Machine Makers Coming Into Fashion
Manolo and Prada, move aside. Some brawny brands from the industrial heartland are vying for “designer” space on store shelves.
Midwestern manufacturers such as Caterpillar Inc., Deere & Co. and Harley-Davidson Inc. -- best known for building powerful machines -- are muscling into consumer categories from apparel and footwear to toys and housewares.
Among the top sellers are child-size, battery-powered tractors and motorcycles that kids can tool around on at 5 mph. There’s even a miniature Harley in pink for girls.
The captains of industry also are targeting the apparel category, hoping consumers will want to wear jackets, boots and other items with brand names that may be more associated with rugged machinery than with trendy designer fashion.
Caterpillar, maker of excavators, backhoes and other construction gear, has attracted a following among the young and hip in Europe, who covet its footwear.
“It’s American and it’s blue collar,” said Thomas O’Guinn, a business and sociology professor at the University of Illinois who studies “brand communities.”
Kimberly Neible, marketing manager for Peoria, Ill.-based Caterpillar, said the brand began to take off in Europe during the grunge music era of the early 1990s. The company sells 7 million to 9 million pairs of shoes annually around the world.
Caterpillar tailors its clothing and footwear to the youth market, particularly the 18- to 26-year-old crowd, with whom it hopes to raise its profile.
“To that age group one of the things we represent is authenticity. We are the work brand,” Neible said.
Marketing experts say a key to ensuring the long-term vitality of a brand is to build relationships early.
“The question with all of these heritage brands is how do you stay relevant to the younger generation? If you can introduce the brand at a younger age, that goes a long way,” said David Aaker, professor emeritus of marketing at UC Berkeley.
What began as a strategy to boost brand awareness has become a healthy profit generator, these companies say.
Harley-Davidson reported general merchandise sales of $164 million last year, or almost 5% of total sales, spokesman Mike Morgan said.
Caterpillar, which does not break out revenue from merchandise, said sales at the retail level doubled in five years to $850 million last year.
Firms such as Caterpillar and Deere license their names to specialty manufacturers and receive royalties of 3% to 10% of retail sales, with “no downside” risk because their partners produce the products, Aaker said. “It’s an incredible margin.”
