Vera Bradley CEO Rob Wallstrom admits that reduced promotional activity has negatively impacted the company’s overall site traffic and sales, but has generated substantially improved gross profit percentage performance. Elevated customer engagement, new customer acquisition, and customer retention are three key priorities as Vera Bradley focuses on brand building to strengthen customer relationships.
“Marketing and brand building are critical investments as we engage new customers and strengthen our bond with our existing customers,” Wallstrom said during Wednesday’s third-quarter earnings conference call, according to Seeking Alpha. “Our primary marketing objectives are to generate brand awareness, evolve our brand perception, drive store and site visits, and inspire brand engagement.”
Ecommerce remains a key part of Vera Bradley’s distribution strategy, Wallstrom noted.
“Our long-term goal is that verabradley.com will convey our brand and product story and, ultimately, generate more full-priced selling,” he explained. “In order to do that, we have three main focus areas. Strategically paring back our hyper-promotional activity which began in January 2015, improving our website engagement features such as dramatically enhancing our search capabilities, which we completed in the second quarter of this year, and redesigning and converting our website to a new platform which will be complete in the fall of next year.”
Customers are responding to new product offerings, Wallstrom said.
“For the second quarter in a row, our direct comp sales trends were better than our traffic trends,” he explained. “We see indication that awareness of and affinity for our brand are increasing, and we are beginning to see new customers come into our brand and customer retention improve. We are also seeing continued enthusiasm and growth from our department store partners. We are making progress in gaining some traction, but we realize it will take more time and substantial effort to return the business to solid top-line growth. We believe we have the product, distribution, and marketing initiatives in place to achieve our fourth quarter financial plan and to continue improving our momentum into fiscal year 2017.”
Third-quarter net sales inched upward, 1.2%, to $126.7 million.
“Customers continue to offer positive feedback about our new full-line store design,” Wallstrom said. “Traffic continues to be challenging, however, particularly in the centers that house our full-line stores. We are certainly not alone in this dilemma. Department stores are another key part of our distribution strategy, allowing to us introduce our brand to new customers and showcase our new product assortments. Our department store partners remain very supportive of our product and brand direction.
In the past 18 months. Vera Bradley doubled its department store footprint to about 620 locations, which includes 250 Macy’s stores.
“Our comprehensive and cohesive marketing plan consists of national print combined with richer content on social media, and an increased emphasis on public relations, and more targeted digital media spend,” Wallstrom said. “We believe this combination will ensure we have both a broad, yet targeted reach. We feel good that the marketing campaign is definitely starting to move us in the right direction. We’re seeing more new customers come into the brand. We’re seeing retention improve. We’re seeing our social metrics go up. So we feel that we’re off to a very good start.”