Old Navy, the clothing retailer being spun off from The Gap as a separate company, is re-evaluating its marketing approach, having concluded that a focus on price is counter-productive.

“We had frankly become too heavily dependent on messaging around discounting, as opposed to bigger picture brand messaging focus on product and value that we know resonates with the Old Navy consumer,” CFO Teri List-Stoll said in an earnings call.

“For Q4, we recalibrated our messaging to focus on product stories, highlighting some of our big design ideas for holiday…combined with compelling price points and commercial plans.”

Read more on the pivot back to brand in WARC’s Marketer’s Toolkit 2020, available here.

The brand has experienced what List-Stoll referred to as “product acceptance challenges” which are being addressed. “We have an opportunity to better execute on Old Navy’s unique value equation and positioning, with style, fit, quality and price, all working in balance,” she stated.

And, she added, “we have identified opportunities for better execution, particularly in the areas of marketing and merchandising.”

The brand’s latest holiday TV campaign, for example, which features actor Neil Patrick Harris, has seen positive early test results. At the same time, it has increased marketing investment in partnerships, with Old Navy the exclusive retail partner for Klaus, Netflix’s first-ever animated family holiday movie.

List-Stoll also reaffirmed the decision to pull Old Navy out of China – the investment required would be better directed at “the proven growth opportunity” in the North American market.

“We’re holding our market share of 3%, meaning we have tremendous opportunity for growth to category focus and expansion, giving customers more access, acquiring new customers to personalization and loyalty and driving online growth,” she said. 

Sourced from Seeking Alpha; additional content by WARC staff