be conversational? If so, how is a

  conversational tone achieved?

• Why is clarity important, especially in providing information about guarantees?

• What advice can you give for improving the directness and readability of a business

Process to Product

Applying Your Skills at Tilley

Tilley‟s headquarters in Don Mills, Ontario, reflects the novel approach of the company.

Witty slogans such as “Practise Safe Sun” and “Prepare—for Adventure” set the tone for

the company. Many unique artifacts greet customers as they head into the store, including a

huge rusty moose, an Easter Island head, and an Inukshuk.

   After passing the free cookies and coffee, the customer finds the store itself is a burst of

colour. The customer will find silks, denim, and Linda Lundstrom‟s elegant Tilley line in

addition to the vests, pants, shirts, and shorts made from Tilley‟s famous polycotton blend.

   The product line changes constantly, and Alex Tilley remains true to listening to his

customers. When he received a letter from a man in New Hampshire who complained that

he loved his Tilley winter hat, but the earflaps were too short to keep his ears warm, Tilley

redesigned the hat to make the flaps longer and sent the customer a new hat—for free!

   Although hats are still the company‟s top selling item, the firm sells a wide range of

products. Alex Tilley is always looking for new opportunities of growth. His line of

clothing called the “Different Drummer” is dedicated to “the uncommon man and woman.”

The new strategy is designed to increase the demographic appeal of the product, with a

younger customer in mind.

   Although the Tilley product line has expanded and developed with the times, when

asked what he‟d like his epitaph to read, Tilley said, “I would like my epitaph to read: „A

good man who built a better hat.‟ ”
Your Task

Assume that your team leader has asked you to analyze some of the competition‟s Web

sites. Visit the Tilley Web site and compare its content and presentation to that of another

apparel company such as Roots or Eddie Bauer (or a company of your choice). Based on

your perception of the intended audience and purpose of the Web site, evaluate the

effectiveness of each. Write a memo to the team leader discussing your findings.

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