DIFFERENTIATE OR DIE-PRODUCT
Byline: Miles Socha
It’s not enough to have a great brand in today’s apparel market. You have to feed it, nurture it, tweak it and constantly reinvent it. Otherwise, you’re history.
That was the overriding message from a diverse panel of apparel manufacturers asked to describe how they differentiate themselves from the competition.
Acknowledging that product innovation is not enough, executives focused on a wide range of initiatives, from consumer research to innovative marketing, to excite their target customers.
Consider Sara Lee Intimates, which has a large stable of brands in bras, a product which, despite innumerable expressions and variations, ultimately ends up being part of an inevitable “sea of bras” in stores, said Lee Chaden, president and chief executive officer.
“Virtually all the big guys are trying to meet the same broad consumer needs. The key is brand positioning,” he said. “Each has to have a unique point of view and character so the customer knows what she can expect.”
Sara Lee’s $1 billion intimate apparel businesses span the Playtex, Bali, Wonderbra, Ralph Lauren, Hanes Her Way and Just My Size brands, which add up to a 30 percent share of the total bra market. Focusing on the Playtex and Wonderbra brands, Chaden demonstrated, with advertising images, how each targets a different consumer.
Playtex, he said, is for women who value fit, comfort and durability — and not much else. They just want the bra to do its job so they can get on with their lives, he said. Wonderbra has more “attitude,” and is aimed at “lingerie enthusiasts” who want to express their personalities with their intimate apparel.
“The magic is having a unique brand character which can be developed and nurtured,” he said, citing more than 20 percent growth in the Wonderbra brand.
To foster differentiation, Chaden said, a manufacturer must know its target customer inside and out, must maintain a consistent product and communications stance — and then be patient. “It’s not easy, but it’s well worth it and will build sales and profits,” he said.
William Green, director of marketing development at VF Corp. and moderator of the panel discussion, stressed that differentiation and innovation are not onetime events. A continuous effort is needed.
“If you don’t differentiate, you risk becoming a commodity,” agreed Thomas Fanoe, president of the Levi’s Brand USA, acknowledging that Levi’s has lost market share and relevance with the key youth market in recent years. “You need to surprise the consumer and know what they want before they want it.”
Fanoe said fashion trends are moving at an ever-faster pace, spurred by young consumers. It’s prompting Levi’s to step up new product innovations.
“Consumers are asking for more and expecting customized products,” he said. Levi’s plans to expand its Personal Pair service, which fits jeans to the customer’s dimensions, to 50 more retail locations by the end of 1999, bringing the total to 100. Levi’s also plans to offer consumers a wider range of fabrics for more custom looks.
Levi’s taps into its customers’ priorities and mind-sets in several ways, among them an Internet site and an 800 number where consumers can talk about the products. “All of these efforts help us get closer to the consumer so we can better create new products,” he said. “In the future, you’ll see more new products and more nontraditional marketing than you’ve ever seen before.”
During the critical back-to-school selling period, Levi’s plans to focus on dark, cuffed denim in television and print ads that pitch the look as “hard denim” and “industrial-strength fashion,” Fanoe said.
Getting to know the customer, through formal or informal means, was a recurring theme among panelists.
“Every customer we have is our focus group,” said Richard Cohen, president and ceo of Italian men’s wear firm Ermenegildo Zegna’s North American division, where volume has catapulted 1,500 percent in the past 10 years.
Zegna, with more than 200 stores worldwide, closely tracks its consumers with “idea cards” that list vital information about them — age, income, dimensions, purchase history and lifestyle — so sales associates in any location can greet consumers like members of the family. When visiting foreign locales, customers are given maps of the city, listing key sites to visits — and all Zegna outlets.
Going against the majority’s preoccupation with following the consumer’s lead, Cohen argued that customers do not always know what they want and it’s up to the vendor to create the desire to purchase.
He described Zegna as a “small, Italian family business that thinks globally,” generating annual wholesale volume of about $700 million. Zegna is completely vertical; it manufactures its own fabrics for its own line of high-end men’s wear and for other designers.
And Cohen did not address the thorny issue of chargebacks directly, he stressed that his company closely monitors sell-throughs at the wholesale and retail levels. He said he challenges retailers to buy less merchandise, but sell more of it at regular price. “Forget about selling more. Sell better,” he said.
In a wacky presentation with the expert pacing of a comedy routine, Joe Boxer’s chairman, founder Nick Graham, managed to convey that out-of-the-box thinking wins favor with shoppers. It helped what propelled the firm to 77 percent brand awareness among its target consumers. Since its inception, the company has shipped more than 50 million pairs of boxer shorts, making it the number one boxer firm in the country.
Graham, without a doubt the only “chief underpants officer” at the CEO Summit, said he recently commissioned a California physician to do a study that explores the link between humor and improved immune-system function. Ultimately, Graham hopes to translate the findings somehow into his business.
His mantra: “The brand is the setup, the product is the punch line.” In support of that concept, Joe Boxer plans to align its name with upcoming comedy festivals and fund-raisers, tell jokes 24 hours a day over a digital readout under its billboard in New York’s Times Square and stage a “cartoon couture” show June 9 at Warner Bros.’ Manhattan flagship store as part of a major co-branding effort.
Remember how he flew dozens of American editors to Iceland for a major fashion show? Well, guess where he wants to go next? Hint: You can find great cigars and lots of hammers and sickles there.
Edward M. Jones 3rd, president and ceo of Segrets Inc., parent of Sigrid Olsen, said differentiation depends on “staying connected” to the customer. It helps having a living designer who can interact with women on the Internet and at personal appearances. And it helps having a work force that is 90 percent female and can provide ongoing feedback on the fit and styling of the clothes.
He described his firm’s marketing posture as “tangible, empathetic and accessible,” and cited Liz Claiborne and Estee Lauder, when they were active in their businesses, as having built a “real in-store presence.”
Jones said his firm connects with its customers through advertising and shops-in-shops, and point-of-sale and direct-mail materials. Jones, who has made no secret in the past that he’d like to take Segrets public someday, said it’s important to build a brand rather than a business, to create demand instead of supplying it and to focus on quality instead of quantity.
He credited that philosophy for a 32 percent compounded annual growth rate over the past four years. At present, the firm sells its Sigrid Olsen Collection, Sigrid Olsen Sport and So Blue lines to 1,500 accounts.
Terry Lay, president of The Lee Apparel Co. Inc., said his firm has stepped up its commitment to consumer research, increasing the investment more than fivefold and integrating those activities with product development.
Lee Dungarees, a new jeanswear brand aimed at 17-to-22-year-olds that is bowing in stores this month, is the latest product of that research. Lay said the company talked to more than 3,000 consumers to develop the product concept and marketing plan. And they contributed in real ways.
Shown elements of Lee’s jeanswear archives, the young adults gravitated to the Dungarees name, the “Can’t Bust ’em” tag line, and Buddy Lee, a 14-inch corporate “spokesdoll” from the 1920s who has been resurrected as the central character in Lee’s $30 million promotional campaign for the new brand.
“They wanted differentiation,” Lay said. “They didn’t want what their mom and dad have, nor what their little sister or brother had.”
Only two years ago, Lee was the only brand in the firm’s stable. Today, there are several subbrands, each targeted at a different consumer group and backed with different product concept and marketing programs, Lay said.
“Items don’t work anymore,” he said. “We’re looking for concepts.”
Lee’s Pipes subbrand is an example of another concept that was developed with the input of the target customer: boys and girls age 10 to 14 who like active sports like skateboarding, in-line skating and off-road biking. There’s a reason the jeans have reinforced knees and no fewer than seven pockets. Lay said the kids told them they need the room to carry cellular phones, pagers and pictures of their friends.
Lay stressed the value of finding out what’s important to the consumer, rather than trying to impose an idea of what’s fashionable or functional.
But joining Zegna’s Cohen, Barneys’ Gene Pressman and some other opinion makers who believe consumers often need to be led rather than followed, Ron Frasch, president of GFT USA Corp., said his company tries to win market share on the basis of product. He asserted, “People don’t go into stores to be serviced first, but to buy something.”
Citing GFT’s Giorgio Armani Le Collezioni business as an example, Frasch said the company focuses on building volume in its current distribution, securing the most desirable real estate, managing the business at the point of sale, improving visual presentations and getting a stronger handle on brand image, which is often defined by retailers and is therefore inconsistent.
He said such efforts have led to an per-door increase in volume with Armani of more than 30 percent, and profitability growth that exceeds sales growth — despite what Frasch described as marginal growth potential for designer products, increased competition and the need for substantial infrastructure investments.
The goal is to project consistent brand image and offer a uniform customer experience across the U.S. “We believe that the customer belongs to us,” he said.
Letting apparel makers know they are not alone in their efforts to differentiate in a crowded marketplace, wine maker Michael Mondavi, president and ceo of Robert Mondavi Winery, told the audience that it’s not unusual for a grocery store to stock more than 300 selections of chardonnay. In California, there are more than 900 UPC codes registered for that particular grape variety.
Mondavi also gave an example in the wine making industry of how tradition can prohibit change. He said the foil cap that shields the cork on most bottles was created to prevent rats from eating the corks as wines aged in warehouses. The caps persist today, despite the fact that rodent problems have been eradicated.
Mondavi introduced a cap-less bottle with a signature drip-proof lip that it deliberately did not patent, in hopes its competitors will copy it and move the industry forward, he said.