Charming Ralph Lauren for the Young
Searching for some buzz, the 52-year-old fashion house using tactics straight from the “Hypebeast” playbook — industry slang for shoppers who are mad about clothes that get extensive publicity. Like apple fans camping out before a new iPhone is released, these loyal buyers are willing to stand in line for hours to get their hands on the latest sneakers or t-shirts from brands like Supreme or bath gorillas.
“We’re in the brand-building business,” Ralph Lauren chief executive Patrice Louvet said in an interview Tuesday. That comes at a cost. The company raised its marketing investment 18 percent in fiscal 2019 compared to the year prior. Love decides to increase that budget to 5 percent of total sales—which would be over $310 million — to court younger buyers. “We do want to ensure we have competitive marketing support” so as to attract new shoppers to the brand, he said.
That cash will be spent mainly on social and digital as the brand moves away from traditional print ads. The company has brought on a new cohort of younger celebrities to sell its goods, such as Taylor Hill, the face of its Romance fragrance.
Currently, the boosted marketing budget has been a very successful piece of Ralph Lauren’s revitalization plan, together with a cutback on discounts and inventory. Last quarter, it reversed a streak of same-store sales declines going back to 2015. On Tuesday, the company reported upbeat earnings that beat analysts’ expectations and said marketing during the crucial holiday season was paying off, sending its shares up the most in eight months.
In recent years, Europe’s luxury houses have made a conclusion that streetwear cannot be ignored if they’re to win over millennials and Gen-Z. Last May, Louis Vuitton hired Virgil Abloh, the designer behind the Off-White streetwear label, to lead men’s design.
However, Ralph Lauren is beginning to learn the playbook. When the brand launched its Winter Stadium collection last fall, it cooperated with streetwear mainstays Opening Ceremony and e-commerce site HBX.
Last November, Ralph Lauren released a new collection in partnership with Palace, a British streetwear brand. Instead of selling a limited number of goods in all stores, the newsletter des boys are stored in South Korea through polo and online apps at Ralph Lauren outlet locations and specialty boutiques such as Dover street market where several choices of clothing are sold. The classic sneaker strategy is the right one to put on the script: create scarcity and borrow from a reputable brand partner. Since its launch, Ralph Lauren’s website has struggled to keep up with demand, and palace wear is now sold on the secondary market for far more than the retail price, as is often the case with limited editions. About 75 percent of customers who buy at partner stores are new customers, Louvet says.