But without a glut of company stores, Life Is Good had no widespread physical showcase for its eclectic product line, which fills a 136-page catalog and includes tire covers, picture frames, and dog toys. Franchising would send the iconoclastic Jacobses down cookie-cutter lane and entail the assumption of legal liabilities; in addition franchisees couldn't benefit from corporate advertising, given that Life Is Good doesn't do any. So the brothers hit upon an intriguing alternative: Genuine Neighborhood Shoppes. A GNS is an independently owned and operated business that sells Life Is Good products and nothing else. GNS owners get some signage, a 10 percent discount on merchandise, a few exclusive products, and as much or as little help setting up stores as they desire. They pay no franchise fees, but they do agree to propagate the Life Is Good philanthropy model (more on that later) in their communities. The company expects to eventually have 300 such stores; there are now 40, most run by retailers who have a history with the company or by former or current Life Is Good employees.
So, for example, Shannon and Michael Bourassa and Shannon's brother Sean Patel recently opened Blue Monkey Trading Co., a GNS in Tucson. The Bourassas are steeped in Life Is Good culture--Michael has worked there for five years and is head of the receiving department--so they eagerly accepted the company's help with layout, merchandizing, website art, signage, and fixtures. "We really haven't come up with much ourselves," says Shannon Bourassa, who handles the finances from the couple's home in New Hampshire while her brother manages operations in Arizona.
Bob Ehrlich, by contrast, designed his own layout and décor for Simply Comfortable, a GNS in Lahaska, Pennsylvania. Ehrlich needed flexible shelving to accommodate a very small space and chose white fixtures to make the products' colors stand out. (Life Is Good favors natural wooden floors and walls made from dismantled barns.) "They're up in New England so they have a somewhat different point of view, but they looked at my plans and understood what I was doing," says Ehrlich.
"I think this notion of avoiding the cookie-cutter approach is cutting-edge, like mass customization where you're able to adapt something to a local market," says Frank Hoy, director of the Centers for Entrepreneurial Development, Advancement, Research and Support at the University of Texas at El Paso. "It also gives both the licensing company and the licensee more flexibility in their relationship." The cost is in control, says Hoy. As GNSs proliferate, "they will end up with more people in their network they don't know, and so trust counts for less."
Be a good supplier. Life Is Good is primarily a wholesaler: Its job is to keep distributors stocked with the right volume and the right mix. One way the company keeps up with demand is by stockpiling products in a plant in New Hampshire and holding off on screen-printing--the final phase of production--as long as possible to ensure maximum flexibility. Decisions on what designs to print are made by a team heavy in experience from the event-apparel industry. "These are guys who would wait until the fourth inning of the World Series before they started printing up the Red Sox T-shirts," says Bert. "They're used to pulling things off at the last minute."
The company's retail customers give it generally high marks for service, although a few cite supply-chain hiccups as the business has expanded. "To serve a company our size you have to have your back room in order, and they do very well in terms of delivery," says Sally Jewell, CEO and president of REI, an outdoor gear retailer with just over $1 billion in sales. Last year Life Is Good was among REI's top 50 best-selling suppliers, out of 1,500, and one of 15 nominated by management for Vendor of the Year.
Small retailers--which constitute about 98 percent of Life Is Good's accounts and 60 percent of its business--single out other aspects of its performance. "They do their inventory right so it's deep, with lots of categories and styles, but not so wide in terms of colors that you can't decide what to carry," says Greg Rowe, co-owner of two small Genuine Neighborhood Shoppes--both called Life According to Jake--in Gatlinburg and Knoxville, Tennessee. "The owners' enthusiasm filters down through every employee," says Julie Titone, owner of Harbor Goods, a GNS in Gloucester, Massachusetts. "From the warehouse crew, the customer service reps, the returns department--everyone is a pleasure to work with."
The Jacobses' ability to maintain that service level will be tested by the company's growth. Genuine Neighborhood Shoppes move far more Life Is Good product than do multibrand distributors, so their demands will by definition be greater. Fortunately, the GNSs have more predictable needs, which makes stocking them easier. In addition, the company is investing in just-in-time reporting systems to ensure that a run on Jake-on-a-mountain-bike caps doesn't leave the storeowner staring at an empty shelf.
The other challenge involves product diversity. Life Is Good has always been a strong presence in resorts, beach towns, and other destination areas; now it is expanding into cities and communities where people shop year-round. That means refreshing product lines more than twice a year--which has been the schedule until now. Toward that end the Jacobses are adding a holiday launch, and are also considering a resort season line.
Choose your IP battles. Another thing that bugged me about Life Is Good was the trademark question. What made these Joes think they could protect what may be the most easily ripped off intellectual property since the smiley face?
The answer is that they know they can't, or not completely. The company has girded itself with a portfolio of trademarks on phrases ("Life Is Good," "Do What You Like, Like What You Do") and images (notably Jake). Still, "we probably get three or four imitations a week," says Bert. "There was 'As Good As It Gets.' There's one right now called 'The Good Life." Such copycats, as well as parodies like "Life Sucks," which appeared briefly in department stores a few years ago, earn a warning letter from the company's counsel. Life Is Good is far more concerned about blatant knockoffs. "We've had people fill whole stores with counterfeit Life Is Good stuff," says Bert. "We go after them hard."
