Fashion Notebook

Research Desk: Girls Will Give Up Coffee Before Concealer

The current economic situation may look ugly, but that doesn’t mean women want to. Which, at least, is some good news for marketers and health and beauty retailers.

According to the Allure Beauty Index, an online survey of 1,088 readers of Allure magazine conducted on its Web site in April, 75% of respondents said they would give up other indulgences before they would stop buying their favorite beauty products.

What’s more, 84% of those surveyed said they felt beauty “is a necessity in life.” We know, we know, it is a little bit cringe-inducing, y'know, given what's happening in Myanmar right now, and I don't know, immigrant refugees being burned alive in South Africa. But this is the U.S. peeps, where it's OK to put beauty, and fashion, first. After all, many of our basic needs are met, or at least so the popular media tells us. Plus, there's that big news event of that big big big movie coming out now, guys! It's so big even the international press is getting Carried away. (We promise, no more SATC references. God knows we've had enough of them!)

Sorry, we're getting off track today. More to the point for marketers, 65% agreed with the statement that “you can't put a budget on beauty,” which means charge whatever the f*ck you want for those not-tested-on-animals powders, creams and compounds.         

When asked where they would look to cut back their spending, those surveyed ranked the affected categories as follows:

    •    Dining out: 69%                         •    Home goods 44%            
    •    Jewelry/watches: 59%               •    Clothing: 37%
    •    Electronics: 58%                        •    Automobile: 30%
    •    Entertainment: 51%                        •    Beauty products: 16%
    •    Vacation: 45%

   

Not that Starbucks hasn’t recently been hit with enough ugly financial news, 79% of respondents said they would “eliminate afternoon Starbucks’ runs” in order to be able to afford their favorite beauty products. In addition, 56% said they would alter their vacation plans to free up funds for their beauty needs.               

The survey did have good news for some food retailers: 61% said they would save money by switching to
lower-priced “generic” food brands at the grocery store. That means, like, buying 365 Organic at Whole Foods, right?

Financial Desk: Sales Down, But Earnings Up 40% for Gap, as Retailer Cuts Marketing Budget

We hate to see this, because it means less creative, but cutting its marketing expenses was one tactic that helped Gap bolster its bottom line, even as sales continued their slide into the red.

In addition to other cost cutting measures that included reduced remodeling efforts for Old Navy stores, and a $15 million pre-tax earnings benefit, Sabrina Simmons, Gap Inc.’s EVP/CFO, said in an earnings call late Thursday that “lower marketing expenses” also helped lift earnings 40% to $249 million, for the quarter ended May 3.

So where was the blood spilled in the marketing department?

Well, ad spend dropped almost 18% from the year-earlier period, closing at $93 million for the quarter. The $21 million reduction was due in large part to the absence of TV spots for the Gap brand, Simmons said. However, she added that shareholders and analysts shouldn’t expect such cuts to continue.

“Unlike this first quarter, we expect our marketing expenses in the second quarter to be fairly similar to last year’s level of $88 million,” she said.

Yay! Maybe we'll have some more fun creative to look forward to this summer, when we're all staying indoors and running the air conditioners to escape from global warming. That is, though of us who have TV. (We're luddites, y'all, except when we visit our wife to watch rounds and rounds of Lifetime Movies.)

While earnings might have been a bright spot, and showed the beleaguered firm capable of trimming costs for the benefit of its investors, sales trends showed signs of trouble amid an economic slowdown that has the whole retail industry reeling. Comp store sales at Gap North America dropped 7% for the quarter to $976 million, and Old Navy posted an 18% decrease, dropping to $1.2 billion in sales.

If you don't have your financial party hat on, folks, that means, pretty much, "things sucked  over the past three months." Which is too bad for Old Navy, because we, (and the wife), LOVE those new ads. It's like Gossip Girl meets Fred Flare's Crafternoon Delights. Seriously, some fierce-ass dresses that might have the retailer beating Forever 21 at its own game. Seriously, if you haven't seen these ads (also screen-grabbed, above, right), they just might change the way you view Old Navy. They did for us.

Meanwhile, on the richer side of things, Banana Republic's comp store sales dropped 4% to $538 million and Glenn Murphy, chairman and CEO,  said that the brand had been affected by challenging traffic trends, and an “uncharacteristically promotional” environment at the apparel chain’s direct competitors. Thus far, Banana Republic has avoided playing the promotional card to drive sales.

“We’re watching the competitive landscape very closely,” added Murphy. “And [we] are prepared to make the necessary adjustments to drive traffic if this promotional level that we are seeing currently was to continue.”

Yay SALES that are sure to come. Because, honey, that's a brand for the aspirational rich, not the real rich, and we ain't getting any more money any time soon. That is, until Obama is in the White House, but we don't want to get political. We just want good health care, education, and leadership that will get us out of this war, y'know, in less than 100 years. But we digress.

Net sales for the company dropped about 5% to $3.38 billion for the first quarter. The company has maintained its guidance for fiscal 2008 earnings per share to fall in the range of $1.20 to $1.27.

Lessons in Branding: Levi's 2.0

If you haven't already, check out this story about Levi's "Jumpin' In" online viral campaign.

Now, I'm sure a lot of your out there at the apparel companies are salivating over the whole online thing, but you're probably pretty uncertain how to go about doing it. After all, you're already beset with fickle consumers whose whims seem to change with the season and who are constantly pounding on the  castle door with cries of "More! More! More!" so why move into the web where EVERYONE is fickle and decisions are made in less than a nanosecond?

Well, consider this example.

That "Jumpin' In" campaign—which features online videos of teens, well, jumping into their jeans through a mélange of backflips, roof dives, etc., and launched May 5 to build buzz for the "Live Unbuttoned" global campaign for the brand's flagship 501 collection—snatched some 3.5 million hits in 10 days. And if that doesn't factor into your media membranes, here's some more traditional fodder: The spots got play on "Good Morning America" and coverage from the Grey Lady's new style challenger Wall Street Journal.

Here's our comic-strip style flip book of a scene from one of the viral videos, which by the way, we think are totally stunning in an "I can't believe he freakin' did that" kind of way.

"[Jumpin' In] was supposed to be a small seeding activity," Robert Cameron, vp-marketing at Levi Strauss, San Francisco, told journo Gregory Solman at our sister-pub Adweek. "We didn't know it was going to blow up. So we're meeting with BBH on how to chase this. What do we do to adjust the strategy and ride the wave?"

Listen, you've heard this from us and our friends a million times already. The online space, and viral videos in particular, don't necessarily guarantee the kind of success that you can see here with Levi's version. But they do allow you to experiment, without the expense of a real test market, with some creative that just might pique consumer interest in a similar way. And you know who can explain this better than we can? Kevin Kells, the CPG sales head over at Google. Kells might be more in the niche of beauty and, well, packaged goods marketing, but what he has to say about the online thought process for ad creatives is, in our humble estimation, universally applicable.

Here's an exerpt from our convo with him a while back:

          Brandweek: What do you tell CPG marketers who still rely on traditional print and TV buys?                  Kevin Kells: I tell them that online advertising is more efficient, but that they have to look at               sponsored links as doorways that take your consumer where they want to go, where you can add
          value to their life. The problem is that traditional media is ingrained for many of those CMOs and
          marketers. They have 30 years of data on TV and magazines. So even though it's easier to get ROI
          figures from online ads, you’re up against 30 years of market data.

 
BW: Would you revolutionize those departments to have them doing it all online?
KK: No. It’s not to say that they should stop doing that stuff, but there’s a way to go a little deeper online around consumer insights. Instead of focusing on a small amount of creative, they should be making more. They should be making 1,000 digital assets a year as opposed to three television assets.
 
BW: Does what you’re suggesting require multiple times the amount of creative?
KK: Yes. That’s an obstacle and that’s paralyzing to them. Conceptually now we’re beginning to get them to know that they need to be online with different stories and they have the infrastructure. But in order to put all of those assets in the right place, someone does have to make them. That can be solved by more efficiency. There’s a clunky system right now between the client and their multiple agencies. That’s why you see the emergence of agency networks like WPP.

OK, class dismissed for now. Next time, we'll take a look at those other web items that are probably giving you both a surge of excitement and perhaps some sweaty palms: widgets, the online applications that you've no doubt seen on your kids (or hey, maybe even your own) Facebook and MySpace profiles, or, if you're chic tech nerds like us, those wonderful things that pop up when you hit F12 on your Apple computer.

Lessons in Branding: How Diesel Fuel For Life Rocketed the Brand to the Top of the Fragrance Market, With Just One Launch

So no doubt you've all seen the ads for Diesel's first foray into
the fragrance category, Fuel For Life, right? (If not, check out these trés sexy photos, at right and below, left). Well, what you probably didn't know is that this one fragrance has shot the Diesel name up to the top of the men's cologne business.

According to figures from NPD Group, the fragrance was the No. 3 overall launch (across men's and women's fragrances) for 2007, despite the fact that Diesel had no history in the category. What's more, through February 2008, the fragrance is solidly within the Top 10 Men's Colognes, ranked by sales.

So how'd they do it? With an ad campaign that didn't only win over consumers, but also won awards, picking up the Fragrance Advertising of the Year via the Fragrance Foundation, in both the men's and women's category. So when we're drooling over the eye candy in both of these shots, it's for a reason. This stuff really IS solid gold.

Wanna hear more? Well, you can ready all about it in our article "Filling It Up With Premium." If you're link-a-phobic, here's a taste:

It's no secret that most every fashion brand wants to break into the fragrance business. And with good reason. While the market is fickle, materials can be found on the cheap, the bottles have a long shelf life and their contents are less prone to the more dramatic trend overhauls that characterize luxury apparel. Because customers will actually pay up to $80 for a little bottle of the stuff, the profit margins smell loveliest of all. But Diesel knew it was facing an uphill battle as an unknown in the space, which was presumably behind its decision to partner with L'Oréal, Paris, for its first foray into the category.

It's also why the introductory support broke many of the traditional rules L'Oréal applies to marketing and launching its ever-expanding portfolio of fragrances. First there was the aforementioned antimarketing viral campaign in the weeks leading up to the August 2007 launch. (Some subsequent print ads announced that the fragrance was "finally legalised.")

Next, when it came to traditional brand advertising (chiefly print and TV), the campaign took a more-is-more approach. Rather than one TV spot, the company created six, via agency FFL Paris. Instead of two, static print ads, one for men and one for women, that feature either a celebrity or single model, FFL created four executions, each of them utilizing a new model to express the individuality of the fragrance. The tag read simply: "Are You Alive?"

"For us, this was an ambitious project," said Ulli Lindauer, vp-marketing of L'Oréal European designer fragrances. "There is a moment captured in the photography that is a universal moment of feeling alive. It was about the brand giving each of us the opportunity to be an individual."

Lessons in Branding: How Steve & Barry's Does a Lot With a Little

OK, so if you haven't read our news story (you know, that OTHER
job we have), about Steve & Barry's launching a new collection of
branded "Sex and the City" t-shirts and tank tops ahead of the year's least-anticipated and most-loathed premier (to us), check it out here. If you're link-a-phobic, here's the brief:

"Further cashing in on the stars of HBO's hit show Sex and the City, Steve and Barry's has launched a collection of branded T-shirts and tank tops designed by leading actress Sarah Jessica Parker.

The collection, with all items priced under $9, hit cheap n' chic retail stores last week, ahead of the May 30 premiere of Sex and the City: The Movie at theaters nationwide. The T-shirts and tank tops come with printed phrases including "I'm with Mr. Big" and "I (Heart) Sex and the City," as well as images of the characters from the TV series."

"Millions of women have flocked to our stores since the launch of Sarah Jessica Parker's Bitten brand last year, and Sex and the City: The Movie merchandise is a perfect complement to that collection," said Howard Schacter, chief partnership officer at Steve & Barry's, New York.

OK, so why does this matter, and why, as we contend in the headline to this post, do we see it as a brilliant example of doing "a lot with a little." Well, pretty much, it's because Steve & Barry's is likely to get a groundswell from this, selling not only these t-shirts, but also more items from the "Bitten" collection that the retailer trotted out from Sarah Jessica Parker (she of the Skeletor visage, pictured left, in that show that proffers female empowerment but really ends up, sing it with us Obama, "more of the same," in our humble opinion, and that of others) last year. And better yet, they'll do it—again—with barely a cent spent on advertising.

This isn't a groundbreaking marketing idea—big film coming up, you've already got a product tie-in to one of the characters, so plug her again and ride the film's publicity and boon in related Internet searches to see the sales needle get a lift—so why aren't more people doing it?

Well, the answer to that might be that they're just too damn rich. And that's not a slight.

Think about it. When we're flush, it's all dinners at BLT Prime and brunch at Essex, but when we're broke, it's poulet roti chez nous with rosemary and other fresh herbs, that serves two and, we dare say, tastes just as good as the same dish at either of those tony joints. Leftovers are broken down into chicken salad, the bones boiled into a chicken soup. And presto! We've got lunch for days. And for about half the cost of a porterhouse at BLT. Sure, we definitely got way more out of cooking the chicken at home and getting creative with stretching the meals, but that's because we had to. And once our coffers are full again, you'd better believe we'll redefine dinner—like retailers and apparel companies define a "launch"—as a strictly Tourondel affair. N'est ce-pas?

So what if the big agencies and brands just starved their budgets on a few projects and saw where it went? Listen, we're not saying that Nike should book Sharapova for a tennis commercial and then forego a TV spot, but maybe test out an anemic cash flow on a smaller project and see what the creatives come up with. You never know where the results might lead. Maybe even straight to sales.

Stay tuned to see how well the "Sex and the City" tops do. You know we are.