E-Strategies

Timbuk2 goes online to find new life -- and a cure for the one-product-wonder blues

Timbuk2 Designs is a quirky company that makes tough messenger bags with hip names like Dee Dog and funky color combinations like coffee and mint. With help from bike shops across the country, Timbuk2 sewed up 56% average annual growth from 1995 to 1999, reaching $3 million in sales. But for the San Francisco manufacturer, something crucial was still missing: a direct connection to customers.

In Timbuk2's original vision, bike messengers would design their own bags at the bike shops. But few stores promoted such custom capabilities. "When you're a small percentage of a retailer's sales, you're not so important," says Timbuk2 founder Rob Honeycutt.

Timbuk2 had set itself up to let consumers mix and match their choices in bag colors, features, and accessories; then the company would sew the bags to their specs. Because it charged extra for the special features, the custom bags were quite profitable to make. But most retailers insisted on stocking only Timbuk2's standard bags in a limited range of colors. "You ask them if they want to stock some of the custom bags, and they say, 'Sure, give me some black ones," says Brennan Mulligan, Timbuk2's president. "Love and money were not coming together."

It took a near brush with death for Mulligan and Honeycutt to make a change. In August 1999, while setting up for a trade show in Utah, the two men were caught in a tornado that destroyed their sewing machines and sent them diving for cover. "It was a pretty massive experience," recalls Mulligan. While neither man was injured, the scare convinced them it was time to take control of their destiny. Over "a few nerve-calming beers," says Honeycutt, they decided to stop trying to sell their idea of "mass customization" to retailers and to instead take their vision directly to customers over the Web.

"We welcome your feedback and will always pretend to be open to suggestions," Timbuk2's Web site now tells visitors, "no matter how ridiculous and far-fetched they may be." Elsewhere on the site, viewers are encouraged to let it all hang out on a page called "Feeling Lonely?" Such irreverence is part of Timbuk2's heritage: Honeycutt's original name for the company was Scumbags Inc.

To start, Mulligan and Honeycutt launched a program on their site that let visitors see how bags would look with different color combinations. Even though customers couldn't actually order bags over the Web, traffic to Timbuk2's site quickly doubled. In May 2000, Timbuk2 installed a test version of a Web feature dubbed Bag Builder, which lets customers design bags to their own specifications and then buy them online. Before long, orders -- highly profitable ones -- began to roll in.

Customer feedback rolled in, too. Some 2,000 visitors to Timbuk2's site dutifully filled out "bug reports" suggesting ways to make Bag Builder easier to use. A new-and-improved Bag Builder debuted last October, and orders took off. Customers also suggested improvements to the messenger bags themselves. "We went from no feedback to a ton of it," says Honeycutt.

On March 4, a customer named Alan in Denver posted this message on the " Feeling Lonely?" page: "I am in severe need of a laptop bag that can fit my big-ass G4 PowerBook." Timbuk2 didn't have a sleeve to fit the Apple G4, but within 48 hours the company's managers decided that it should. Two weeks later, Timbuk2 vice-president Jordan Reiss wrote back to Alan, "One superwide G4 sleeve coming up. Coming soon to our Web site near you, this Friday." Alan then spread the news to fellow Mac users at www.macintouch.com.

Another site visitor offered, "I would buy a Timbuk2 bag in a second if only it had a handle in addition to the shoulder strap." Done. Yet another suggested adding a water-bottle holder: "In my job as a courier I drink a lot and I might need a boost on the job." Got it. Timbuk2 took those and other suggestions and incorporated them into its first major new product in a decade, the Commuter Bag, which is aimed at computer-toting urbanites.

In June, just two months after introducing the Commuter Bag, the company was already prepared to change the product, based mainly on feedback from 180 online customers. "Now that we have so many people telling us what they think, we could change our products daily if we wanted to," says Reiss.

Of course, not every suggestion sees the light of day. Just ask Reiss about the requests for a sand-washed silk bag, a burrito pouch, and a concealed pistol holster.

Even without satisfying every whim, the company now sells nearly 15% of its bags online. More impressive, because most online customers opt for extra features, those sales now account for 30% of Timbuk2's total revenues -- up from zero a year ago. And online orders contribute fully half of Timbuk2's gross profits. While many companies still struggle with E-commerce, Mulligan says, "for us, it's the best thing that's ever happened."

But Timbuk2's online success brings it to a crossroads. The company's overall sales in the past year grew by just 25% -- to $3.7 million -- as retail orders softened. What should the company do? Mulligan is mulling over his options. "We still want a strong retail presence to reach a wider audience, but we have this awesome tool on our hands," he says. "How do we make it work with the rest of our business?"

One thing's for sure: the Web lets Timbuk2 work with customers in ways that it never could before.

The Commuter Bag
We hear you: Customers asked for, and got, a top handle, a pocket for reading material, a water-bottle holder, and a padded laptop sleeve. The request for a water-bottle pocket came from a 52-year-old law professor, a 15-year-old student/bike messenger, and a 33-year-old IT professional, among others. "When you see the same request across different customer types, you know that's a feature that needs to be added," says Jordan Reiss, Timbuk2's VP.
Get a handle: Timbuk2 quickly heard back by E-mail from customers who said the Commuter Bag's handle wasn't substantial enough. Timbuk2 plans to upgrade the handle in time for a major trade show.

The Wide-Screen Laptop Sleeve
Ear to the ground: The idea for the wide-screen laptop sleeve came from customer feedback sent over Timbuk2's "Feeling Lonely?" Web page.
Speedy change: Three weeks after the idea first surfaced from customers on the Internet, Timbuk2 started making the new laptop sleeve and selling it online.

The Messenger Bag
Cool colors: Black, hunter green, and navy are still the most popular, but if you want to order a Dee Dog in pink, brown, and mint, Timbuk2 won't stop you.
Bells and whistles: The average sale online is 30% higher than it would be in a retail store, because people add special features and accessories. If something is not integral to the bag, Timbuk2 simply makes it a custom feature. The company added a key-chain holder to the inside of the messenger bag after many customers mentioned they often lost their keys.


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