Airstream is trying to make the most of unprecedented boom times today while continuing to overhaul the king of upscale recreational-vehicle brands for the long term, by strengthening and broadening its product line, its brand and its related services.
Sales of the silver-bullet-shaped travel trailers have reached wall-busting levels at dealerships this year – as for most of the rest of the RV industry – as a new cohort of customers has entered the market beginning amid the depths of Covid. Restrictions on mass travel, and lockdown loopholes favoring the outdoors, combined with continued strength in employment and income by upper-level consumers during the pandemic to give Airstream and its expensive trailers a boost that took CEO Bob Wheeler by surprise.
“We expected a big drop in business initially,” the chief of the Jackson Center, Ohio-based unit of RV-brand holding company Thor Industries told Chief Executive. “Instead, we’ve been delivered an enormous group of new customers that we might not have seen without the pandemic. That’s true across the industry. So how do we make sure we don’t squander this opportunity?”
For Wheeler and other top Airstream executives, the company’s top-of-the-line products, sterling brand, robust dealer network and state-of-the-art manufacturing plant are assets they’ve only begun to deploy.
First they’re trying to make a dent in a “historic” backlog. “Typically, we were out about 12 weeks,” even during the decade-long industry boom that began after the Great Recession of 2008 and 2009, Wheeler said. “Now, if our dealers didn’t take another retail order starting today, it would take us about a year to fulfill the retail orders in our system and to rebuild inventory.”
Wheeler said Airstream is trying to “grow our output in a controlled and intentional manner no faster than we can maintain and improve our product quality.” Covid cases among the workforce were a hindrance early, and labor is still at a premium today, though Airstream factory jobs are among the best available in west central Ohio.
“And there’s no quick automation solution to overcome the manpower issue,” Wheeler said. “That’s part and parcel of the brand we have built,” which depends on nearly artisanal attention to putting together an Airstream trailer more like a house than a car. Airstream has plenty of extra capacity within its existing plant footprint, he said.
Supply-chain challenges have developed into a game of “Whac-a-mole,” Wheeler said, in which “engineering has to stand by to re-engineer things sometimes on a daily basis. When a supplier says they can’t get us what we need, we have to scramble to look for alternatives. It comes down to substitutions.”
Proper handling of the flow of younger buyers and newcomers to Airstream, and to RVs in general, is another challenge. “We want to make sure the new buyers who’ve come to us out of convenience fall in love with the Airstream lifestyle, to make them lifetime customers,” Wheeler said. “We’re trying to build the business for the next 10 to 20 years.”
In that regard, Airstream is leaning into the remote-work trend and developing this phenomenon as a long-term feeder for the brand. To that end, for instance, the company is unveiling a new version of its 30-foot Flying Cloud model “with a specific floor plan that allows for a fully functional workspace,” Wheeler said. “It’s an office model with full living quarters with everything you’d need to work comfortably from anywhere.”
Increasingly, Airstream also is leveraging the appeal of its iconic brand. Its highly recognizable products are featured in lots of movies and TV shows, and celebrities including actor Matthew McConaughey and country singer Miranda Lambert have made the Airstream lifestyle part of their online identities. Airstream also is increasingly harnessing online content so other owners can tell their stories, in venues such as an online newsletter, The Rivet – a reference to the riveted aluminum panels that clad all Airstreams.
“One of the best things we have from a marketing standpoint is all our customers are evangelists for the brand,” Mollie Hansen, Airstream’s chief marketing officer, told Chief Executive. “We elevate voices to tell their own stories as much as we can; we have such a rich community, and people are vocal about their love for Airstream. So we tell stories as well as provide information that helps people understand what they’re getting into.” Newbies’ guides share “things you’re going to need” to enjoy the Airstream lifestyle as well as “great places to go, and the resources to get there.”
Airstream also has gotten very proactive about extending its brand in other ways. Airstream Supply Co.. launched in 2019, is an online magazine, travel guide and outfitter that helps “Airstreamers” navigate the lifestyle. It also serves as an outlet for the brand to sell related accessories made by other companies.
“People were having to go out and purchase lots of other things for the Airstream experience,” Hansen said. “Things like outdoor furniture and grills and things for inside the trailer. So we thought, ‘How can we bring some great products to the community and also tell great stories?’ We can communicate with them through this platform, help them get excited about going outdoors, and – for those who own an Airstream – curate great products. It’s a brand-building tool we’ve had great success with.”
Airstream increasingly also has been reaching out to other iconic brands, ranging from Ugg to Pottery Barn, to come up with co-branded appeals to Airstream owners. “With Pottery Barn, they recently created a line of in-home accessories with us,” Hansen said. “It’s a long-term partnership.” And Airstream is helping incubate small brands with complementary product lines, such as Kuma, a Canadian maker of outdoor furniture that was seeking a U.S. distribution system.
Another major thrust for Airstream’s brain trust has been helping newbies understand some of the financial basics of buying an RV, including educating them on how financing an Airstream purchase is different from financing a car. So Airstream just announced a new partnership with Bank of America called Airstream Financial that sets up an online platform and other ways of communicating with customers about the ins and outs of RV financing before they go to a showroom to buy an Airstream — and take their confusion with them.
Helping consumers understand how they can finance a purchase of vehicles that can cost hundreds of thousands of dollars is key to continuing the boom, Justin Humphreys, Airstream’s vice president of sales, told Chief Executive. Grasping this understanding almost always is good news for someone shopping for an RV. That’s because RVs qualify for tax deductions as a second home (as long as they’re not a third home), meaning that the initially daunting picture of paying for an Airstream over the long term may not be quite as intimidating to a buyer who harbored wrong assumptions.
“You can get financing for up to 20 years for an RV, while with a car of course it’s under 10 years,” Humphreys said. “So there are some big tax advantages.”
And lenders including Bank of America, Wachovia and US Bank have been used to making RV loans for years. The problem, Humphreys said, is that RV dealers’ traditional approach has been to wait until the end of the sales process to discuss financing with buyers.
“It hasn’t been until the consumer buys the product and starts to go into the [finance and insurance] office that they learn about the advantages of financing an RV that they probably didn’t know about,” Humphreys said. “Our concern with that has been that, if they don’t know about financing options early in the buying cycle, they might not think they can afford the monthly commitment because they’re thinking about it in terms of a car loan.”
The aim of the partnership with Bank of America is to help educate potential Airstream buyers in advance and to streamline the financing process for them. “The process is streamlined from the customer’s first visit to a web site, which offers things like a loan calculator and the ability to ask dealers a question,” Humphreys explained. “We’re helping customers build an awareness about exactly what it will cost earlier on in the process rather than later.”
And while Airstream dealers will continue to be able to offer other forms of financing, Airstream Financial also will become a platform for offering “other services and programs” in the future — such as, perhaps, a leasing program, in an industry that currently doesn’t lease vehicles.
The new Bank of America partnership goes hand in hand with Airstream’s overall efforts to refine its retailing system out of what can be a confusing morass of brands, vehicles and alternatives at the typical U.S. RV dealership. One after the other, Airstream has been working with dealers to establish independent, Airstream-only outlets that are in huge climate-controlled facilities — and only offer Airstreams. There are 25 of them across North America now.
For example, in the Dallas-Fort Worth area, Vogt RV has erected a 60,000-square-foot, completely climate controlled new outlet called Airstream DFW. “They sell nothing but Airstreams there,” Humphreys said. “It’s completely transformative for us and the dealer, and customers love it. It’s a brand experience, and it’s only Airstream.”