Freitag Case Essay
Freitag — The Designer Bag With a Conscience Credit-Suisse: 17. 03. 2008 It’s been 14 years since the bag made from recycled truck tarpaulins and seat belts was invented by the Freitag brothers. A decade ago, their designs caused a furor in Zurich and now that interest has traveled as far as Tokyo. This is the story of a company that is holding on to its Swiss roots while growing globally, but at a sustainable pace.
Freitag: Two teenaged Japanese tourists sit in a Zurich restaurant over coffee, admiring each other’s latest textile acquisitions: a Freitag F13 bag, a Freitag wallet, a Freitag iPod case.It’s no surprise that tourists from around the world know about Freitag. In fact, its flagship store in Zurich figures prominently in lots of guidebooks. Not only the selection of unique bags lure customers in, but also the store itself, which is a 26-meter tower made of old shipping containers. But what is it really about Freitag that tempts tourists to add the Freitag store to their list of sights to visit, and then spend up to 200 Swiss francs on a bag made from old truck tarps? It’s a product with distinct values.Freitag Is a Strong Zurich Brand It was 1993 when the brothers Daniel and Markus Freitag introduced their first Freitag bag with its distinctive, unisex design. The bag caught on fast with young people in Zurich, and soon became a must-have item, mainly because they were colorful, original and carried a message about environmental friendliness, as they were pieced together from bits of recycled truck tarps. That year, the brothers produced just 40 bags – by 1994, it was five times as many.
The brothers’ timing was just right: This was the period when people, students especially, were getting into heated arguments about the destruction of the forests, the importance of recycling and the detriments of environmental pollution. So the two designers were suddenly hailed as visionaries. Sales growth has continued uninterrupted since 1994, and it’s still reaching double digits today. The product range has also now grown to 50 different accessories: travel bags, shopping bags, and laptop and iPod cases.
The privately held company doesn’t disclose revenue but says that production in 2007 totaled 160,000 items, compared with the 40 the brothers produced in their first year. “It was always the product, its design and functionality that mattered most then, and now,” says Alex Braunschmidt, Freitag’s marketing manager. “We don’t have the ambition to launch as many new products as possible, but rather to ensure quality. ” As recently as 1996, the brothers Freitag were the only employees of their company.Today, Freitag employs 64 people – most of them at a factory in Zurich, which handles all production processes except sewing. Immanuel Streuli, Freitag CEO since 1997, says the production facility in Zurich has a particular significance for the company.
“It’s an excellent geographical location,” he says, “and our staff and suppliers apply very exacting quality standards. On top of that, its Swiss roots and the city of Zurich give the Freitag brand a human face. The brothers’ history and their personalities are inextricably bound with it.
Japanese consumers respond with particular sensitivity to these Swiss values. These core values are a unique selling point for the company, according to Regula Fecker, strategic planner and partner at Rod Communications in Zurich. “Freitag has succeeded, for a very long time, in combining the values of ‘Swissness,’ sustainability, trend awareness, and the brothers’ personal story into an authentic, consistent brand,” explains the marketing expert Fecker. “Freitag has become a perennial component of Zurich’s image as a stylish, innovative, worldclass city with enormous creative potential. ” Building Brand AwarenessFreitag has been jealously guarding its image since the end of the ’90s, putting specialists in charge of sales distribution and marketing.
The Freitag brothers have always had excellent instincts, surrounding themselves with people whose ideals and skills complement their own – and who put their hearts and souls into beating the drum for the Freitag philosophy, explains Streuli. However, what the company lacked in its younger years was strategic competence. “As with most new businesses, growth during our first seven years was creative – and a bit chaotic,” says Streuli of the then young company. Inquiries came in from abroad, and we did our best to respond to them. What was good about this non-strategy was that we achieved a high degree of awareness incredibly quickly. ” This non-strategic growth also had its drawbacks, which soon became apparent. Freitag bags started turning up in shops that did the company’s image more harm than good, explains Braunschmidt.
If it was to get back to its original values, there had to be a rethink in the marketing department. “Our customers are discriminating, engaged individuals of all ages, interested not just in the product but also in its quality and history,” says Braunschmidt. So we carefully analyzed our distribution channels, only supplying shops that met certain criteria. They had to stock the right brands, and they needed motivated sales staff with a talent for advising customers.
Freitag products, because they are made from recycled materials, look old even when they’re new, and that needs explaining. ” Retailers alone can create brand charisma purely by the way the products are displayed. This is shown by the example of Italy, where Freitag bags, with their used-look, rub shoulders with brands like Gucci and Prada.Freitag’s most persuasive marketing tool remains the product itself. One of the major coups for the company was when the curators of the Museum of Modern Art in New York noticed the genius of the environmentally correct, distinctive designs of Freitag and featured one of its bags in its design gallery when it reopened in 2004. “We don’t spend a cent on classical advertising. We restrict ourselves to events, point-of-sale activities and sales support,” says Braunschmidt of the company’s marketing strategy. Online marketing is becoming more and more important too, and quite a lot of people only make purchases on the Web site, and not in stores.
We therefore apply stringent efficiency criteria to any marketing activity we consider. “Whatever marketing measure the company decides on, it always sticks faithfully to the Freitag credo: loving attention to detail. For example, a photograph is taken of every bag produced, then attached to it with a description of how that particular model came about. Sustainable Growth Is at the Heart of Freitag This is just the sort of detail that appeals to Japanese consumers, says Braunschmidt.
As soon as they have discovered a product and accepted it, they want to learn all there is to learn about the story behind it – and they become real fans,” explains Ken Jungnickel, who has been working in Japan since 1992 as a Freitag partner with responsibility for distribution, sales and marketing. “The tarp was practically unknown as a raw material in Japan,” says Jungnickel, who is half-Japanese, half-German. “So for the first few years the product needed a lot of explanation. But now the brand is totally in, with a current degree of awareness comparable with that ofSwitzerland. ” Freitag products are now on sale in 36 Japanese city center shops.
“What’s currently happening in Japan, is just what happened in Switzerland between 2000 and 2003,” says CEO Streuli. “We are now concentrating on markets with a similar growth curve, and in which the product is well understood, including urban centers in Japan, Germany, Benelux, Italy and Scandinavia. The potential for growth is gigantic.
” This is particularly noticeable in markets such as California, where free-thinking is part and parcel of the progressive lifestyle in the Golden State.Many people buy organic food, drive hybrid cars – and sling Freitag bags over their shoulders. Apparently, the Freitag brothers’ product and concept credibly personify both ecological and economic sustainability. However, what Freitag wants to create isn’t a boom, but a long-term customer relationship – and hence soundly- based growth for the company. This principle is not only close to the hearts of the people who own the company, it’s also in the nature of how its products are produced. Freitag’s raw materials are old tarps, inner tubes and seat belts – and there’s no actual market for these.This means keeping a close eye on supply-side growth, which reins in any exuberant tendency to go overboard in production – and in its turn creates a welcome product scarcity.
That makes it easier for Freitag to cultivate the image of its products as collectors’ items, which is why the Freitag flagship store is a standard item on the Zurich sightseeing tour for Japanese teenagers and other environmentally aware fashionistas. The Brothers Freitag: A Textile Fairy Tale In 1993 Markus and Daniel Freitag, both graphic designers, were looking for a suitable material for their bag designs.Inspired by the heavy-goods traffic thundering past their Zurich apartment overlooking the autobahn, they made a bag from old truck tarps, bicycle-tire inner tubes and seat belts, thus triggering a new trend in the world of handbags. They sewed the first models in their living room.
Today the bags come into being just down the road, in the 2,800-square-meter workshop of what used to be the Maag gearwheel factory in the former industrial sector of the city, which now is a trendy quarter with a vibrant nightlife. Today, about 50 designs are made at this factory.In addition to the three Freitag flagship shops in Zurich, Davos and Hamburg, the products are on sale in over 350 shops worldwide.
The Brothers Freitag: A Textile Fairy Tale In 1993 Markus and Daniel Freitag, both graphic designers, were looking for a suitable material for their bag designs. Inspired by the heavy-goods traffic thundering past their Zurich apartment overlooking the autobahn, they made a bag from old truck tarps, bicycle-tire inner tubes and seat belts, thus triggering a new trend in the world of handbags.They sewed the first models in their living room. Today the bags come into being just down the road, in the 2,800-square-meter workshop of what used to be the Maag gearwheel factory in the former industrial sector of the city, which now is a trendy quarter with a vibrant nightlife.
Today, about 50 designs are made at this factory. In addition to the three Freitag flagship shops in Zurich, Davos and Hamburg, the products are on sale in over 350 shops worldwide.