Most retailers are tripping over themselves trying to stay relevant by courting younger Millennial and Gen Z shoppers. Not Land’s End.
While it appears to be growing its customer base, Lands’ End bucks the trend by purposefully embracing the “forgotten generation,” Gen Xers.
They are the generation of consumers sandwiched between the baby boomers, born in the post-World War II years, and their children, millennials, whose firstborns were born in the 1980s.
“There was a strategy in place at a time when we wanted to bring in millennials,” Jerome Griffith, CEO of Lands’ End, who will retire at the end of January, said at the ICR conference last week. “It didn’t fly with our customers.”
In a rush to grab the attention of younger consumers, the retailer stumbled and made fashion missteps. Sales plummeted as key older shoppers were put off by stylish dresses and high-heeled party shoes popping up alongside the comfy clothes embraced by moms and dads.
“So we said, you know what, we have this neat generation of customers right behind baby boomers, the Gen Xers. As we look for new consumers, let’s go after them,” he said.
Given that the number of Gen Z and Millennial consumers should grow to 70% of the population by 2028 versus 60% by 2021 – and they have significant purchasing power – it’s not surprising that retailers are chasing that group of customers.
“While the Gen Z and Millennial cohorts are both lucrative and interesting, there is a kind of obsession with them in retail and fashion that often comes at the expense of older generations,” said Neil Saunders, retail analyst and general manager of GlobalData.
“The truth is that more mature cohorts are responsible for a lot of retail spending and there is a significant opportunity that is not always well exploited,” he said.
Lands’ End, a 60-year-old brand based in Dodgeville, Wisconsin, is best known for its classic sustainable casual wear – fleece jackets, coats, pullovers, T-shirts, chinos and pajamas – designed more for comfort than to conform to trend . It sells its products by mail order, online, in-store, and through third-party marketplaces such as Amazon (AMZN) and Kohl’s (KSS).
But the company says it knows who its core customers are.
“She’s the baby boomer, mid-50s, lives in the suburbs, works, is frugal, has a family income of over $100,000 a year, and has or had children at home,” Griffith said.
About six years ago, the core buyers’ database, who typically stayed with the brand for 18 years, was shrinking. “We were losing customers,” he said.
“It’s pretty rare in retail to have a customer stay with your brand for that long,” said Andrew McLean, the company’s new CEO.
Griffith said the company was trying to be younger. “What you want to do as a retailer is make sure your customer base stays the same age or bring in younger people,” he said. Skewing didn’t work, he said.
But going the other way in age demographic did.
“When we’re looking for new customers, we really look at their buying habits and where they’re shopping,” says Griffith. “That’s why we expanded to Amazon and Kohl’s and Target. These new customers come in through these marketplaces.”
He said 75% of new customers who found the brand on third-party marketplaces “have never shopped at Lands’ End or they are old customers and haven’t shopped at Lands’ End in five years.”
“So we bring in a new customer who is basically the same customer, but 10 years younger. They’re Gen Xers,” he said, adding that Gen X shoppers showed the same long-standing loyalty to the brand as Baby Boomers.
Saunders said Gen X is a good match for Lands’ End “because their brand is much more aligned with that generation… It’s not the trendiest, but it’s not out of style either. And there are many practical, yet stylish pieces that are suited to the lifestyles that many Gen Xers now lead.”
“I’d be more concerned if Land’s End said it was reinventing itself as a younger brand than saying it’s focusing on what its core market should be,” said Saunders.