Coastal Pet Products Inc. is a bona fide living legend. Its founder, Jim Stout, transformed the pet products industry when his nylon webbing leashes and collars overtook traditional leather as the standard, and again when his Kanine curved buckle did the same. But the market that Coastal Pet knew decades ago and conquered via the muscle of its product innovation has changed, disrupted by technology and the internet.
Facing this new market reality is Jim’s daughter, Kim Stout, who now sits in the president’s chair. She looks out over the retail landscape not with the eyes of an engineer, like her father, but from the perspective of salesperson and a marketer.
“Retail is definitely under pressure,” Kim Stout says. “The consumer is driving the buying decision.”
The old days, when manufacturers, importers and large retailers were responsible for buying decisions — they make/stock it, consumers choose/buy it from those curated selections — are all but over.
“With omni-channel, consumers have so much choice. It’s really lowered the barrier to entry. And with the technology, it just happens so quickly,” she says.
To keep pace, Coastal has to adapt. Stout is setting a retail strategy aimed not only at ensuring Coastal’s products are available wherever ever-more-demanding consumers shop, but increasingly at making sure that consumers are aware of the Coastal name and what it represents.
Partners in innovation
Coastal’s Alliance facility is a testament to its industry-shifting innovation. The company grew out of the basement of a pet shop beginning in 1968 and moved into its first facility in 1974. From 10 employees and 50 products, Coastal has grown to employ nearly 500 and send to market more than 7,500 SKUs from its 376,500-square-foot manufacturing and distribution facility next to a man-made lake on a former cornfield.
But not everything Coastal does originates from under its 8.6-acre roof.
Speed-to-market in the omni-channel retail world is essential. Part of Coastal’s adaptive strategy is to find innovation outside itself through specialty opportunities with small but commercially established companies.
Wolfgang Man & Beast is a recent example. The Salt Lake City-based company specializes in stylized leashes and collars, as well as a collection of wallets, belts and T-shirts — the former for the “beast,” the latter for the “man.” In this relationship, Wolfgang maintains its own brand and does its own marketing and product design, while Coastal manufactures and distributes for it.
“It’s a way for us to test outside our core competencies and drive profit innovation through the organization,” Stout says. “Quite frankly, some of these push us just like a large customer partnership will push you, which is good for the organization.”
Coastal also makes acquisitions. The differentiator — what makes one company a candidate for a partnership and another a candidate for an acquisition — is assets. For example, Bergen is an Oklahoma-based company that Coastal acquired in 2015 that is known primarily for its cat toys.
“Bergen had a strong brand. They had a good lifestyle B-to-C message that we weren’t as strong on — we’re very strong B-to-B,” Stout says. “And they had a really good sales and product team. When we acquired them, the five team members that came with them were very attractive and we retained that team, and we ran them as a skunk works for the first three years and kept the product team completely separate.”
Make the pie bigger
Coastal also meets the omni-channel challenge through an adjusted internal structure — people in the right seats on the 8.6-acre bus, if you will.
“Structure follows strategy,” Stout says.
And Coastal’s structure has morphed from the days of catalogs into an e-commerce, and from a web development team pulled from IT that works with sales to drive its e-business.
Along with a person dedicated to e-MAP (Minimum Advertised Price policy), the team monitors its many online retail relationships. It gets some assistance through the partnerships it holds with larger online retailers, such as Amazon, Tractor Supply Co. and Orvis, which are managed via sales reps and highlight Coastal’s willingness to leverage the help of strategic outsiders.
“You can really gain a lot of insight from partnering with your customers that are really strong in that area,” Stout says.
The point at which Coastal tipped into committing dedicated resources to e-comm happened between 2004 and 2006, when companies were launching their own e-commerce sites. After watching the tech bubble burst, Coastal had been treating Amazon as just another distributor, skeptical of its staying power. But as Orvis and some of Coastal’s other key customers became more strategic with Amazon, the shift to online became a clear necessity.
To that end, Coastal Pets has a consumer portal as a not really advertised or promoted way to fulfill direct consumer orders.
“We’re a manufacturer that is moving to a brand, so you need to be available how people want to get to you,” Stout says. “For some people, that’s going be through our website. Others will be going to their store. I don’t think of it as a scarcity/abundance thing. I think it is just, how do you make the pie bigger?”
Coastal’s move to make its brand more recognizable in the market is a product of the scattershot realities of omni-channel marketing and consumers driving the buying decisions. Name recognition is valuable because Coastal wants to be recognized wherever shoppers might shop.
But how does a company that hasn’t necessarily had to tell its brand story learn to be a storyteller?
Coastal’s approach is to become more public and rely on enthusiasts — the dedicated groups that make pets their profession and who live the lifestyle — to back the brand.
The other part of the brand story is told by retailers via the presentation of Coastal’s products. Stout says Coastal curates its retail relationships in part through its authorized dealer program. Those that hit the metaphorical bullseye have clean stores and well-trained staff, training that Coastal will provide, if necessary.
“We promote and support retailers that are going to give the consumer a great experience,” Stout says.
That also means Coastal will exit relationships with customers that don’t abide its guidelines.
“We turn off customers that don’t follow our MAP,” she says. “And we’re private, so we can do what we feel is best for consumers for the long term.”
A graduate of The Ohio State University and Rhode Island School of Design, Stout taught public school in Maryland outside Washington, D.C. She joined the family business after she was asked to fill in as a Mid-Atlantic sales rep, splitting her time between school and sales.
But it wasn’t a foregone conclusion that she would work for the family business. Coastal was a staple in her life — it had always been there and, presumably, would always be. So she went her own route and became a teacher, until she became disenchanted with the profession.
“What I didn’t like about teaching is there’s a real social work aspect to it that was really defeating,” she says. “And so I decided it was not going to be for me long term.”
Stout left the vocation and Maryland to join the company in Alliance full time in a marketing capacity. Soon, she was director of sales and marketing, and shortly after, the company’s president.
When she took her seat in the president’s chair, she saw the market through the eyes of a marketer, carrying with her the principle that customers drive Coastal’s business. But it also meant her vision in other aspects of the business was limited, such as in operations.
She pulled herself out of the sales and marketing role, hired her replacements, and spent more time in operations, walking the department floor and talking with personnel, as well as finding more familiar ways to immerse herself in the business.
“The clarity comes from doing the work, thinking and spending a lot of time planning,” Stout says. “I tend to be a little bit of a book person. That’s the teacher background. You have an objective: We’re going to go from here to here, and these are the steps. My father’s not book-oriented, so it’s very different leadership styles. At the end of the day, I think one of the benefits is that I know I am not an expert in the functional areas. But I have an umbrella view of the industry and the customers.”
She says she’s always looking for alignment and identifying where gaps exist — how the company could get a better handle on returns, for example, by understanding what is happening on the transaction side — to keep the bigger picture in view.
Maintenance isn’t dynamic
Helping her acclimate to her presidential responsibilities are the company’s advisory board, reading, mentors she’s found along the way — friendly ears on been-there-done-that vets from a variety of industries willing to be a sounding board and offer perspective — and her father.
The goal, naturally, is to grow Coastal.
“If you’re not growing, you’re dying,” she says.
The growth goal at Coastal, however, is steady and incremental, with an emphasis on investments, whether in internal systems or people, or external in partnerships and acquisitions.
“You have to set goals to execute goals,” Stout says. “And if you’re not getting to the goals that you and the team set, you really have to be self-reflective. What got us here won’t get us there. So you’ve got to keep an open mind.”
But one thing the organization won’t do — pun intended — is sit.
“You don’t want to be the custodian because maintenance isn’t dynamic,” she says. “But it’s a really good foundation I can leverage. There’s a lot of support that comes from that. It takes years to build that sort of integrity and reputation, but you can’t hold still, either. I’ve got to find the piece that I’m passionate about that’s different to move it forward.”
» Leverage outside expertise to increase speed to-market.
» Adapt to market realities
» Shore up deficiencies to be a more well-rounded leader.