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The Challenge

Historically perceived as a retailer catering to outdoor enthusiasts akin to "Briscoes," Kathmandu sought to pivot its brand image to appeal more to millennials. This demographic values authenticity and community engagement, necessitating a media strategy that resonated with younger audiences while maintaining relevance with existing customers. Key challenges included:

Competitive Market: Operating in a crowded retail space with increasing competition and rising inflation.

Budget Constraints: Faced with a 23% reduction in media budget while still aiming for an 18% increase in revenue.

Brand Repositioning: Rebranding efforts to shift perceptions from utility-focused to desirable for millennials.

The Solution

Kathmandu leveraged innovative data-driven strategies and a reinvigorated brand platform to maximize campaign effectiveness and achieve ambitious sales targets.

1. KM3 Optimization Model

Kathmandu utilized the KM3 optimization model, a groundbreaking approach that integrates customer insights, weather data, and conversion analytics derived from extensive data points including 1.2 million customers and over 5.4 million transactions. This model empowered Kathmandu with predictive capabilities to optimize media spend and enhance campaign performance.

Key Components of KM3:

Purchase Propensity and Weather Data: Merging consumer purchasing behavior with real-time weather conditions to tailor marketing efforts. For instance, promoting winter gear ahead of cold fronts or targeting rain gear during wet weather periods.

Full-Funnel Conversion Optimization: Utilizing comprehensive data insights across the customer journey to maximize conversion rates at each stage, from awareness to purchase.

2. Media Strategy Transformation

Kathmandu revamped its media strategy to align with the "We’re Out There" brand platform, emphasizing outdoor experiences and community engagement. The campaign ran from April 26 to May 31, 2023, spanning across multiple channels including in-store, online, digital, social media, out-of-home advertising, and PR activities in New Zealand and Australia.

Results

Kathmandu's strategic approach and data-driven optimizations yielded exceptional results, exceeding all media benchmarks and business targets despite the reduced budget:

Total Campaign ROAS Improvement: Achieved an 84% year-over-year improvement in Return on Advertising Spend (ROAS), demonstrating the effectiveness of the KM3 model in maximizing campaign efficiency.

Display ROAS: Increased by 64%, surpassing previous benchmarks and indicating enhanced effectiveness in reaching and converting target audiences through display advertising.

Meta ROAS: Achieved the highest Return on Advertising Spend on Meta platforms, with a notable 34% improvement year-over-year, reflecting optimized performance on social media channels.

Online Revenue: Exceeded targets by 27%, showcasing the campaign’s success in driving tangible sales growth despite economic challenges and competitive pressures.

Kathmandu's success was driven by its ability to transport consumers into a collective escapism centered around outdoor adventures, leveraging a combination of strategic elements:

Contextual Messaging: Tailoring messages that resonated with the joy of outdoor activities and Kathmandu's mission to enhance global well-being.

Real-Time Data Integration: Utilizing real-time consumer, weather, and conversion data to ensure precise targeting and relevance across various media channels.

Community Engagement: Amplifying the "We’re Out There" brand ethos to connect with both existing and new audiences, fostering a sense of belonging and aspiration among outdoor enthusiasts.