Byline: Janet Ozzard / Miles Socha

NEW YORK — It’s hip to be cheap.
That’s the unmistakable message as value retailers step up their advertising presence with witty campaigns that are changing the image of what has been considered a “dumb” channel of distribution.
The most recent entry is H&M, the Swedish purveyor of trendy, disposable chic that just opened its first three U.S. locations with the backing of a campaign featuring actress Chloe Sevigny. Before that, the humorous high-concept ads for Old Navy and Target paved the way for sophisticated advertising that focused more on style than low, low prices.
Executives at Old Navy and Target declined to speak about their ads, claiming that to do so could reveal strategies to their competitors. Old Navy, a division of Gap Inc., creates its campaigns internally and splashes its budget liberally across just about every media channel.
It’s quite a hefty spend. In 1999, according to Competitive Media Reporting, the Old Navy chain spent $105.5 million on media buys for its apparel, about 60 percent of it for network TV. Target spent $28.2 million on apparel; Wal-Mart, $25.7 million; Kmart, $53.8 million, and Kohl’s, $28.1 million.
Dave Peterson, owner of Peterson Millahooks, a small agency in Minneapolis that has done ads for Target, including the current Pop Art-influenced print ads and the “bull’s-eye” TV campaign, said the retailer is “a great client,” in large part because the stylish product is easy to work with and the company is open to strong concepts.
“The ads are all about how fun and cool it is to shop at Target,” said Peterson. “They’ve got Philippe Starck, Michael Graves. They are delivering on a stylish product.”
Some, but not all, value retailers are pushing the idea that, while price is important, it’s not the only reason consumers shop in their stores. Style is just as important to a growing number of consumers, and status shopping takes place in every retail channel.
“Nobody is ashamed to shop at H&M,” said Christian Bagnoud, director of marketing for H&M here. “I think it’s good to treat something cheap like it’s luxury.”
When the retailer opened last month, it had already prepped the New York market by putting its striking, simple ads on dozens of buses, bus shelters, taxi tops and phone kiosks. The look was upscale, but the prices — $9 for a peasant blouse — were distinctly mass.
Bagnoud wouldn’t give a sum for the launch, but he did say it wasn’t any larger than what H&M would normally spend in a new city. The company has a history of using major faces for its campaigns. Bagnoud said he first became aware of H&M 11 years ago when he saw Cindy Crawford doing ads for the store’s lingerie. The first movie star model was Gary Oldman, and that helped pave the way for others, including Johnny Depp and Salma Hayek.
These ads weren’t done just to impress the U.S. market; it’s the company’s global campaign, Bagnoud pointed out. “That’s not to say that we’re not aware that New York is a very different market,” he said. “But for right now, we’ll stick with what we do globally.”
While things might be looking better, advertising executives stress there’s still plenty of room for improvement, especially for Wal-Mart, Kmart and Kohl’s, based in Wisconsin, which is opening 18 stores in the metro New York area this spring and blitzing consumers with TV spots and flyers.
“To me, the Kohl’s ads are very lackluster,” said Jill Glover, president and owner of Jill Glover Creative Services. She said the ads portray Kohl’s as a sophisticated and unusual value store, “but I don’t think they’re necessarily appealing to a hip market.”
Most advertising executives give Old Navy credit for bringing quirky creativity to campaigns that had largely been product-and-price focused. Target was also unanimously praised for ads that manage to glamorize laundry soap, auto parts and basic fashions.
“Target has definitely set a new level for whimsy, visuals and word play,” said Irma Zandl, president of the New York trend and consulting firm The Zandl Group. “It just pops off the page. Wal-Mart and Kmart aren’t even in the ballpark.”
Zandl, who has been vocal about the rise of populism as an important cultural trend, acknowledged that not every discounter needs to be hip. “But this whole idea of more everyday people having an appreciation for design is something that’s definitely growing,” she said. “If I were Wal-Mart, I would want to be sure I’m on track with that trend.”
Discount advertising needn’t be “edgy,” she said, but “intriguing people with something fresh and special for their day” is a winning strategy. “They’re going to have to work hard to have communications that say something distinctive about them.”
Doug Lloyd, owner of Lloyd & Co., said it’s a tactic that works because it builds buzz among a hip crowd, which then trickles downward. But he questioned whether the store environment and merchandise lived up to the image presented in some ads. Old Navy has a seamless flow of quirkiness from ads to flyers to window displays to the shopping experience, whereas “Target is a bit of a disconnect. Target [stores] feel like a Wal-Mart. It would be a tall order to get those stores on the same level as those ads.”
Neil Kraft, a partner at Frierson, Mee & Kraft, disagreed. “I don’t think either [Target or Old Navy] falls down when you actually go in there,” he said.
Madonna Badger, owner of Badger Worldwide Advertising, said both Old Navy and Target created a “true brand experience” with their campaigns and store environments, despite products and prices that are similar to other discount players. But she stressed, “It’s not for everyone, and that’s what’s cool about it.”