Fashion companies are pulling out all the stops to get shoppers’ attention — from having staffers hawk $2 tank tops outside Old Navy like they were old-time newspaper boys to lathering up passersby on the sidewalk with lemongrass-scented soap, as was the case with Lush on Manhattan’s Upper West Side store on Sunday.
And there are plenty more hands-on marketing techniques to come, whether its with multisensory branding, implementing augmentation reality online or some old-fashioned face time to brainstorm with potential customers, according to branding specialists and industry executives.
The moves are all aimed at reversing the downward trend in retailing that began over a year ago and is expected to continue through holiday. Even though consumer confidence has improved substantially since March, consumer spending figures do not reflect that upswing, according to Gallup’s chief economist Dennis Jacobe.
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“There is general optimism about the economy, but the way people behave, which we track on a nightly basis, has not improved,” Jacobe said. “Individuals’ spending levels on average are down 30 to 40 percent compared to a year ago. That is a striking decrease, particularly when you discover even the upper tier of people have been affected.”
According to a recent Gallup survey, 33 percent of consumers said their reduced spending would be permanent and 20 percent said it was temporary due to factors like fear of unemployment. Some of the leftover shock from the financial crisis can be seen in lost wealth in the stock market, housing values and money for retirement, which is likely to have a pronounced effect on consumer spending down the road, Jacobe said.
Another determinant is the psychological effect the downturn is having on people — many of whom have never experienced a recession to this degree.
“Anybody that looks at this as largely cyclical or as the same kind of thing that happened after the downturn in ’90 and ’91 is mistaken,” he said. “This is not the same thing. This is different and the so-called ‘new normal’ for spending and saving is real.”
But that doesn’t mean shoppers are only driven by price, according to Ellen Ruppel Shell, the author of “Cheap: The High Cost of Discount Culture.” In an interview Monday, she noted the current economic climate has prompted many to reconsider quality versus quantity. Given that, she doesn’t expect consumers to spend their way out of this financial mess.
Meanwhile, many stores are merely treading water in a crowded pool of bargains.
“At this point, people are in a panic,” Shell said. “It’s really hard for us to innovate. So many retailers are in such disarray and are so concerned about losing customers. You need to be able to take a deep breath and not feel as though you are losing traction every month in order to innovate.”
That may be the case for some retailers, but others are trying to stoke creativity in different ways. More than 100 fashion types are expected for cocktails Aug. 25 for some recession-surviving brainstorming at Mau Mau Studios. Co-organizer Julie Crisman, who runs her own public relations agency, said, “Many have lost their jobs, are afraid of losing their jobs or are working with teeny tiny budgets in the jobs they have. They need to be creative to trade resources to get things done for free.”
Staffers in advertising, film, fashion and other creative industries turn up for a monthly informal breakfast at Katz’s Deli on the Lower East Side to talk about everything and anything. The location is meant to be counter to more predictable power breakfast spots like Balthazar, according to founder Noah Brier, director of strategic planning for the Barbarian Group, a digital services and creative agency. In 2006, he co-founded a monthly coffee hour called “Likemind” that is now held in 50 cities around the world.
Having attended last week’s breakfast at Katz’s, Doug Jaeger, innovation director for the creative agency Taxi Inc., said, “There is a real need for social interaction as people become more about computers and less about people. What’s interesting now is that because no one is spending money they are forced to be creative. It’s an exciting time in terms of how people dress and how they look.”
Jaeger has taken to wearing the T-shirts with neckties stenciled on them that he designs. So many people have inquired about them he may start selling them, though that was never his intention.
On a professional level, Jaeger, who also serves as the Art Directors Club’s president, said improving design is one of the simplest ways to ratchet up the quality of a product without altering the materials. Digital media, naturally, is wide open for such advances, especially in relation to augmented reality, the field of computer research where computer graphic objects are blended into real footage in real time. It can include the use of motion-tracking data, fiducial markers recognition using machine vision and the construction of controlled environments containing any number of sensors.
“Online advertising hasn’t caught on in a big way,” he said. “It’s very rare that you can click on an ad and buy what is being offered. A lot of retailers collect e-mail addresses but they don’t follow up well. There are a lot of deals, sales and sample sales, but there is a whole area that is completely underleveraged.”
Amazon’s decision to buy Zappos.com could be a sign of things to come in terms of Amazon moving into an entirely different market and a fashion company teaming up with a nonapparel juggernaut, Jaeger said.
For the most part, fashion companies have tended to team within the apparel sector and that is still the case in the recession. Uniqlo, for example, will show off Jil Sander’s +J Collection in the U.S. and the U.K. on Oct. 1.
One exception is Johnny Cupcakes’ founder John Earle, who was named America’s top young entrepreneur by BusinessWeek last year. In the next few months, he will partner with bakeries to sell customized T-shirts for one day only. He is also looking into getting a food delivery truck he will use more like an ice cream man would. When out of town, he has been known to Twitter fans to hold what he called “random meet-ups.” More than 300 showed up for free pizza at a local San Francisco joint a few months ago. Monthly movie nights are held in Boston, trading cards and pieces of candy are enclosed in online orders, and in-store games for prizes are part of the mix.
“The main thing customers like about my brand is it’s personal,” Earle said. “They like the fact that the owner of the company is hanging out with them eating pizza or playing kickball in the street.”
For the first time, Opening Ceremony has a year of partnerships planned rather than occasional ones. Chloë Sevigny, Pendleton and Delfina Delettrez are a few of the collaborators.
Opening Ceremony co-owner Humberto Leon said, “We always say, ‘If we can’t excite ourselves, we’re not succeeding.’ As buyers, we’re exposed to a lot. We see every runway show. If you can still get excited after seeing all that, then you know you are onto something.”
Creative consultant and industrial designer Jens Martin Skibsted knows the power of collaboration, having partnered with Marc Newson, Ross Lovegrove and Karim Rashid for various projects. The way he sees it, fashion companies could learn a few things from the architectural world. His book, “Instant Icons,” explores how big-name architecture has helped define certain cities since before the Roman Empire. Apparel-makers could use a similar model to rev up business, he said.
“That way of thinking doesn’t really exist in the same way in product development. When companies make a product they are most concerned about how many they sell, which of course sounds obvious,” Skibsted said. “When Frank Gehry built the Guggenheim in Bilbao, Bilbao didn’t care about the return on investment as a building. They cared about the return on investment as a city.”
Aware that “there is this constant race to find new ways of differentiating your brand,” Skibsted said multisensory branding is another opportunity and an affordable one at that.
“This remains a pretty abstract thing to most people,” he said. “It’s very easy to deal with. If you have a store that sells leather goods, make it smell like leather. In marketing terms, it’s very subliminal in the U.S.” It’s similar to the move Starbucks made earlier this year when it had baristas return to grinding the coffee beans in the store rather than using preground coffee. The goal was to get back to the aroma of freshly ground and brewed coffee wafting through to create a sensory experience.
New Balance did not work with Skibsted, but it has infused the first floor of its new and first experiential store in Beijing with a leather scent. The company also created a carnival Saturday on the street outside the store to give Chinese shoppers a taste of Americana.
Some brands are offering a more playful atmosphere in the U.S., too. Knowing many parents will still indulge their children even though they have shut off their own personal spending, J. Crew opened its first Crewcuts flagship on Madison Avenue. In step with other companies that are dressing up their new outposts with a little eye candy or unexpected fun, J. Crew set up a signature ice cream stand out front to try to woo shoppers.
Other companies are thinking small in terms of pop-up stores, a growing trend worldwide as brands look to spur consumer excitement and landlords seek to fill empty storefronts — even on a temporary basis. Gucci will unveil a series of pop up shops called Gucci Icon-Temporary at Art Basel Miami Beach, Crosby Street in SoHo, London, Berlin, Paris, Hong Kong and Tokyo. Stella McCartney will show off her first pop-up shop Aug. 22 to 24 at the Fireplace Project, a garage-turned-gallery in East Hampton, N.Y.
For last week’s opening of the UNIS annex at Smith + Butler in Carroll Gardens, N.Y., designer Eunice Lee rounded up her musician friends Marisa Competello and Sarah Bell to perform. Montreal-based outerwear label Mackage will open its first freestanding store, a 500-square-foot space in Paris on Oct. 1 and a New York pop-up shop will debut Sept. 1.
Creativity, innovation and generating consumer excitement aside, the main thing brands need to remember in these tough times is to stay true to their heritage. As Earle of Johnny Cupcakes said, “We do little to no advertising. There are no investors. I’ve had plenty of chances to sell out and make tons of money. Everyone thought I was crazy not to and maybe I was. But it made my customers happy that I didn’t.”