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When Federica Marchionni became CEO of Lands’ End in February 2015, there was going to be some change from a casual clothing retailer to a higher fashion style, which is a bit different from the brand’s history.
Engaging customers and gaining brand loyalty has been foremost among her goals. Judging from the company’s recent second-quarter fiscal performance, though, challenges remain.
Consider that net revenue was $292.0 million, compared to $312.4 million in the second quarter last year. Direct segment net revenue decreased 6.9%, to $246.4 million. Retail segment net revenue decreased 4.3%, to $45.5 million, primarily driven by a 2.5% decrease in same store sales and a reduction in the number of Lands' End Shops at Sears.
Marchionni said during the second-quarter earnings call that product offering remains the company’s first priority, as well as refining marketing initiatives, which includes elevating product presentation and messaging. On the commerce front, Lands’ End continued to roll out its multi-branded website shopping experience.
In addition to an online segment dedicated to its Canvas by Lands’ End brand, it recently launched additional segments dedicated to Lands’ End Sport, school uniform, business outfitters, and Lighthouse brands. These efforts are designed to expand brand awareness for Lands’ End overall and broaden its customer base, Marchionni said.
“We can now leverage this differentiated site to target consumer with a more personalized experience with something that’s relevant to their needs,” she added. “As we look to the holiday season, we’re excited to launch our new mobile application, as well as an improved online shopping experience on our e-commerce site. In our retail location at Sears we saw improved performance versus prior quarter, driven by our core products and enhanced inventory control.”
Lands’ End continues to evolve its merchandise assortment, offering quality, value, and style in products that appeal to its customers’ lifestyles.
“Our focus is an increasing product relevance and reinvigorating the assortment with greater design appeal and innovation in our traditional styles,” Marchionni said. “We also remain excited about the opportunity in our new Canvas by Lands’ End brand, which is targeting a more and modern customer, but still embodies the Lands’ End DNA.”
Can Marchionni return Lands’ End to prominence amid various fashion and style changes?
Carrie McIlveen, U.S. Director of Marketing, Metia, told Loyalty360 that Marchionni has made many changes in the past 18 months.
“The transition from sensible, well-made styles into a fresh, new high-fashion look is gaining notice among consumers,” McIlveen said. “But is it in a good way? As Lands’ End adapts its new approach, it is critical to ensure the changes are driving new consumer audiences without damaging the relationships of its loyal customers. There is a growing expectation that good customer experience will feel effortless and personalized. Lands’ End should consider utilizing data-driven insights across all aspects of the customer journey to tune into its audience’s conversations on various platforms. People readily share massive amounts of information online and can help them to delve further into customer interests and affinities. By exploring its customers’ feelings, motivations, and expectations, Lands’ End will have a deeper understanding of how to effectively deliver meaningful experiences that resonate with them and their lifestyles.”
Chirpify CEO Chris Teso told Loyalty360 that the future of marketing will revolve around providing customers with utility, making it easy for them to interact and do business with the brand on their terms.
“Lands’ End push for personalization is a step in the right direction, which has potential when paired with the mobile app it is launching in time for the holiday season,” Teso explained. “However, while just last week ComScore announced results of a survey showing that Smartphone apps are now 50% of all U.S. digital media time spent, not all apps are created equal with social media apps getting a lion’s share of that digital time. As a result, the Lands’ End mobile app needs to be part of a larger, holistic program in which the company provides personalization and utility to customers across channels. We are seeing retailers who apply loyalty marketing approaches with the ability to recognize and reward customers across channels as having the biggest returns on their digital investments.”
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