Lands’ End CEO Federica Marchionni was not pleased with the company’s second-quarter performance, which saw sales drop off by $35 million as a result of a decline in the retail and direct segments. Ratcheting up brand awareness, coupled with stronger customer engagement, are two key strategic priorities for Marchionni.
“The second quarter results were disappointing and the performance is not acceptable,” Marchionni said during the company’s Sept. 3 second-quarter earnings conference call, according to Seeking Alpha. “However, we are taking many actions at this time not only to address the current business but also to have a stronger product offering, marketing proposition, go-to-market strategy, and operating platform for future periods. Since I joined the company early this year, my objective has been clear, growth, profitability and adaptability. Those will result from a combination of enhancing our core business as well as attracting new consumer and operating in new retail environment.”
Marchionni said the company’s priority growth is to maximize its potential with its core customer by increasing the fundamental metrics such as average order value, unit per transaction, traffic, and conversion.
“Core customers have always been our highest priority,” Marchionni said. “In tandem with the core business, we are seeking to expand our Lands’ End family by ensuring we have relevant product offering for every generation in our target consumer household. We feel that brand awareness is a very critical measurement. We have begun a marketing and messaging campaign that is intended to improve our brand identity and awareness as well as expect to generate additional revenue. We thought to create a powerful, high-impact advertising campaign that truly sticks to both our core consumers and the new extended audience across major media platform in both print and digital formats. The campaign allows us to strengthen our brand identity as an iconic American brand.”
What’s more, Marchionni expects to drive significant increases in total print and digital impression in the third and fourth quarter as well as enhanced customer perception, expand the Lands’ End family to include a new audience, drive consumers to the improved website, and pave the way for them to view Lands’ End through a completely fresh lens.
Marchionni said the second quarter saw declining performances in all channels: Online, catalog, and retail shops. The declines were mainly related to disappointed customer acceptance of the Spring/Summer collection and marketing initiatives.
“The assortment which was committed to well over a year ago was largely upfront and did not resonate with our consumer,” she said. “We began to test some changes to our U.S. marketing strategy as it relates to our catalog stipulation. We believed we could be more productive in our insurance of catalog which will continue to be our main tool, but with a higher performance rates. A survey of our customers to better understand how they preferred us to communicate with them reaffirmed our strategy to reduce our catalog mailings.”
Since Lands’ End’s direct segment represent its largest revenue channel, company officials are focused on providing loyal customers and new customers a more compelling and simplified online experience to ultimately increase conversion rate and average order value.
“In the second quarter, we took an important first step by introducing an online feature which we feel makes the shopping experience more effortless and enjoyable,” Marchionni said. “This alternative design offers a streamline product index with an update product presentation. The launch was completed on May 27 and was successfully accepted by our loyal consumer and through it we drove new customer acquisition. We decided to fully revamp our website and we expect to reverse the negative trend faced in our previous quarter.”