Wooing over young consumers is the puzzle retailers in every sector are trying to solve. But bringing Millennial and Gen Z shoppers on board needs to be a long-haul effort, as younger consumers continue to amass spending power year after year.
While upstart labels and retailers seem to have an edge when it comes to courting the new consumer, venerable names like Barneys and Levi’s are proving that even 100-year-old brands can be young at heart.
“People seem to think you can’t be Barneys and serve a younger consumer,” Daniella Vitale, president and CEO of Barneys New York, said at a Shoptalk event. But Barneys’ brand DNA isn’t in opposition to streetwear and other styles that signify luxury for the younger set—and it’s able to capture younger consumers without alienating its established based, which skews older.
“Everyone in my sector defines luxury in a very specific way, but who are we to tell someone what luxury means to them?” Vitale asked. She pointed out that younger consumers are just as willing, if not more so, to spend on newer brands like Heron Preston as they are established brands like Armani. “We can satisfy a wide audience, while still celebrating talent and artisanal quality and design,” said Vitale.
Around 60 percent of Barneys customers under 34 are shopping in the physical stores, and that number grew by 25 percent in 2018.
Along with product, Vitale said Barneys is also experimenting with a new loyalty program that will have experiential incentives, not just points rewards. “We need to go beyond product, and become a venue,” Vitale said. “We have a robust restaurant business, we have robust beauty services to offer. It’s not just about commerce.”
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The incentives bring an experiential dimension to the retailer, which also has had luck with The Drop, a weekend-long event that brings designers like Fear of God and Virgil Abloh to the storefronts for panel talks, art installations, branded activities, and—as the name insinuates—drops of brand-new collections exclusive to Barneys. The inaugural events resulted in a 100 percent increase in the number of younger shoppers in-store, and many of those consumers returned to Barneys months later, Vitale said.
At Levi’s, a similar recalibration is taking place, shifting the narrative of a storied American brand into the consumer’s hands. Allowing demand to drive design, and not setting the agenda for consumers each season, is how 20th-century brands are keeping their momentum in the digital age, said Marc Rosen, executive vice president and president of direct-to-consumer at Levi’s.
The F.L.X. technology Levi’s developed at its Eureka Innovation Lab in San Francisco epitomizes the “demand-driven design” mindset, allowing consumers to design fully-custom jeans from classic Levi’s silhouettes. Rosen announced at Shoptalk that the technology will go live on Levi.com this fall, and Sourcing Journal covered the news in-depth. The announcement represents the culmination of the plans Levi’s has enacted to re-define its brand legacy.
“As direct-to-consumer and e-commerce have emerged as more important, we’ve evolved our model,” said Rosen. “Now a third of our business, and 3,000 stores, represent our direct-to-consumer business around the world.” The layout of those stores will be changing to better showcase the craftsmanship and customization at Levi’s. The in-store tailor shop, previously relegated to the back corner of the floor, will now be in the center of Levi’s stores, creating what Rosen called a “collaboration studio.”
Eventually, as F.L.X. technology is integrated into Levi’s stores, Rosen hopes to change the appearance and experience of the stores entirely. “Every one of us would like to get rid of that clearance rack in the back of the store,” he said. “What if we could shift our focus to inspiring consumers about what they can create?” Along with existing assets on Pinterest boards, Levi’s is building a visual search tool that can help consumers find inspiration for their custom jeans. In addition to the tailors, in-store stylists also will be integral to the Levi’s experience, guiding consumers through the design process and empowering their choices, Rosen said.
“When we think about what this transformation means to us, it is really a shift from selling what we make, to making what we sell,” said Rosen. “And that transforms every single part of our business model.”