Understanding, responding to and leading change is central to any business in today’s technology-driven world. “All of us have heard ‘evolve or die.’ Just when you think you’ve mastered the latest gadget or new technology, something new comes out in the marketplace — and you have to reteach and relearn,” said Karen Murray, president of VF Corp.’s sportswear coalition, during a presentation titled “Branding: Then and Now.”
Nautica, the key brand in Murray’s portfolio, has evolved its marketing and design initiatives in response to the fast-changing retail environment and technological innovations. As e-commerce and social media grow more important, the previous emphasis on product, promotion and price has shifted to a focus on commerce, content, connection, community and conversation, said Murray.
“It used to be that if you had a good advertising campaign in glossy magazines, you were OK. Now you have to have a story to tell, and brand storytelling really moves to the forefront,” said Murray. “You really have to have creative assets — the campaign images, you have to be great on your dot-com site, you have to have content within QR codes and videos for the Web. You have to connect with your consumer in a completely different way.”
The tools for doing so are fast-moving targets, with newer sites like Pinterest and Tumblr joining Facebook, YouTube and Twitter as important marketing platforms. “The dialogue is both ways and the consumer is writing part of your brand story. Brands are not in control, the consumer is king,” observed Murray.
As part of VF Corp., Nautica — a $1.5 billion brand carried in more than 75 countries and 3,000 points of sale — benefits from its parent company’s innovation platform. VF has fostered partnerships with MIT’s Media Lab and sponsors symposiums on branding and brand storytelling, including one with IDEO that particularly resonated with Murray.
Nautica ended up tapping the design and branding firm to help reposition its own brand. “We went to IDEO and said we wanted a stronger emotional connection. They helped us develop a true intimate understanding and passion for our target consumer,” said Murray. “They helped us create a singular voice and get this across on all consumer touch points. So today we have guidelines and guardrails that we live by and it has changed the culture of the company both internally and externally.”
Through the process with IDEO, Nautica developed a brand pyramid that helps shape all aspects of the company’s merchandising and marketing strategies. The pyramid rests on internal brand foundations of purpose and values. Consumer-facing issues include points of parity with competing brands and points of difference — which encompass functional and physical benefits of the brand’s products — as well as emotional benefits and reasons to believe in those factors. At the top of the pyramid is the brand’s personality and promise to its customers.
“It is the secret sauce that makes Nautica what it is. If you don’t have a brand pyramid I recommend them for all the brands in the room,” advised Murray.
When Murray joined Nautica in 2007 she set about transforming the brand’s advertising imagery, which at that time mostly focused on a solitary “guy on a boat.” Murray considered the campaign “a lonely story” that failed to resonate with most guys who “don’t actually go on a boat, let alone pose on a boat like that,” she explained.
The campaign was repositioned to emphasize lifestyle images of men socializing with friends, family and the opposite sex. The marketing was brought in-house in the process and out of the hands of an ad agency. “Who has passion for the brand better than our own team?” reasoned Murray.
As part of its marketing efforts, Nautica has been a longtime partner with Oceana in its cause to preserve and protect the world’s oceans. Last month, Nautica announced another partnership with Charity:Water, a nonprofit organization that brings clean, safe drinking water to developing communities. As part of its “Give change to make change” campaign, Nautica is asking customers to round up their purchases to the next dollar at its outlet stores and on nautica.com, with the proceeds going to the group.
Developing a “soul” for the brand is crucial to connecting with consumers in a meaningful way, said Murray of these initiatives. “You have to stand for more than product,” she explained. “By soul, I mean a great cause-marketing initiative or doing something good because your consumer cares.”
Murray recalled starting her career more than 30 years ago in sales at Gant, before moving on to Bugle Boy and Liz Claiborne and then landing at Nautica. It was a simpler time in retail, with most companies satisfied with building their domestic department store businesses.
“That was when department stores truly ruled the day. It was a wholesale-driven environment,” remembered Murray. “It was all about how many stores could we sell, how many malls could we get in, what our market share was going to be.”
The calculus for success was easier in those single-channel days. “I would sell Bloomingdale’s 1,000 rugby shirts, 750 sold, there were 250 left. That markdown was 10 percent at retail, and 250 units times at 10 percent was $2,500. We would split that markdown, $1,250 each, and that was it. End of day,” said Murray. “No gross margin equations.”
Of course everything has changed since then and such straightforward math is quaint in today’s world of complex chargebacks and markdown cadences. Over the recent decades, heightened competition has littered the retail landscape with shuttered nameplates.
“We all know there were too many stores and too many malls,” said Murray of the consolidation.
Understanding the macro issues beyond the narrow purview of the apparel industry is paramount in today’s economy. In a world where electronics firms have secured patents for footwear and apparel and Apple sells $9 billion in iPads in the most recent holiday season, competition for consumer dollars isn’t just with other fashion firms, said Murray.
Murray pointed to a quote by Rishad Tobaccowala, chief strategy and innovation officer at Publicis Groupe’s VivaKi, who has noted, “competitors come from anywhere. The iPhone not only devastated Nokia but also impacted Nintendo handheld games, Garmin, Nikon and even Apple’s own iPod.”
“Technology has swept every single industry but our own,” said Murray — but that isn’t likely to remain true. Advances in fabrics, like those that can regulate temperature or even monitor a wearer’s blood pressure, have the potential to dramatically alter the apparel landscape.