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J. Crew and Ralph Lauren: The Hard Lessons Consumers Are Teaching The Fashion Industry

The recent management upheaval at J. Crew bears many similarities to those at Ralph Lauren Corporation, besides the obvious difference that as a public company, Ralph Lauren’s struggles are more transparent. Both companies have been led by fashion industry visionaries, who for years had the golden touch bringing to market clothing that American consumers, especially the economically well-endowed affluents, favored.

Both filled their stores with iconic “preppy” looks and year-after-year, season-after-season, went back to the same well to reup the line with little tweaks here and there. And both kept pushing the envelope of price, testing how far their customers’ wallets would stretch.

Success bred success and more stores were opened as they sought to bring their fashion “worlds” to a wider market. Along the way, they also decided that more customers with less spending power aspired to their brands, so they spun off lower-priced lines and opened factory outlet stores where even the hoi polloi could indulge.

Then the Great Recession happened, and both companies, having been through recessions before, hunkered down to ride it out until the business cycle improved, as it always has. But this time it didn’t.

Seemingly overnight the consumers had moved on. Mickey Drexler and Ralph Lauren lost their golden touch. Each rudely learned “what got you here isn’t going to get you there,” borrowing from Marshall Goldsmith’s best-selling book.

Largely pointing the finger at the disruption from the internet, both companies are now bringing in very successful, younger executives to lead the troops. Neither Patrice Louvet for Ralph Lauren nor James Brett for J. Crew come directly from the fashion industry. While Brett’s resume includes previous stints in fashion, that is not where he achieved his greatest success. It was at West Elm, the younger, hipper home furnishings brand from Williams-Sonoma.

Bringing in fashion outsiders may be the road to success

Perhaps coming in as fashion industry outsiders will prove to be the key advantage for both men as they assume their new leadership roles at Ralph Lauren and J. Crew. As new entrants into the world of fashion, they have got to recognize what they don’t know and work hard to be schooled by today’s fashion customers.

They must start with the basics to make each brand relevant to their current and future customers:

  • Who is the customer?
  • What do they want?
  • How do they want to shop?
  • What are they willing to pay?

It’s going to take deep-dive market research, and not just the quantitative big data presented on spreadsheet reports. They’ve got to get into the stores to rub shoulders with their customers, and out into the broader world to learn from people who don’t wear or care about their brands.

They must hear the good, bad and the ugly from the customers they want to attract and be willing to change the company, its product offerings and its delivery methods to give it to them.

They have got to breed a consumer-centric culture within their companies and let the customer lead. This is not a discipline common in the fashion industry, where visionary designers see their role as the leader and the customers’ to follow. Mickey Drexler and Ralph Lauren both fall into this camp.

The boards at both J. Crew and Ralph Lauren, having chosen leaders from outside of the fashion industry, are betting that these successors will embrace a new way to adapt the corporate culture to the current fashion market where the customer, not the company, ultimately has all the power.

Jim Blasingame, the small business advocate, in his book The Age of the Customer:  Prepare for the Moment of Relevance gives cogent advice to Brett and Louvet as they assume their new roles:

The age of the customer is upon us. After centuries of markets driven in large part by those who sell, today’s competitive environment is driven by the customer. This means marketers can’t go forward with their marketing plans without deep consumer insights about motivations, not just behavior or demographics.

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