Old Navy Tries to Get a New Image

Q&A: Marketing Chief Says Retailer Will Target Women in Their 20s

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Since joining Old Navy a year ago, Michael Cape has had his hands full.

Sales growth at the struggling Gap Inc. division began to slow in 2003 and has been steadily declining since 2005. A makeover, it appeared, was long overdue, and Mr. Cape, exec VP-marketing, was more than happy to oblige. "We were trying to be all things to all people before," he said. "We really need to resonate with who we're going after."
Michael Cape, exec VP-marketing at Old Navy
Michael Cape, exec VP-marketing at Old Navy

To that end, Mr. Cape, a former JC Penney exec, plans to use the full force of his $225 million advertising budget to target, primarily, women in their 20s. Major spring and fall campaigns will highlight the retailer's commitment to the group, while other segments, such as adults who make purchasing decisions for children, will be reached with circulars and direct mail. Mr. Cape talked to Ad Age about his strategy.

Advertising Age: What was wrong with the old ads? A lot of people liked the campy vibe and the dog.

Michael Cape: It was great. It was breakthrough creative. But our goal is to present our brand as modern and fashionable. We needed to move on. That's the bottom line. We're not going to be delivering madras shorts for the family anymore.

Ad Age: As the retailer who became known for touting fashions for the whole family, why are you now focusing so heavily on women in their 20s?

Mr. Cape: We are distorting our resources toward her because she represents a larger volume for us in our stores. Women represent over half of our assortment in our store. We are distorting our resources right now to get the fashion credibility for the brand.

Ad Age: So how do you plan to reach that customer?

Mr. Cape: We view TV and the brand site-let as acquisition tools to bring people in and discover the new Old Navy. We've got a great reputation of high-quality basics at a great price. Now, our goal is to show that we're modern and fashionable and presenting these great trend-right collections every month.

Ad Age: Why are you putting such a big emphasis on online with this campaign?

Mr. Cape: [This customer] spends a lot of time online, so in addition to TV, we have our brand site-let that is very interactive. We're very connected to the 20-somethings. We're everywhere they are, and our ultimate goal is to speak to them, in their language, where they are.

Ad Age: But what about adults who shop for kids -- how with you go after them?

Mr. Cape: We'll have an ongoing cadence of marketing throughout the year to reach out to the adult shopping for kids. Circulars are the headline there. [There will also be] radio and direct mail.

Ad Age: All of the imagery for your spring campaign is very fashionable, young and sexy. Aren't you afraid of turning off the moms shopping for kids?

Mr. Cape: Absolutely not. We're selecting the proper media tools to reach out to that customer. Children are still very important to us. We still have a very strong kids' business that we have a loyal customer for.

Ad Age: So how will the ad messages work together?

Mr. Cape: Before, our creative was not all tying together very well. We want to present a fully integrated campaign for the brand, where all vehicles and consumer touch points tie together with one look and one language. We really want to offer up this logo as a fresh, new look for Old Navy. And we're truly introducing it across everything this month. New packaging throughout the store is rolling out this year, section by section. From credit cards to shopping bags, all the way down to team members' name badges, it's a soup-to-nuts approach to really have one brand voice for Old Navy.

Hotter than that fleece ad

Goodbye, camp. Hello, sex appeal.

As it struggles to recapture share in an increasingly competitive environment, Old Navy is reimagining itself as a fast-fashion haven for women in their 20s.
The campaign, which breaks Feb. 14, will include TV and print, as well as a significant online presence. It does not, however, mark an increase in spending. The retailer's roughly $225 million annual budget will remain flat.

One spot -- in 30-second and 60-second iterations -- is planned for each of the next four months to showcase the retailer's collections, which now will be cycled in monthly. The commercials, created by Chandelier NYC, are structured like a miniseries, with the same cast of model-cum-actors featured in each.
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