Staying relevant
Zippo’s business has grown nearly 60 percent in the past 10 years. More than 90 percent of its business is still lighters and fuel, even though tobacco-related products are declining.
Part of that is because of global sales — nearly 60 percent of Zippo’s sales are offshore. Zippo has only been in China since 1993, but that market is already about 40 percent the size of its U.S. market.
The other factor is becoming more of a lifestyle product.
When creating products in your brand family or category, or even when creating a new brand, Booth says you need to stay relevant with whoever your target audience may be.
When Booth first became CEO, the average age of a lighter buyer was 44 or 45 and rising, giving them an identity problem with younger generations.
“Most brands want to at least influence young people or people early in their lives so they continue to buy the brand later in life,” Booth says.
A 21-year-old who buys a pocket lighter now may purchase a candle lighter at 45.
But if you want to be relevant to a younger target audience, the execution is critical, he says. You want to talk to them how they want to be spoken to, socializing with them where they live, which today is via social media.
“We talk to them all the time,” Booth says. “We tell them what we’re doing, where we’re going, why we’re doing it.
“You want to be in their face electronically. You want to be involved with something that means something to them, something they enjoy.
“So, we’re involved in music — Live Nation for example,” he says. “We’ll sponsor 100 to 150 concerts around the country each year, and we have the Zippo booth and the Zippo people and everybody there, so the fans know who is sponsoring it.”
Another strategy is being conscious of what makes a lighter worth collecting. Several years ago, Zippo went to the Art Institute of Pittsburgh and asked students to create art to put on lighters. It was so successful Zippo now sponsors contests for student artists to create relevant art for products.
All that effort has paid-off. Today, the average age of a lighter buyer is in their mid-30s.
Launching new products
When Booth saw the buying trends in the tobacco category 10 years ago, the company started working on developing new products.
The strength of the brand name, however, has worked against the company. Booth says the more mature the market, the more challenging it is.
“So, in our oldest market, the good ol’ U.S., it’s harder to diversify because when you say to consumers, ‘What would you think about buying a hand warmer from Zippo?’ sometimes the reaction is: ‘You mean the guys that make lighters? Why would I buy a hand warmer from those guys?’
“If we do the same thing in a less mature market like Japan or China, consumers far more easily grasp the concept and accept the new products because they haven’t been tied to Zippo, the cigarette lighter, for 80 years,” Booth says.
It’s also a challenge coming into channels already crowded with competition. Booth says you have to get retailers on board with putting the product on shelf space that already has velocity and profit.
To keep from stretching its brand into something it shouldn’t, Booth says Zippo does a mountain of consumer research.
“Research is a monumental first step. You have to find what your brand will support by way of a product,” he says. “I’m sure there are 20 different things that we could go out and try to do that wouldn’t be very successful. But if we stay in the flame category, and categories or products that are normally lifestyle-related, the research we’ve done tells us we should do reasonably well.”
Stretching the brand led to a misstep a few years ago, when Zippo bought an Italian leather purse company called Zippo — for the trademark.
Zippo, unsuccessfully, tried to run the business for five or six years. There was a lack of good management, and Zippo just didn’t know enough about women’s leather purses. Booth says they ultimately discovered that Zippo purses weren’t fashion at all, but rather purses that women carried to work.
But research is just the first step. It also takes the right sales force, the right channel of distribution, the right public relations and media, and the correct level of dollar support, while not trying to launch too many new products at once.
“You have to be committed, and I think the other thing you have to be — other than well-organized and smart — you have to be incredibly patient,” Booth says.
