Building on brands

Discount Store News, Dec 8, 1997

Meaningful brands have done more for the credibility of mass market apparel departments than any other marketing or merchandising tool. Over the years, productive partnerships between manufacturers and retailers have helped turn haphazard assortments into clean, well-defined presentations.

A peek at discounters' most wanted lists will find brands at the top.

In retail, there is nothing that fuels sales more than quality branded merchandise. And over the years, discounters have devoted much of their growing resources to getting branded merchandise into their stores. For mass merchants, branded apparel has traditionally been the equivalent of the Holy Grail - elusive, yet precious because of its ability to draw consumers.

In fact, the ability to maintain branded apparel positions has been instrumental in making discount clothing departments viable to their customers.

Over the years, lucrative merchandising partnerships with large branded manufacturers have helped transform mass market selling floors from inconsistent jumbles into, at best, crisp, well-organized, category-specific presentations.

Combined with their own increased ability to create meaningful private labels, discounters are now heading towards assortments that, in the eyes of their customers, are increasingly destination-oriented.

Susan Salizar, a customer at Kmart's 34th Street unit in New York, is sorting through a rack of brightly colored tops in the women's department. She pauses suddenly, eyeballing a cherry red knit, feels the material, glances at the label and then up at the image of Kathy Ireland's perfectly framed face on the nearby signs.

'I don't think she'd wear this on the cover of Sports Illustrated,' the petite, 20-something jokes. Salizar then quickly nods in the direction of the supermodel's toothy grin. 'But I like how (Kmart) ties the look of the clothes into her image. Overall, it's a pretty cool brand.'

Kathy Ireland a brand? Obviously Kmart is doing something right.

'Of course' says retail analyst Kurt Barnard. 'Wasn't that the whole point in the first place? A private brand that has gained that kind of identification is what allows a retailer to stand out from the rest of the crowd. Because, if a brand - private or otherwise - fits a consumer right, they're going to come back to that store for more.'

Not only do brands - proprietary or national - mean business for discounters, but their strong and very necessary presence on racks in stores ranging from Ames to Zeller's marks a major milestone in the continuing development of the mass market, giving them much needed validity as purveyors of apparel.

'Brand names are providing the value of recognition,' says Ray Graj, a principal in the New York-based image and design concept firm Graj Gustavsen. 'All this, along with the added value of design sensibility, is what is going into what has otherwise been an arena that's always been dominated by price.'

Pretty heady stuff for an industry that once took a catch-as-catch-can, opportunistic approach to branding.

During the industry's infancy, apparel manufacturers didn't target discounters for distribution of their products, and private labels were for margin building. In many cases, brands were only attainable in the mass market through diverters or other middlemen.

Now, of course, the apparel world has done a 180-degree turn. Enormous apparel companies, as well as entrepreneurs, count discount stores as primary customers. Due in large part to partnerships with these companies, mass merchants have been able to create an atmosphere of branded continuity that at best stimulates repeat purchasing from consumers who have come to expect the presence of certain labels (in the desired color, size and silhouette) in their store.

The value of national brands to shoppers not only builds a following for a given label but lends credibility to discount apparel departments. This in turn has laid the groundwork for retailers' own private label efforts.

The current scenario is a far cry from the discount bargain racks of the 1960s and 1970s that were filled with merchandise often acquired through unconventional methods.

'In the old days, let's just say that discounters were buyers of Levi's jeans, for example, from people that accumulated Levi's jeans for them,' explains George Needleman, senior vice president of Kikomo Ltd. Needleman speaks with the voice of authority. Years ago, he served as a soft lines buyer for the once dominant E. J. Korvette before spending 18 years as a merchant at Venture Stores.

'The perspective that we wanted to pursue back then was to give our customers credible value,' he says. 'We'd find Izod 'shirts that were selling in the $14 to $15 range at A&S and Macy's, and our objective was to sell them at prices considerably less than the department stores.' This way of purchasing and selling, not to mention the idea of 'credible value,' still exists at discount stores and certainly at many off-pricers, but with the booming growth of the discount industry during the last three decades, the need for a more systematic and more dependable method of apparel merchandising and marketing became obvious.