Old Navy Recruits New Shoppers

Mar 01, 2004

By George Anderson

No one involved with Old Navy at the beginning could have seen what a hit it was going to become with consumers. They also didn’t see the falloff in business that was to follow.

Jenny Ming, president of Old Navy, told the San Francisco Chronicle, “One of the things we tried to turn around was improving the product. That went well for a short period of time, and then it got worse again. I was like, ‘OK, do we really know what’s wrong?’ That was in 2000, the first time we talked to our customer.”

It became clear to all involved that the company would need to do a better job in dialoguing with its customers. Using market research, the retailer was able to identify and respond to underdeveloped consumer segment opportunities.

The results showed Old Navy had the opportunity to expand sales beyond its primary business of families, teens and young women to include, for example, the “average guy.”

Ms. Ming said the average guy doesn’t like to shop but sometimes has to replenish their wardrobe of sweats, T-shirts and socks.

“Say I want to grow this ‘average guy’ (business). What really brings him to the store? Actually, socks — because they have to replenish that.”

“Our men’s business lags our women’s business, but it’s getting better. “

Another opportunity for Old Navy was the rapidly expanding Hispanic consumer market.

Susan Wayne, the marketing chief for Old Navy said, “We have a lot of Hispanic or Latino customers already. They’re in our stores. That marketplace is very family oriented, so we’re a perfect environment.”

The retailer launched its first Spanish-language television commercial campaign last year and it plans to build on that effort in 2004.

Moderator’s Comment: What does Old Navy need to do to maintain its popularity with consumers?
What are the biggest obstacles it faces?

When Old Navy was originally launched, it was unique. It soon became a victim of its own popularity, losing some of its perceived uniqueness because of
stores opening all over the landscape. Add to that the inevitable copycatting by other retailers and it wasn’t long before the Old Navy concept started to get a little old.

Anderson – Moderator

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