Fashion Retail Advertising Still Works, Even if Stores Are Closed, According to a New Study
Retailers that increased marketing in late March as the coronavirus spread posted sales increases, according to intelligence firm Measured.
With most of non-essential retail on a pause, few fashion brands are spending much on marketing. But a new study suggests that ramping up messaging and promotions to consumers during the coronavirus outbreak could pay off with more sales, even as retailers such as Gap, Everlane and Ralph Lauren have closed up physical locations and furloughed employees.
Measured, an analytics company, studied marketing and sales data for a host of fashion retailers, including both native ecommerce brands and brands with brick-and-mortar shops. It found that brands that ran aggressive promotions and either bumped up or didn’t decrease their media spend on digital channels and TV saw online sales increase by an average of 81 percent from March 16 to March 29 compared with the month-earlier period. Also, online sales jumped 70 percent on average compared with the year-earlier period.
“Those who kept marketing dollars in did better,” says Madan Bharadwaj, co-founder and chief technology officer of Measured. “There is demand, and if you market into it, you can continue.” He notes that many consumers are staying home but still shopping online. “If you actually invest into this market in an innovative-driven way there is an opportunity,” he said, adding that many consumers still have disposable income, particularly from the money they are not using for eating out in restaurants, for example.
Old Navy is currently airing a 15-second TV spot promoting deep discounts of 50 percent on its products and urging customers to visit OldNavy.com. According to iSpot data, the commercial began running in late March. (But the scenes showing people sitted at a café seem out of place in the stay-at-home era, suggesting the ad was made a while ago.)
Measured reports that 42 percent of the fashion retailers it studied pulled back marketing in the second half of March. For those that cut spending, online sales fell by an average of 40 percent compared with the year-earlier period, and 19 percent compared with the month-earlier period.
Brands that are still doing a lot of marketing should be careful to avoid looking tone-deaf or too aggressively sales-driven, experts warn.
According to a recent report by Forrester analyst Dipanjan Chatterjee, 75 percent of consumers think it is wrong to exploit the coronavirus crisis to promote a brand. “Go easy on the hard sell,” wrote Chatterjee in his report. He expects a short-term slowdown in advertising spend, particularly in search advertising, as brands evaluate their budgets.