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Ralph Lauren Corp. will be a fundamentally stronger company when the pandemic finally ends as the health crisis has forced the business to accelerate several initiatives that are expected to spur growth in the future.
That was the message from Patrice Louvet, president and chief executive officer of Ralph Lauren, who spoke at the National Retail Federation’s Retail Leadership Series on Tuesday morning.
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In a conversation with Matthew Shay, president and ceo of the NRF, Louvet speculated on what the next five years will look like and how his company will win in this new normal. “We have to come out of this stronger than we came into it,” he said. “I like the quote: ‘Never let a good crisis go to waste.’ And this has been our mind-set as we navigate through this crisis. But the fundamentals of this company are stronger than when we started at the beginning of this year.”
He said there are “five key accelerators” that will drive the 53-year-old business ahead over the next half century and beyond, and allow it to offer “unique value that is distinctive and competitive.”
First is to “elevate and energize the brand” and bring the next generation of consumers into the fold. He pointed to the successful launch of the brand this summer of a virtual wardrobe on Snapchat for bitmoji users. Louvet said more than 13 million people dressed their bitmojis in Ralph Lauren and over 300 million tried on the clothes — numbers that far exceeded the company’s projections.
The second driver will be the continued shift toward direct-to-consumer, he continued. Although the Ralph Lauren brand was built on a wholesale model, “we want to pivot to more direct ownership of the consumer experience. That guides our focus on investment so we are able to provide a unique experience to the consumer that reflects the standards, the values and the environment we seek for the brand.”
Third is enhancing the digital experience. Although brick-and-mortar stores will continue to be important, Louvet said the Ralph Lauren web site “needs to be our online flagship.” For this holiday season, the company created virtual storefronts for its stores in New York, Paris and elsewhere to encourage customers to visit remotely for their holiday shopping in a move that blends the physical and digital experience.
Fourth is international expansion “with a deliberate focus on China where we have a good foothold and the brand has good traction, but it’s very early days when I compare it to our higher luxury peers.”
The fifth accelerator is to “develop high potential, underrepresented categories in our business today.” Specifically, that includes home, outerwear, ath-leisure and beauty. “One of the beauties of this brand is that it’s a lifestyle brand so we’re not pigeonholed into one or two product categories. We’re actually able to play across a wide range of options. Our challenge is actually more to choose than it is to play. We can sell you a pair of socks for $10 or a watch for $10,000.”
Louvet added that there is actually an “overlay” on top of all of these accelerators: “citizenship and sustainability. I am convinced that you cannot be successful long term if you do not lead in these.” He said the company is making progress and will continue to push forward with these initiatives as well.
Louvet said that he expects there will be other lasting changes as a result of the pandemic. That includes an overriding emphasis on health and safety, which has “become an important dimension in the consumer shopping journey,” along with a quest for a connected retail experience that will require brands to build long-lasting attachments to their customers.
In addition, consumers will be searching for a more-personalized experience. “We want to make sure we understand them better so we can serve them in a way that really meets their needs and expectations,” he said. “Our ambition is one-to-one marketing, and ultimately, every consumer has a different experience with Ralph Lauren — still grounded in the core values and execution, but really unique.”
Figuring out how to best communicate the brand’s values and purpose will be important in the future, he continued. He said that at the beginning of the pandemic, the company halted all brand and product communication and shifted to “purpose-driven” messages of hope, family and optimism. “And we saw an amazing response from consumers” in terms of purchase intent, brand consideration rank, and core brand equity. “At a time when people have been rattled, I think brands have a very important role in providing inspiration and clarity on the brand’s purpose: what difference will it make beyond selling product.”
Authenticity is one of the core Ralph Lauren tenets, he continued, “and we need to put our money where our mouth is in terms of purpose and values.”
He said the company has also learned some lasting lessons: “focus on what matters most, resilience, agility. I think the agility point will continue to be a core muscle we will continue to build because of this ever-changing world that we operate in.”