The Gap is good TV-free, but Old Navy needs a rescue-at-sea

I'll tell you the moral of this story up front: sometimes not advertising is a great way to advertise.

Advertising Age recently noted that the GAP continues to eschew television advertising as part of its overall marketing plan. While this allows the company an 18% savings in advertising expenditures, it coincides nicely with GAP’s recent profitability (up 40% according to some sources). A quick look at the numbers shows that the original GAP brand and Banana Republic are moving out of a sales decline, while the lower-priced line Old Navy struggles along. Given the fact that the GAP line is mostly promoted in print magazines and billboards, much of their overall corporate TV ad budget goes towards Old Navy. You might think there’s a direct correlation here (Less TV = Better Sales) and while there’s certainly some relationship, it’s worth examining some of the other branding variables for both lines before we pinpoint the exact cause of death on a still-breathing corpse.

First, Old Navy has been struggling with its product line for some time now. According to the NY Times:

Last month, the company said its lower-cost Old Navy chain had become too fashion-oriented, with an emphasis on youthful women’s clothing that put off customers shopping for basics. Weakness at the chain prompted the departure of its president, Dawn Robertson, in February.

President for less than two years, Robertson’s strategy of aiming for a younger market and hiring designer Todd Oldham to create new products never really stood a chance. Oldham’s safari-themed prints are still bulging out of the half price rack and it’s the end of May -- an eternity in Old Navy turnaround.

Down the street at its sister store GAP, though, a considerable amount of energy and money has been spent on re-shaping the brand with social consciousness recognition. The (PRODUCT)Red campaign was mainly done through print ads, with famous do-gooders wearing the Red line, to raise awareness and money for HIV/AIDs research and health care in Africa. Despite criticisms about how many of these funds actually make it to direct aid and sluggish sales early on in the campaign, the imprint of celebrity charity literally adhered to the Red line at GAP. More recently, the company is going to sponsor a conference on international child labor campaigns, as much to raise awareness as to save face after watchdog groups targeted child labor in Gap-contracted factories in Dehli.

Finally, in a slightly safer vein, GAP’s latest venture is a line of art t-shirts designed by an array of artists connected with the Whitney Biennial. Most are well known and already well compensated (Chuck Close and Kiki Smith), so it’s not clear what “support for the arts” means in this case (“allowing more people access to fine art,” was one suggestion, although $38 a t shirt is still out of the ordinary joe’s price range).

The strategy is still a hit, though, since it hints at the charitable and social consciousness vibe and certainly stays in line with the tastes of GAP’s main customer base in the educated upper middle class. While these folks are also pulling back spending, a combination of selling the basics and selling a message may keep GAP itself afloat.

So why is Old Navy sinking? You’d think the lower cost line would be thriving in recession times, especially when merchandise gets moved through the store and discounted at such a fast pace. Summer clothes are already in the half off racks, but I see fewer people in the store every time I walk by. Yes, the teen market is definitely sluggish right now, but an even bigger problem is that Old Navy has no identifiable style, since it shifts and re-shifts its product line so quickly. There’s too much variety with no coherence. More importantly, no single product remains to be the “signature” piece drawing shoppers back inside. Variety is not always the spice of life.

The real genius who’ll throw Old Navy a life line needs to come up with a single print or television campaign that will not sell merchandise, but link the brand to something beyond its retail doors. (Currently, the closest they get is a charitable donation incentive if you fill out their online survey after shopping there. As one financially savvy teen commented as he went through the checkout, “yeah, sure, so YOU can get the tax break.”)

Until then, GAP’s management is right to save money, avoiding celebrity commercials or campy ads with kitschy references and focus on getting the merchandise connected to a loyal consumer base. Their bet on out-of-home media also seems apt, as more retailers pump ad dollars into posters, billboards and other below-the-line media every day.

But even great cause marketing and the right choice of media won't be enough to save everyone... Right now, shoppers need a pretty solid reason not to limit themselves to department stores, where they can save time and gasoline and the clothes actually last more than a single season. So until Old Navy finds their special purpose, it might be best for them to keep those advertising dollars in hand.

Tags: advertising, retail, out-of-home