3 Reasons Why Old Navy Is Surging

After struggling for several years, Old Navy has in the last year become the star of the Gap portfolio with sales of $6.5 billion – almost double that of Gap. CEO Stefan Larsson, who came from H&M in October 2012 (and left to be CEO of Ralph Lauren in October 2015) and CMO Ivan Wicksteed get a lot of the credit. How did they do it? Building on the Old Navy funky personality and value pricing, they made some tactical home runs, orchestrated organizational changes, and elevated in-store execution of some of the basics. Three elements of the strategy stand out.

Upgrading Product Relevance and Interest

A challenge for Old Navy has been to create product relevance and interest, to be more than a value store. Toward that end, their merchant staff was upgraded by drawing talent from brands like Coach, Reebok and North Face. The resulting team collectively improved design instincts around what would sell. The process was changed so promising design concepts could be pursued through a “test and learn” system. The system was based on a fabric platform that allowed designers to quickly test various prints, shapes and sizes in smaller runs in stores before committing to larger scale production.

A huge hit was the pixie pant: a slim, cropped woman’s pant developed based on insights from the fashion world. The pant was a home-run - it not only sold well, but also generated social buzz among key segments.

Addressing Customer Experience Pain Points

Customer pain points are not difficult to identify in a store – the experience involves finding, trying-on and buying. The problem was how to address them. Old Navy made customer experience a priority and elevated its execution.

One ingredient was to reorient the sales staff to better help customers get around the store and give advice when wanted. The sales associates were trained to show alternative items on a digital device. In addition to being involved and helpful, it boosted customer awareness of the digital vehicles available for purchase or future shopping. Another ingredient was to seamlessly integrate online buying when a customer finds that a size or color is missing from the stock. A third was to make the process of touching, feeling and trying-on easier and more of a priority. Again, it was the execution rather than pain-point identification that stands out.

Underway are more enhancements like delivery alternatives for those that prefer not to carry a purchase out the door. Another will be the ability to check-out through mobile apps from anywhere within the store.

Home Run Promotions that connect

Old Navy hit gold with its 2015 back-to-school #unlimited campaign. The firm asked kids at Boys & Girls Clubs around the country what it means to be #Unlimited. The inspiring answers helped provide the lyrics to a catchy song sung by some of top online stars of DreamWorks’ AwesomenessTV and included “You will be strong, be brave, be unlimited” and “The days you don’t believe, those are the days you’re gonna need to.” The singers are shown roaming through a high school wearing the #Unlimited T-shirt in a video that has gotten well over 12 million views. The programs have raised money for Boys & Girls Clubs through t-shirt sales, video downloads, and matching in-store contributions. A similar video made last year featured a singer in the 8 to 12 year old segment facing her personal anxiety and doubt on her first day of school got over 6 million views and an Emmy nomination.

The whole program is supported by Camp Old Navy which has since 1999 given underserved youth access to after-school opportunities involving organized learning and play. Research shows that such kids are 30 percent less likely to get involved in crime and 50 percent less likely to get involved with drugs. Since 1999, Camp Old Navy has served over 90,000 kids and carries the flag for its higher purpose.

Then there is the million dollar giveaway. Every year during Black Friday, 50 shoppers from each store are selected to participate in a drawing for one million dollars. There are some amazing stories that have resulted. The winner in 2015 was a young mother living with her mother and boyfriend. She planned to use the money to help with home expenses and help to rebuild the local church. The irreverent campaign emphasizes Old Navy’s trademark sense of fun, fashion and value, and was designed to capture the attention of hundreds of millions of people in a way that’s befitting to the personality of the brand. It is so Old Navy. The fun side of Old Navy is enhanced by some brilliant humorous advertising, the latest versions featuring Julia Louis-Dreyfus. The ads show off-beat characters being contrasted with cool people who shopped at Old Navy.

The overarching goal of Old Navy was to create a fun, emotionally engaging shopping experience that enhanced its core personality and value proposition. Do you think they’ve succeeded?

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