Gaiam works to own the `LOHAS’ market

Before going public last October, Broomfield, CO-based cataloger Gaiam needed a succinct description of its market niche. It came up with LOHAS: Lifestyles of Health and Sustainability.

According to Bill Capsalis, vice president of marketing for Gaiam, the LOHAS marketplace includes more than 50 million consumers who generate $230 billion in sales of environmentally responsible home goods and textiles, personal development and exercise products, and natural foods, vitamins, and supplements. These buyers have enabled Gaiam to reach $45.7 million in sales in 11 years, with earnings of $1.8 million, or $0.19 per share, for 1999.

In addition to its namesake title, Gaiam publishes Living Arts, which produces yoga videos in addition to selling massage and yoga accessories; natural housewares catalog Harmony; renewable energy supplier Jade; book catalog Explorations; and spa accessories collection Innerbalance. Capsalis says the IPO forced Gaiam to consider how its titles could interact to form a complete brand.

“Being a public company has energized and focused us,” Capsalis says. The result of that new energy is a new goal: “to be a brand endorser – the authority on products and a healthy, sustainable lifestyle.”

Gaiam relaunched its Website in August to reflect that strategy. By presenting editorial content on the site, Gaiam educates consumers about ecological and health issues and supplies more in depth product information that it can in its print catalogs. “The LOHAS buyer is extremely skeptical of product claims. She needs to learn more about what she’s buying than other consumers do,” Capsalis says.

While the Website enables Gaiam to present virtually limitless information in an environmentally friendly manner, the company has no plans to turn away from direct mail. “We’ll never stop using catalogs. They round out the story of Gaiam, and we need them to prospect,” Capsalis says.

Prospecting, in fact, is a major challenge for Gaiam. Capsalis claims that it’s almost impossible to find LOHAS lists for rent. “We struggle to get new customers. Although people who participate in some aspect of a healthy lifestyle often experiment in other areas, it’s not true that someone who does yoga is necessarily taking part in the rest of the lifestyle.” For now, Gaiam is forced to depend on specific lifestyle and hobby mailing lists for prospecting.

Aside from possible acquisitions, Capsalis envisions Gaiam expanding in two major areas: retail and business-to-business. Although the company has no plans to open freestanding stores, its Living Arts videos are distributed at 15,000 retail locations nationwide. Gaiam also plans to open kiosks and store-within-store operations in the future to introduce its other product lines to the retail market.

On the b-to-b side, Gaiam hopes to market a sustainability audit service. The audit would assess companies’ performance on what Capsalis calls the triple bottom line: financial results, employee wellness, and the total environmental impact of all operations. “We can make recommendations on everything from full spectrum, halogen free lighting to exercise programs,” he says. And Gaiam’s Web presence will eventually include extranet sites for its corporate clientele.

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