But We’ll Be Back
Enjoy the rest of the summer and Happy Labor Day.
See you September 2nd.
The Gap once again ranked last in our Customer Loyalty Engagement Index this year. Rankings in January were:
1. Victoria's Secret
2. H&M/American Apparel (tie)
3. J. Crew/PacSun (tie)
4. American Eagle Outfitters/Abercrombie & Fitch (tie)
5. Old Navy
6. The Gap
These metrics correlate with brand engagement, customer behavior and sales, so we weren’t surprised to see the Gap posted –11% same-store sales for last month. But all is not lost. Maybe. Possibly.
The chain, which has been in a death-spiral of same-store sales for as long as we can remember, is opting to leverage a trend we identified quite some time ago: customization. Consumers’ heightened feelings of control about virtually every aspect of their lives (but particularly where they shop and what they buy) and a response to the commoditization of virtually everything has reveled itself in the desire for more customized stuff.
In 57 categories containing nearly 400 brands, we found the average percent-contribution “customization” makes to product and service engagement, adoption, and loyalty (and, therefore, profitability) is currently 18%. That’s nearly 5 times what the value was when we first measured it in 1997 when it was only 4%. The climb has been constant and seemingly without a ceiling. And leverageable for those who do it right.
So the question is, will a set of black and white photographs featuring a diverse group of actors and style makers (including Ginnifer Goodwin, Edgar Ramirez, Catalina Sandino Moreno, Melvil Poupaud, Clemence Poesy, Joe Anderson, Georgina Chapman, Julia Restoin Roitfeld, Scott Schuman, Leigh Lezark, Max Lugavere, and Jason Silva) each wearing Gap clothes in unique ways (according to The Gap) be seen as “customization” or “celebrity spokespersoning?”
Not content to stop with celebrity wardrobe designing, and to further bring the idea of customization to the brand, the campaign also features taglines built around the theme of “your own.” Apparently each individual in the campaign also provided a handwritten response to various fill-in-the-blank taglines, offering (also according to The Gap) “a glimpse into their personality and capturing the emotion of each image.”
One can only wonder if looking like someone else just might defeat the purpose. Only time, and same-store sales, will tell.
You know the old joke. Labor Day is a glorious holiday because your child will be going back to school the next day. It would have been called “Independence Day,” but that name was already taken!
But this year retailers aren’t laughing. High gas prices and a weakened economy are having their effects. $590 is the average consumers are going to spend for back-to-school clothes and supplies this year.
Our 10,000-household survey found the following average-spends versus last year:
Clothing $275.00 (+ 6%)
Computers, software, printers $210.00 (unchanged)
Shoes (athletic & dress) $110.00 (+ 10%)
Supplies $100.00 (+ 5%)
Books and study aids $ 25.00 (+ 2%)
The breakdown of “preferred” retailer-types was:
Discount Stores 85% (+ 10%)
Department Stores 55% (+ 5%)
Office Supply 50% (+ 5%)
Online 40% (+ 15%)
Specialty Outlets 32% (- 8%)
Catalogs 25% (+ 12%)
Online and catalogs are showing up considerably higher as retail distribution outlets. That’s where higher gas prices are having their biggest effects, and impacting the Specialty stores where prices are perceived to be higher no matter how many sales they advertise.
And while the economy is having an impact on overall spend, what brands get what piece of the academic pie remains a fundamental lesson in customer loyalty: Loyalty always equals profitability.
And these days that’s nothing to laugh at.
As we move into the latter half of summer, and as you put together your list of best selling beach reading, you might consider taking a few magazines with you. It seems as if the first half of 2008 has proved most unkind to the magazine business.
Newsstand sales have taken a beating. Single-copy sales of magazines fell nearly 7%. Traditional leaders like Cosmopolitan fell 6%, Vogue slipped 15%, and O, The Oprah Magazine, fell 17% in newsstand sales alone (and another 2% in paid circulation). Among the newsweeklies, Time fell 7% and Newsweek plunged 17%.
People bucked the trend, as did Vanity Fair, both up 6% at the newsstand. New York magazine was up nearly 4%, but still, the numbers aren’t encouraging.
As you have fun in the sun, it’s worth remembering that in the history of modern marketing and advertising it has never been easier to get your message out to appropriate audiences. Engaging them, however, is a far different matter.
You need to get your media planning right. Here “right” doesn’t mean getting it out to the right demographics (today that’s pretty much a given) it means that the values inherent in the magazine itself actually reinforce your brand’s values. Do that and engagement will be high and you’ll always see higher attention paid to your ad, have consumers think better of your brand, and, ultimately, see higher sales.
And in the battle of “getting it out” and “getting it right,” right is always the better way to go.
Last week Nike, the world’s largest sportswear manufacturer, pulled its ads for Hyperdunk basketball shoes. No, there was nothing wrong with the shoes. They were responding to some bloggers who had dubbed the ads homophobic, anti-gay, and offensive to African-Americans. Apparently the ad was a basketball triple threat.
The controversy arose over posters and billboard ads showing a basketball player's face in the groin of an opponent who is dunking a ball above him, accompanied by the slogan, "That ain't right!"
Previously Nike had quickly defended the ad saying that it was based "purely upon a common insight from within the game of basketball -- the athletic feat of dunking on the opposition, and is not intended to be offensive." They pulled them equally quickly to underline their “ongoing commitment to supporting diversity in sport and the workplace.” No waffling there!
Anyway, as “gender consciousness” has never been identified as an athletic shoe category value of any consequence, we can’t quantify the degree of “gender consciousness” customers attribute to various athletic shoe brands. We can, however, rank them according to engagement and loyalty and this year the list looks like this:
But given the difficulty brands have engaging consumers and differentiating themselves in today’s marketplace, gender consciousness seems a relatively easy value to manage. If it seems inappropriate, sacrifice the shock value and just don’t do it!