OFF TARGET? DESIGNERS SKEW YOUNG, BUT 40-PLUS HAVE THE BUCKS
Byline: Valerie Seckler
NEW YORK — Older and richer.
That is the new maxim fashion designers need to follow as they seek to capitalize on consumers’ increasing expenditures in the upmarket channel. The problem — according to marketing mavens, retailers and designers themselves — is that unless they start making a stronger appeal to affluent, middle-aged Baby Boomers rather than focusing on younger, less monied 18 to 25-year-old customers, they will miss the chance to maximize their brands’ potential.
Too often designers’ marketing efforts are pinned to ads that are too cool for their own good. Such ads aren’t relevant to the the older population most willing to open their pocketbooks for designer wares — and in many cases are a downright turnoff because of their almost exclusive use of blemish-free, 20-something models.
“There is a larger, taller, more athletic, 45-and-up customer who is not being addressed today,” said Joan Kaner, senior vice president of fashion direction at Neiman Marcus. “This customer has got expendable income; her kids are grown and gone; she works; she travels, and the designers are missing the boat in marketing to this more mature customer.
“We went through that whole drug culture phase of fashion advertising,” Kaner continued, “and now we’re into a period of overt sexuality. The crotch shot seems to be de rigueur these days. It’s not at all appealing or in good taste. I have been more than a little distressed over the quality of fashion ads and editorial coverage.”
Indeed, Kaner’s take was born out in responses to an exclusive survey of W and Jane readers conducted last month: Only 27.4 percent of the 1,648 polled agreed with the statement, “Designers have the most influence on fashion,” and 12.6 percent disagreed. Another 53.8 percent said they agreed somewhat. And in response to a question designed to test how much women’s style sensibilities and purchases are influenced by designers and their brands, 33.9 percent said they did not “rely primarily on designers for tips on fashion and style.” That query was answered in the affirmative by 7.9 percent, while 52.2 percent said they agreed somewhat.
Fresh figures from the Bureau of Labor Statistics, comparing changes in share of consumers’ wallet between 1990 and 2000, show that designers who are focusing on a customer who’s 25-and-younger are clearly missing a sweet spot in fashion’s upmarket channel. For example, women aged 45-to-54 years old spent an average of $831 on apparel purchases in 2000. That marked the largest dollar amount devoted to clothing by any female age group, on average, that year. By comparison, women among those Gen Xers ages 25 to 34, spent an average of $545 on apparel in 2000, or 52 percent less than the 45 to 54-year-olds.
What both those groups held in common is a double-digit decline in share of wallet spent on apparel between 1990 and 2000, with the Boomers shelling out 18 percent less, and the Gen Xers spending 14 percent less. Those downshifts reflect two broader patterns: the general decline in spending on apparel, food and entertainment by the broader U.S. population as they have upped their spending on housing, health care, and transportation, as well as the price deflation that continues to afflict apparel marketers.
Among the upmarket labels suffering price deflation this year, compared with 2001, are Tommy Hilfiger, whose average out-the-door price at retail is down 20 percent; Nautica, off 22 percent on average, and DKNY, down 4.9 percent, according to Marshall Cohen, president of Port Washington, N.Y.-based market researcher NPDFashionworld. (DKNY ranked as the fifth most popular designer label in the March poll of W and Jane readers.) Holding their own in the price game, in contrast, are Polo/Ralph Lauren, whose average purchase price at retail is off just 0.2 percent; Calvin Klein, which is flat, and Kenneth Cole, whose out-the-door price is up a robust 24 percent, on average. (Ralph Lauren was rated the third most popular designer brand by readers canvassed in the March survey, while Calvin Klein ranked sixth.)
Overall, NPDFashionworld has found consumers are purchasing upmarket apparel brands for prices that are 9.5 percent lower, on average, this year versus 2001. “People are looking for brand names, but at a value,” Cohen stated. “So, a lot of the designer brands are doing well at the designers’ outlet stores and at off-pricers. Brand still plays a role but it’s not the driving factor anymore.”
Asked about their planned expenditures on designer fashion this season, 56.9 percent of the W and Jane readers polled for WWD said they didn’t plan to spend more on those items, compared with a year ago, and 42.5 percent said they did, while 61.5 percent said they think designer clothing and accessories are worth the investment and 37.5 percent responded they did not.
The big change in high-end fashion this year, compared with last, Cohen explained, is that value has topped brand as the premier consideration in consumers’ decisions to purchase designer goods. Brand now ranks second, and style, third, among factors triggering those purchases, Cohen said, in recounting the results of NPDFashionworld’s consumer survey, conducted during the first quarter. That marks a reversal from the results gleaned by NPDFashionworld during the first quarter of 2001, when consumers cited brand as number one, followed by style, and then price, as key determinants.
Designers’ public personae — particularly the longevity of their presence — was cited by observers as a crucial ingredient in the successful marketing of their labels. And for that reason, designers’ own stores are expected to take on a rising significance in getting their marketing message over to consumers during the next several years. To that end, sources also anticipate designers will soon begin making more personal appearances, to make a direct connection with their customers, as they had up until the economy’s boom in the Nineties made such appearances less vital to driving sales.
“The first thing designers have to do is take control of the entire channel, including stores,” advised Christine Beauchamp, a senior manager in the retail practice at The Boston Consulting Group. “Designers who only use broadcast or other measured media are missing out,” she said, reflecting the broader view.
“By taking the store [channel] back, they would have a greater chance of communicating a brand’s image. Louis Vuitton is the leader in this area,” Beauchamp said when prompted. “Two other leaders are Prada and Gucci.”
In fact, Gucci recently revealed it plans to open a major store here in the 15,000 square feet it has subleased at 840 Madison Avenue, between 69th and 70th Streets, while Versace is considering outside investment to buy back its entire retail network.
“I do expect more in-store designer promotions going forward,” forecast Kal Ruttenstein, Bloomingdale’s senior vice president of fashion direction. “When we introduce Zac Posen’s line in September, we’re devoting all the [Manhattan flagship’s] Lexington Avenue windows to Zac. We’ll be the first to do that, timed to coincide with the American collections.”
Kenneth Cole, who ranked fourth, along with Prada, on the W and Jane readers’ list of favorite designers, readily acknowledged the importance of his own stores as marketing vehicles. “It’s often difficult to communicate your brand message in a multimedia environment,” Cole said. “It’s all about the totality of the store environment. Our stores define the Kenneth Cole brand.”
Donna Karan, whose collection label was voted number one by W and Jane readers, still expressed frustration regarding the clutter that has obscured her “Woman to Woman” magazine, a lifestyle play aimed at her Collection customers, published each fall and spring since 1993. “One of my frustrations is that, given the time and energy we put into it, ‘Woman to Woman’ isn’t better known,” Karan confided. “We distribute about 100,000 copies to all of our points of sale, plus a targeted database.” This season, for instance, those targeted recipients included 40,000 holders of the American Express platinum card, and Bergdorf Goodman’s best designer customers.
Like the magazine, Karan’s ads, she said, “are trying to relate more to what the customer’s doing than what she is wearing. That’s based on an understanding of the consumer, a sense that we’re all in this together,” Karan continued. “If I can be of assistance there, that’s where I get my rocks off. It can’t just be about the clothes.”
Indeed, the clothes themselves were nowhere to be found among the qualities of a successfully marketed designer brand among most sources contacted. Typical was the perception of Sue Patneaude, vice president of designer apparel at Nordstrom Inc., who cited three key ingredients that contribute to an upmarket label’s success: the brand’s identity itself; the label’s longevity, and the personality behind it. “There is a Donna, a Calvin, a Ralph,” Patneaude noted. “There are real people behind these brands and people think about that. When you look at the list of designers who have sustained consumer interest, they have been around a long time — they have staying power.
“We also feel there are brands with extensions that have tremendous visibility, enabling them to draw from a broad base of consumers,” Patneaude continued. “Multilevel brands like Ralph Lauren spark a migration up — in Ralph’s case, from Lauren, to Black Label, to Purple Label — because she wants to elevate to increased status.”
Boston Consulting Group’s Beauchamp concurred, stating, “Ralph Lauren was a pioneer in lifestyle marketing and merchandising, sub-segmenting to grow the brand effectively. It is important for designers to extend across various prices and media to get their message out.
“Brands build their reputations over many years,” Beauchamp continued, “and consumers have long memories. Donna Karan and Giorgio Armani have portrayed timeless dressing, Donna in an urban chic way, and Armani via the classic suit. They are both makers of very wearable apparel.”
Despite recent mentions in the media of Lauren in the same breath as Pierre Cardin — a brand whose appeal died from overextension a couple of decades ago — Patneaude, among others, insisted Lauren’s name has legs. “We haven’t seen the loss of the Lauren cachet as a result of overexposure, because there is a way to migrate up within the overall label,” she offered. “At the time of Pierre Cardin, it was a different world.
“Fashion has become an aspirational business and I don’t think that is going to change.”