Why do some brands disappear while others maintain their customer acceptance? Once high flyers, Benetton, Levi, Aeropostale, and Abercrombie & Fitch have all given way to newcomers such as H&M, Zara, and Urban Outfitters.
One reason this happens is because iconic brands remain true to their original concept and positioning while consumer tastes change. Every 10 years or so a new generation of shoppers emerge on the scene. With the wide array of choices available today, consumers quickly become tired of trendy fashions and fad products; they can easily shift their attention to new brands both on and off-line, and they do.
Gap is an example of brand that is out of sync with the times. As I have written about previously, the millennials have a lifestyle that is quick and non-possessive. The Gap’s merchandise is dull, and pricing has often been an issue. More interesting merchandise and lower prices is a big reason why Old Navy is doing better than Gap, in my opinion. The recent announcement that about a quarter of Gap’s U.S. stores will close reflects their outdated approach. But all is not lost. If Gap can make a few moves to be more relevant and competitive they can stop the decline. For example, I think the Gap possesses a great ability to talk to consumers of all ages. Segmenting their merchandise assortments to embrace the different stages of life is something they could do that others could not. They could also tell merchandise stories to various consumer segments through better displays. The Gap is stuck in its iconic past and will keep shrinking if it doesn’t change now.
I believe there is an even deeper-seeded reason for customers changing from one brand to another. That reason is lack of service. As I wander around stores, I often find that no one greets me or asks me “can I help you.” That age old question that has the invariable answer “no thank you, I am just looking.” A smarter approach is to say, “this shirt looks great on you,” or “have you seen our latest handbags that match this blouse.” Simple, engaging phrases help start a conversation and possibly end in a sale. Selling is an art that few of today’s retailers understand.
Good service is still important even in the Internet age. Recently Steve Sadove, former CEO of Saks 5th Ave and former Chairman of the National Retail Federation discussed the findings of a mystery survey that was made at the peak holiday period of 2014. FitForCommerce who shopped 300 websites and mobile sites and stores conducted the survey. Companies were scored against 200 best practices. Their omnichannel index includes many leading apparel companies, accessory companies, beauty companies, footwear companies, home companies, and the department store companies. Some of the criteria included social media integration, contextual help including live chat, mobile optimized site, saved cart between mobile and web, buy on-line and return in-store, etc.
The results were startling. Bloomingdale’s was the winner for best website performance with a score of 73 out of 100. The index average was 51 out of 100, showing how poor some other retailers were. What is even more interesting is that Bloomingdale’s was selected as the winner for total among channel performance with a score of 70 versus and industry average of 47.
The best mobile site performance was by the Container Store with a high score of 88 out of 100 with the average index at just 50 out of 100. I know how attentive The Container Store staff is, so this best in class performance is no surprise to me.
Other winners were Apple with a score at 70, L.L.Bean (which won in most categories), and Banana Republic, which won for best cross channel performance. Scores of those companies that did not receive top grades were not available, but the distance between top scores and the average suggests there is a lot of room for improvement surrounding good service on the Internet, be it either mobile or desktop. The low average scores suggest that retail CIO’s may not understand that great technology is not enough to win today’s consumers. Technology has to have a heart and customer relationships have to be warm and caring. Good service requires a personal touch. Those brands and retailers who do not figure it out are destined to be passed over by the next generation of consumers.
