Hexa Recreation Products and New Normal Consulting test creating custom jackets via in-store, digitally enhanced kiosks
When walking into local outdoor sports store Champaign Outdoors, it’s hard to miss the high-tech winter jacket kiosk from Hexa Recreation Products. Standing about six-feet-tall in the center of the Champaign, IL, store, the four-sided kiosk commands attention with a large, interactive monitor depicting images of vibrant and dark-colored jackets on one side. Two other sides of the display are dedicated to various circular cubbies stocking black-colored men's and women's jackets and vests in a variety of sizes (womens XS to mens 3XL). Most enticing of all is the message the display communicates and the customization it aims to deliver: a winter jacket or vest “designed by you.”
Positioned in eight local outdoor specialty stores across the country, the kiosk allows shoppers to first try on a jacket (priced at $250) or vest ($200) to find their best fit and then proceed to the monitor where they can:
adjust sleeve length,
choose a color for the pocket zippers, inner lining, sleeves (right and left), hood/collar, side panels, body and shoulders,
select a down type (duck down “700 fill power” is standard but goose down “800 fill power” is optional for an additional $20),
add more down for warmth for another $20,
add a chest pocket for another $10,
opt for a hood for $30 or a collar at no additional cost, and
personalize the garment for $5 with text on the hood, back, chest, or sleeves, if applicable.
Once a shopper is done customizing their gear they can either email themselves their designed garment for later purchase or checkout directly through the kiosk. The garment is then delivered to a shopper’s home for free in about three weeks in sleek, minimal packaging.
“People are ecstatic about their jackets,” Brad Werntz, founding partner of New Normal Consulting told P2PI. “Honestly, some of [the custom designs] are kind of out there. They’re Harlequin jackets. ... But, beauty is in the eye of the beholder and there is certainly not another jacket like it in the world.”
Building the Concept
The idea to create custom, personalized garments was conceived by Hexa Recreation Products, a high-end international manufacturer of premium customized goods. "If you think of a factory, they are set up to make 40,000 of something — 40,000 medium down jackets, ... 40,000 large and XL [etc.],” Werntz said. “[Hexa] set up their whole system to make things by the [item] almost as fast as their line could do multiple items.”
Experienced in producing down garments for brands in the outdoor industry, Hexa and its Chinese parent company approached New Normal Consulting to vet their concept and gauge “whether it could come to market — especially around three main areas: price, time for delivery and then margin for the retailers,” Werntz explained.
The agency then interviewed 1,400 retailers and 400 consumers in the outdoor specialty niche market, sharing details of the initiative and asking questions such as: How long were they willing to wait for a custom jacket such as this? How much more would they pay? "And because the math wasn’t necessarily baked at that point, we asked the retailer, 'Your store needs 40%-50% margins to survive but there are so many cost savings in this model. How low would you go to have this tech feature in your store and to get this service for your customer?'"
The partners received pretty consistent answers. "Customers and retailers alike said they would pay 30% more and that they’d wait up until a month,” Werntz said. “Retailers told us they’d take as low as a 20% margin or the equivalent to get this feature in [their store] especially with all the cost savings."
When asked how they get bulk pricing when fulfilling orders one at a time, Werntz explained their process gets rid of several layers of middle men. For example, a standard jacket may ship for $40 to a U.S. brand, which marks it up to $120 and by the time the jacket gets to retail it’s priced at $240. “We, in our case, get rid of the two chunks in the middle and have a considerable margin internally to pay the retailer a full margin and keep a much higher margin for ourselves,” Werntz said.
Testing the Kiosks/Business Model
The manufacturer's original idea for an in-store display was minimal. “Their first concept was a PC with a green bar printer next to it on an Ikea desk in a store with a sign. That would not excite a U.S. consumer,” Werntz said. “Our partners in Asia are excellent manufacturers, but they are not retailers and that’s why they came to my agency as consultants in the outdoor industry.”
Ultimately, Afton, MN-based fixture design company Chandler was tapped to produce the kiosks and Minneapolis-based Capsule was tasked with the messaging and graphic design elements. (See video of the kiosk’s first iteration below.)
The kiosks rolled out to two stores in 2017 — Ute Mountaineer in Aspen, CO, and Midwest Mountaineering in Minneapolis — and are currently available at eight local outdoor shops across the country including Knoxville, TN, Cody, WY, and Los Angeles. “They’re still just tests,” Werntz said. “We don’t have customers at this point. We have ‘testing partners’ essentially. These are retailers we’ve had strong relationships with — in many cases up to three decades of relationships with — because we don’t want to handle complaints. We need feedback about bugs at this point.”
In addition to testing the interface, the companies are still testing the whole business model. “Everything from delivering and installing the kiosks to tech customer service to consumer customer service to after sales and service,” Werntz said. The kiosks have improved since 2017 — a credit card processing machine was added last year — but the challenge moving forward will be less consumer-facing and more stress testing the back end.
Returns/“Selling Against the Invisible Other”
Garments can be returned, though only one shopper has requested to do so to date (after accidentally ordering a medium jacket instead of an extra small). “There’s a great degree of buy-in when they design their own,” Werntz said. “Our process is to take them through both the fit and the color so they’re pretty assured of what they’re getting and as long as we deliver on that, they’ve been pretty happy.” Since the clothing is custom-made, Werntz added that the return rate must not go above about 3%. They can’t be like Zappos, for example, which has a return rate of about 30%, he said.
Every participating store sells about one or two custom down garments a week, according to Werntz. Retailers are paid a commission of more than 40%, but they also benefit from avoiding other typical expenses and hassles such as moving merchandise around the store and tracking it through their accounting systems.
In the Aspen store, the custom jackets were the top selling SKU in both dollars and units in 2017, according to Werntz. The kiosk also indirectly helped lift sales for similar down jackets at that location because it helps retailers with what Werntz calls, "selling against the invisible other.” "If you don’t have a choice, customers often don’t make a choice," Werntz said. "The retailer last year was able to say, 'Look, I can custom make you a jacket exactly what you want in your size in the color you want or I can sell you this one right here.' And most of the time they bought the one right there but sometimes they bought ours too. … It allows them to ask for the close."
NOTE: Visit P2PI for more images of this kiosk and story.