Driven by Emotional Customer Engagement, Fanatics Wants to be No. 1 Fan Brand in the World

At the end of his compelling session, “Fueling Fan Passion: How Fanatics Creates Emotional Engagement and Customer Loyalty,” Monday at the 6th annual Engagement & Experience Expo presented by Loyalty360, Doug Glazer, director of customer loyalty for Fanatics, the largest online retailer of licensed sports apparel and merchandise, said the company wants to be the No. 1 destination for fans.

“We’re building an incredible brand, not chasing a T-shirt sale,” Glazer said.

And Fanatics, which registered $1 billion in sales in 2015, the “attraction” is there for fans.

But, in recent years, Fanatics started on a journey to redefine its brand and its business, and for the first time in its 21-year history, put the focus where it belongs – on the fans. For Fanatics, the largest online retailer of licensed sports apparel and merchandise, emotional customer/fan engagement is sparked by the deeply-rooted loyalty customers have for a professional or collegiate team.

Doug Glazer, director of customer loyalty for Fanatics, talked about the company’s broad reach armed with a vision and mission to become the No. 1 fan brand in the world.

“We amplify pride and create connections for all fans,” Glazer explained. “We’re a growing apparel manufacturer, with new licensing deals that will increasingly put Fanatics at the center of the Fan experience over the next several years.”

This week was a notable one for Fanatics, after it signed a deal with Under Armour whereby the two companies will replace Majestic and Nike as the official uniform partners for Major League Baseball.

The deal is scheduled to begin in 2020 and run for 10 years. Under the terms of the deal, Under Armour will make all on-field apparel, including jerseys and game-day and training outerwear, that is currently made by Majestic and base-layer gear that is made by Nike.

Fanatics, the largest sports retailer, will make the merchandise that will be sold to fans, serving as both the producer and the seller. Fanatics, which currently runs all four of the major North American sports leagues’ online sites plus NASCAR’s, will also be the distributor of the merchandise to retailers.

“It’s a huge deal for us,” Glazer said.

After it surveyed 8,000 fans who had purchased fan gear in the past 12 months, Fanatics identified four segments of Fans:

Fans of the Sport: Driven by loyalty (These are hardcore and casual fans who enjoy the game and the camaraderie of the game experience)

Fans of the Gear: These are younger, fashion-conscious fans who like the style as much as the sport

Fans of the School: These are proud alums who remain committed to their alma maters long after they’ve left school

Fans of Fans: These are gift givers who are likely fans themselves, but are acting on behalf of someone special
“We’re aiming the Fanatics brand at fans of the sport and fans of the school – our FansEdge brand has taken on a younger, slightly edgier tone that speaks to fans of the gear,” Glazer said.

Fanatics is becoming a fan-driven company.

“There have been quite a few steps on the journey to becoming a fan-driven company,” Glazer said. “First, establishing our mission. Second, understanding our fans and taking a fans-eye view of our offerings. Now third, overhauling our brand and customer experience to focus on the fans, rather than the products.”

Fanatics started with its logo, making it more contemporary and appealing to a wider audience.

“We overhauled the website, which is still evolving, to focus on fans and connections, rather than the gear itself,” Glazer said. “You’ll notice that on Fanatics home page you’ll never see an image of one person alone – we always feature groups or couples to emphasize the shared connections between fans. At the same time, we were overhauling our consumer-facing UX, we were establishing new internal principles to guide our culture and support the new mission. These tenets, and leadership’s ability to gain buy in, has been as or more important than any of our customer facing changes at driving customer satisfaction and growth.”

Glazer discussed five principles that, when taken together, provide an incredibly powerful punch for driving and sustaining excellence.

By fans for fans: Yes, many of us are sports fans, but what this really means, as I’ve already said, so I won’t belabor it, is that we take the fans perspective in everything we do.

Win as a team: We are not political. No, really. One Fanatics means we all work to a single goal and make decisions, tradeoffs or compromises that are the right ones for the greater good, not one department or business unit.

Missionary: We’re building an incredible brand, not chasing a T-shirt sale. We think big picture.

Innovative: We value innovation, fresh ideas, and new thinking.
Execute: Not quite ready, fire, aim, but we definitely have a bias for action.
Creating fan loyalty and engagement takes company-wide buy in and execution, Glazer noted, as he related a key story that started four years ago.

“Four holiday seasons ago was a disaster for Fanatics – thanks to aggressive promos and weak inventory planning, we were out of stock early on popular styles and sizes,” Glazer explained. “Apart from leaving significant revenue on the table, the stock outs created a terrible customer experience. From that low point, our merchandising team created the MVP – Most Valuable Product – program to ensure that customers would have a great experience all the way through the holidays. We’re now aggressive regarding stock levels.”

Over the past several years, Fanatics has taken over several destination retail operations.

For example, The NBA flagship store opened its doors in Manhattan on Fifth Avenue almost exactly a year ago.
The store features three floors of NBA gear, memorabilia, and merchandise, as well as interactive fan experiences – apparel customization, memorabilia displays, interactive touch screens, games, and event space.

“We recently hosted the launch of an apparel partnership with RUN DMC and a private shopping party for Rewards members,” Glazer said. “The store is a magnet for tourists and is great showcase for both the league and Fanatics.”

Recently, Fanatics announced it signed long-term contracts with the NBA and NHL to produce the official replica jerseys.

“I wanted to take you quickly through the development of our NHL jersey because it’s a great example of using VoC research to understand fans’ needs and build a better product that they’ll truly love,” he said. “We interviewed over 1,500 fans and their input was crucial in the development of our jerseys.”

Here’s what fans had to say about their jerseys:

They’re heavy, inflexible, abrasive, hot, and hard to move in – I’ll take two!

They generally fit poorly

The heavy, inflexible team crests are a real problem for women

Trims chafed

And sizing wasn’t well matched to real people

Fanatics officials took that insight and solved the problem.

“They started with a proprietary midweight fabric that’s durable, breathable, wicking, soft, stretchy, and provides great range of motion for hockey fans,” Glazer said. “They added FanFlex, an embossing technique that looks great but makes crests and logos easier on the wearer. FanShield antimicrobials keep even the most intense fans pleasant to be around. FanID adds premium, comfortable tags. And finally, FanFit – cuts that fit real men and women who are most likely not wearing pads underneath.”

What’s more, Glazer is very proud of the Fanatics Rewards loyalty program.

“As all rewards programs should, Fanatics rewards supports and reinforces the parent brand,” he said. “As such, our mission with the program is to strengthen bonds for fans of all kinds. And we say strengthen very specifically because we see the program as a way to reinforce the connections the company aspires to create. Yes, of course we expect our investment in the program to have a net positive impact on the business. But even if it doesn’t, we believe showing our fans that we’re devoted to them and by continually striving to earn their loyalty is important to creating emotional engagement.”

Fanatics celebrate fans by unlocking unforgettable experiences.

“We give fans the chance to live a dream – throw out the first pitch at a ball game, meet their hero, play catch with a rising star,” Glazer explained. “We invest in moments that bring fans closer. We create ways for our fans to win, regardless of the score.”

Fanatics runs valuable promotions that enable members to build meaningful balances, reinforced through ongoing marketing efforts.

“We run targeted giveaways, leveraging the assets our partnerships bring us, to delight fans with what they love,” he said. “We provide member-exclusive deals, which elevate the experience and drive demand.”

One of Glazer’s favorite stories involves a fan and Hall of Fame pitcher Phil Niekro.

“We invited him (a Fanatics fan) to an MLB Legends dinner to thank him for being a great customer,” Glazer said. “The night was more meaningful for him than we could have imagined. He’d met Niekro as a teen and the encounter had left a lasting impression. Getting to meet one of his heroes again, and thank him for the encouragement he’d given him years ago was incredible, and a great example of the kinds of authentic experiences we hope to provide our fans.”

Fanatics started in 1995 by two brothers as a storefront in a Jacksonville mall to sell Jaguar gear when the team entered the NFL.

They opened an online storefront in 1997 and gradually grew the business over the next 14 years before being acquired in 2011 by Michael Rubin’s GIS Commerce. Rubin then combined Fanatics with Dreams, which had a similar business model but complementary partnerships, and held onto the combined company when GSI was sold to eBay the next year.

Rubin believed that Fanatics had a ton of potential to unlock, and hired ecommerce veteran Doug Mack (most recently from One King’s Lane) to transform the company into a leading technology and marketing innovator. They opened up a West Coast HQ in 2014, which today has close to 300 employees, and hired experienced leaders from Williams-Sonoma, eBay, Orbitz, Amazon, Under Armour, and others to lead the transformation.

Earlier this year, Fanatics acquired Kitbag, the leading site for fan gear in the U.K. and Europe, and established Fanatics International, which will play an important role in the company’s future growth.

“Know your customers and base decisions on their needs,” Glazer said.

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