As the marketplace gets more competitive, retailers/brands are looking to not only sustain their share, but also add on new customer segments for higher footfalls. This effort has encouraged many of them to reposition with new logos, product categories, marketing tie-ups, image affiliations to attract new customers. However, not every effort has been successful and while some have hit it big with a new image, others have slipped, losing even their loyal customers. Yet 2012 will see many big and small retailers take the plunge…
Over the last few years, retailers building strategies to ride over slow market conditions have relied on many new initiatives – luxury brands with affordable lines, affordable brand retailers with high-fashion garments, changing their image by going green, adding accessory lines are a few of them. Such steps help the retailers/brands to sell to their existing consumer base with a surprise element, and also get a new consumer base as well. Starting off as a staid store selling raincoats in the late nineties, Burberry has successfully repositioned itself, as one of the best selling designer labels over the years.
In a major rebranding and repositioning effort two years ago with a well-defined merchandising strategy, for which JCPenney earned tremendous media attention; the retail giant introduced a new logo, changed its products, placements, pricing, promotions and was able to successfully maintain old consumer base, as well as attract a bigger base looking for a unique shopping experience. The department store is now looking at phase two of the strategy and in February this year, not only has JCPenney unveiled their new identity with the new logo meant to evoke the American Flag, they also plan on doing a complete overhaul of their product line and marketing strategy. Last year the company was experiencing sluggish sales and store closings, but this year they are seeing rising stock share prices and an upbeat outlook for 2012.
However, not all ‘changes’ have gone down well with the consumers. GAP and Tommy Hilfiger, the two all American brands, suffered when they attempted to change their image in the past…
Established in 1969 and one of the most popular apparel brand of America, GAP has tried many times to get a new look, but to no avail. The last effort was in 2010 with the debut of their new logo wherein GAP announced that they are moving from the classic American design look to a more modern, sexy and cool image. This complete changeover was rejected by loyal customers, forcing the company to return to their original logo and core product offerings – khaki trousers and Gap Basic T-Shirts.
Another such example is that of Tommy Hilfiger, which has seen growth, based purely on the appeal of its logo. Whenever the brand removed or toned down its logo, people stopped relating to the brand. Tommy Hilfiger also moved into a lot of new product categories which weren’t suited with the brand image and had to face huge losses, Tommy Hilfiger’s attempt to compete with successful European high-fashion brands such as Gucci and Prada was also a mistake, which even Hilfiger himself acknowledged.
Yet repositioning is a strategy that attracts attention, and if planned and executed properly, it gets focused in a market that is overcrowded. In a recent case Liz Claiborne, suffering setbacks in the year 2011, with a fourth quarter loss of 9%, has changed its name to Fifth & Pacific, in order to cater to the luxury shopper by distancing itself from its department store feel and adopting the cachet of its more boutique-like brands. The logic is simple, luxury market is least affected by market conditions.
Macy’s too is planning to revamp their strategy in the coming three years, in order to enhance the shopping experience for a new targeted group primarily serving customers between the ages 19 and 30. With fast fashion chains like Zara, Uniqlo, and H&M, offering affordable, trendy clothing and turning over their assortments more quickly than traditional retailers in United States, Macy’s decision to reposition itself as per the new consumer base seems like a good strategy to grow. After juniors and women’s retailer, ‘The Wet Seal’ reported poor sales due to brand crisis and customers confusion about what the brand stands for, the company has decided to reposition itself in the market and create a stronger identity to attract consumers. Reebok, the sportswear and accessories brand, recently revamped itself in the market, with a tie up with CrossFit Gyms brandishing the Reebok name. Stores are sprouting up everywhere, and the brand is launching new lines of CrossFit-branded shoes and apparel.