TCB | With the workforce turning over, your core customer is also turning over, from baby boomer to millennial. What are you doing to maintain consumer relevance?
Mark Urdahl: For more than 110 years we have evolved as a company because we have kept consumers front and center. As consumers have changed, we have had to evolve and innovate. What are we doing today? We are trying to marry the analog and digital platforms to keep up with the evolving consumer. With one cell phone, a consumer has access to communication and information in the omni-channel format. We want to marry that with e-commerce and social media to be available 24/7. Our products are purpose-filled, but we have new looks and new feels for those consumers who want to wear different footwear than their mother or father wore. We now have e-commerce sites for three of our four brands—Red Wing Shoes, Irish Setter, and Vasque—and we will have one for our Worx boots next year. We have to be in the digital space, but we recognize our brands are premium brands that lend themselves to the store experience.
TCB | What do you mean by your brands lend themselves to the store experience?
Urdahl: In addition to quality products, we need to deliver services and experiences. I like to say that Red Wing Shoe stores are like Apple stores. You can see all of our styles. You also get a tremendous amount of service. Someone measures your foot and talks to you about your footwear needs. Later you can come in and get free laces and free oiling.
TCB | While close to the Twin Cities, you are still far enough away that competing for talent must be challenging. What talent acquisition strategies have you implemented?
Urdahl: Three to four years ago, when we were growing rapidly, we were concerned about how we could attract talent to come to Red Wing to work. But we have not found that to be an issue outside of IT and marketing—due to the opportunities offered in the Twin Cities—which has been a bit of a hurdle. When we seek people to come to work for us, we invite them to our offices. When they see our building and what we are, meet our people, they say they had no idea about the magnitude of our operations. We also offer flexible opportunities. They don’t have to drive to Red Wing every day. Sixty percent of our employees work outside of Red Wing at other locations, and well over 50 percent of those who work in Red Wing work remotely some of the time. Of course, not everyone can do that. People who work in manufacturing or people who need to be at their desk cannot.
TCB | Are there other pressing issues you face?
Urdahl: We sell to global manufacturing companies. That has created headwinds. The strong U.S. dollar is making it more difficult for U.S. exporters. Geopolitical issues are difficult. The global manufacturing economy is contracting, and the oil and gas industry is a big part of that. Seventy-five percent of our company is focused on work boot manufacturing, and 25 percent of that is related to the oil and gas industry. As that business ebbs and flows, we feel it financially, but we have weathered these storms before. To prepare for recovery, we are looking to invest in our business and be ready to gain market share. We are watching expenses but continue to invest in the future. Being a privately held company, we have the option to do that.