Old Navy doesn’t want inflation to dampen parents’ back-to-school shopping.
At the end of July, the retailer announced that it would put a “price lock” on its denim products until the end of September, following a previously announced temporary moratorium on price increases of children’s essentials.
Normally, most retailers try hard not to discuss pricing strategy with their customers, unless it’s to announce the latest sale. But with inflation hitting highs not seen in decades and growing rumors of a global recession, these are not normal times.
Despite all the bad economic headlines, consumer spending remains strong in the US and some other major markets. But retailers fear their customers will soon start watching their wallets, especially when it comes to non-essential fashion and beauty purchases. Talking loudly about how great value a pair of jeans or sneakers is is one way to defer that judgment.
“The value and worth of a brand is always in the perception of the customer,” said Jasmine Motola of branding agency Métier Creative. “In a recession…it’s really about tracking how customers reassess their priorities and then structuring the product or brand in a way that really meets their needs.”
Old Navy’s promise not to raise prices is a version of the tried-and-tested sales strategy of promising good quality at a lower cost. For luxury brands selling pricey sneakers and handbags, convincing consumers that their items would retain their value — or even appreciate — in the resale market is another tactic.
For mid-tier brands, the proposition to consumers in tough times is to convince them that it’s worth spending a few extra bucks on an item that will be a closet staple for years to come.
“Times like this are the perfect times to double down on our message as our products become more desirable,” said Karla Gallardo, co-founder and chief executive of Cuyana, which sells leather goods and wardrobe basics. . “When [a customer] can’t buy everything she wants, she has to think about how to allocate her money. It’s better to feel like you’ve invested in a piece.
Year-to-date, email marketing communications from US and UK retailers containing descriptors such as “core” increased by 79%, “timeless” by 24%, “bullion coins” by 8% and “staple” by 7%, according to retail intelligence platform Edited.
“From a retailer’s perspective, these styles maintain a consistent price and rarely go on sale or out of stock,” said Kayla Marci, market analyst at Edited. “In a time of economic crisis, consumers often adopt a ‘buy less, buy better’ mentality.
To make their case effectively, labels need to do more than introduce new buzzwords into their ads. They will need to reinforce their brand narrative, ensure they are marketing truly timeless pieces rather than chasing trends, and be honest in their marketing.
Change your positioning
For mid-range brands, promoting their timelessness is sometimes the only option. In two emails in May, Cos told subscribers its products were “easy wardrobe essentials” and “smart investments” that could transition from spring to summer. In June, Sézane emailed subscribers the “legendary status” of his shorts Deia and Rome, saying “There’s a reason we bring these two back every year.” Meanwhile, in July, Banana Republic touted its “timeless” shirt styles alongside the tagline “a legacy of style.”
“As long as fast-fashion brands are delivering what they’re delivering, you can’t compete on price,” said Ana Andjelic, consultant and former chief marketing officer for Banana Republic and Mansur Gavriel. “You have to compete on messaging and quality.”
That means focusing on the benefits of buying a product, rather than trying to convince consumers that their items are worthy of the “investment” label, said Michelle Varkonyi of branding agency Métier Creative.
“It’s more internally that it’s a longer term investment, but the way it looks [in marketing] is more emotional,” she said.
Motola, for example, said that in the agency’s work with luxury haircare brand Oribe, they focused more on what the product will do for a user’s hair, rather than just looking at it. on the luxury element of the brand.
“They’re obviously an expensive hair product, but instead of just positioning them as an expensive product, it shows what an investment it is in your long-term hair health,” she said.
In the event of a downturn, it will become even more important for brands to prioritize retaining existing customers, in addition to wooing new ones.
To do this, Andjelic suggests brands resist the instinct to pull out of marketing. Instead, she said, brands should work harder to build brand awareness, rather than investing in performance marketing. This means investing in community efforts, such as loyalty programs, that encourage repeat purchases or placing higher value orders.
“Stay in the lives of customers,” she said. “They’re the ones who are going to be your biggest advocates, especially in a recession when they have to make choices.”
The storytelling around the brand can also have an impact. Creating a stronger narrative helps increase the consumer’s perception of brand value, selling more than just a top or a bag, but a philosophy around, say, sustainable fashion (think Reformation ) or Parisian-inspired style (like the French brand Sézane). This can help the brand gain value in the resale market. And brands with higher resale value have an easier time convincing consumers that they can be treated as a real “investment.”
“While brands like Chanel and Gucci will always be smart investments, we find that early adoption of emerging brands with a unique point of view proves particularly fruitful,” said Kelly McSweeney, head of merchandising at The RealReal, pointing to labels like Marine. Serre, Khaite and Peter Do, who saw their resale value on the platform increase year over year by 86%, 46% and 53%, respectively.
When all else fails, brands simply need to be honest with consumers. This can include being transparent about processes and decisions that typically happen behind the scenes, such as price increases or supply chain challenges.
“Honesty as a brand is really key to how we communicate with customers,” said Gallardo de Cuyana.
. “We warned our customers when we increased our prices. Our intention is to provide this excellent value proposition to [our customer]so we want to tell him what we are doing to continue to achieve this.