How Mountain Khakis turned $600,000 of excess inventory into a 150% revenue increase

Mountain Khakis, a premium outdoor retailer, faced a massive problem. One of their major partners, a large-scale retail chain, canceled an order to the tune of $600,000. To solve their surplus challenge, Mountain Khakis worked with Lexer’s team to build a data-driven and time-sensitive campaign that shifted this problem into a customer acquisition powerhouse opportunity.

Offering a broad range of premium outdoors apparel, Mountain Khakis’ focus on quality and durability has built them a loyal customer base over the past two decades. With roots in Jackson Hole, Wyoming, the brand is an expert in the outdoor retail market and historically engaged its strong retail partnerships as primary sales channels.

However, in 2018, when Jeremy Hale joined as president, the brand began to explore new opportunities in the changing retail landscape, investing in a new e-commerce team and software stack, to help expand its direct-to-consumer market. This decision proved powerful.

The problem: unexpected excess inventory and limited time

When a prominent department store chain, and wholesale partner of Mountain Khakis, canceled their large semi-custom order for products for fall and winter lines, the company was left in a lurch as the holidays approached. The products had been produced, but were now no longer needed and the team did not want to resort to discounts. The Mountain Khakis team, led by Digital Marketing Manager, Kyrian Poole, needed to quickly determine a way to move this unexpected stock with no designated budget allocation and very little time.

Kyrian set out to find a solution to utilize existing marketing resources, requiring little to no additional creative resources, and to optimize their limited paid media budget allocation.

The solution: data-first approach leads to new customer acquisition

Rather than lead with a creative concept, messaging goals and a photoshoot like most retailers typically would, Mountain Khakis stopped and first looked at the data. Supported by the insights and audiences in Lexer’s CDP, the team strategically analyzed the customers who would have purchased this product from the department store, if the order was not canceled. From there, they developed two distinctive, data-driven social media campaigns to showcase the specific product and target the right people:

1. CDP-Driven Attribute Approach: Leveraging existing CDP information and segmentation capabilities, lookalike ads were created on the most relevant groups and customer attributes, rather than developing a catch-all lookalike list from their entire database. This hyper-targeted approach resulted in a more effective campaign, honing in on Facebook's lookalike capabilities and saving ad spend on customers who would not be interested in these specific items.
   ‍
2. Combining location data with Experian audiences: This strategy involved targeting the locations where consumers would have purchased in-store and instead converted them online. To extend the reach beyond known customers, the team matched their most relevant customers with their corresponding Experian Mosaic audiences types. From here, they overlaid the geographic details with demographic identifiers, which proved to be an incredibly strong combination producing the most fruitful audience Mountain Khakis had targeted, not just in this campaign, but all year.

The results: campaign success creates repeatable strategy

To the team’s surprise, this reactive campaign ended up outperforming all other annual campaigns. The ads achieved an in-feed click through rate (CTR) of 70%, as well as a Reels and Story CTR of 30%. Considering that organically, Reels and Story campaigns often outperform in-feed ads, this result was counterintuitive to the assumptions made by Kyrian and the Mountain Khakis’ team. However, it was in line with Lexer’s insights. 

Following the advice from the data – specific to Mountain Khakis’ own customers and not popular belief – proved to apply not just to who to target but also where to target them. Together, this approach made for a winning combination. 

This experience reinforced their ability to, in times of need, lean on their accurate, detailed, and comprehensive data to solve complex problems and see revenue increase.

Kyrian Poole, Digital Marketing Manager, stated, “By segmenting first, and focusing on creative second, we found a winning social media campaign strategy that can be replicated time and again. Most marketers start with messaging and photoshoots, envisioning what their customer wants to see. Then after trial and error they seek out the data to see if their theory was correct. I strongly believe in starting with the data first, and this campaign shows that a data-driven strategy outperforms creative first.”

The outcome: necessity generates rise in revenue

What started as a necessity to move stock, turned into a huge prospecting campaign and a new strategic approach. The campaign generated an increase in visit rates, improved return on ad spend (ROAS), increased revenue and reinstated regulation on Mountain Khakis supply and demand. 

Here are the top takeaways:

• Visit rates skyrocket: Through this experimental campaign, Mountain Khakis saw 10,000 new visits to their online store.
  
  
• Impressive ROAS: The campaign returned with a ROAS of 4.64 compared to 3.7 in the previous quarter.
  
  
• Rise in revenue: Saw an increase of 131% clicks, 137% purchases and an increase of 150% revenue from the previous quarter.
  
  
• Surplus sold: Mountain Khakis moved 73% of the more than $600,000 worth of returned inventory. For pants specifically, it was 95% of the return stock sold.

Knowing the customer base, through Lexer’s CDP, empowered Mountain Khakis to find a solution to their inventory excess challenge that not only outperformed their expectations, but also helped the team get to know their customer better.

Key take-away? Get creative with data!

Data first, creative second is a winning strategy for consumer brands.

Instead of developing creative, and messaging, then testing to see which campaign will stick, maybe re-work your campaign process so that your creative process better aligns with what your data is telling you. 

You can inform your creative with your customer data from inception, and better anticipate the results. 

Data First. Creative Second. Working all together.

Interested in learning more about how Lexer can help you find creative, data-driven solutions to common retail problems? Book a demo with one of our retail experts today.