As of this summer, fans of Kate Spade’s brand can dress their kids in Kate Spade tulle skirts, boil water in a Kate Spade tea kettle, adorn their desk with a gold Kate Spade stapler, serve dinner on a Kate Spade platter, and curl up in a Kate Spade duvet cover in a Kate Spade pajama set.
The 20-year-old handbag label has gone full lifestyle.
While bags and accessories still amount to 70 percent of all Kate Spade New York purchases, the company now spans four categories: women’s, men’s (under the moniker Jack Spade), and kid’s clothing and accessories, and home decor. Under those main categories, the company has launched dozens of new products, including athletic wear (naturally), luggage, kitchen ware, bathing suits, chandeliers, sofas and pillows.
“You can’t look at an apparel line and make it into a line of furniture,” said Mary Renner Beech, CMO of Kate Spade New York since 2013. “But we know which elements our customers are attracted to: a bow, stripes, a certain color, a certain fabric. We aim so that if you covered the label on one of our products, our customer would still know it was us.”
Kate Spade products introduced in the past year.
In the process of the category expansion, Kate Spade New York is hoping to lure in a new customer — one who’s outside of the core city-dwelling older millennial women demographic, and not as familiar with the brand’s signature bows and stripes. At the same time, it hopes to infiltrate the current customers’ lives with more Kate Spade products.
It’s not a novel strategy. But in the past several years, other accessible luxury brands on the same tier as Kate Spade — like Calvin Klein, Tommy Hilfiger and Ralph Lauren — have consolidated their categories to put more focus on core products. After its brand diminished, Coach recently emphasized a renewed attention to leather goods, which it was once known for.
According to Market Realist analyst Sonya Bells, if Kate Spade strays too far from its handbags and accessories, it could risk alienating its existing customer while failing to wow new ones. But so far this hasn’t come to pass: In 2015, Kate Spade New York launched 14 new products; of the customers who bought those products, about 40 percent were first-time customers of the brand. The company’s overall sales in 2015 increased by 9 percent to $1.2 billion.
According to Renner Beech, the company has chosen its new categories by paying attention to the existing customers’ behavior to see what she was searching for and not finding. One of the most-searched terms on the Kate Spade website, she said, was “luggage,” before the brand actually offered any.
“We like to say we’re data-informed marketers, not data-led or data-driven, but data lets us make the best decisions on behalf of the customer. The more we learn about her the better we can do,” she said.
That puts Kate Spade in a better position to keep engaging online customers, which account for 20 percent of the brand’s sales. While many fashion marketers face issues when it comes to interpreting data, Renner Beech said her team’s data practices include tracking search data, transactional histories and frequently prompting customers for feedback after they’ve made a purchase. The marketing team is not separated from the tech team, and the company also works with the third-party service Medallia to help interpret customer data.
After determining whether the customer wants a new product, the next step, said Renner Beech, is to pinpoint what Kate Spade’s point of view on a new product is. For a tea kettle, that’s the “Deco Dot,” a white kettle with gold polka dots and “Whistle While You Work” stenciled in small letters on the mouth, which she called the “quintessential” Kate Spade home product. Sometimes, though, the brand realizes it doesn’t have enough to say at the time to infiltrate an entire category. Without much idea of what a full Kate Spade lingerie line would look like, the brand decided to keep its offering in the category to robes and sleepwear.
What ties all the product categories into a cohesive brand, according to Bells, is the Kate Spade brand voice. With one designer, Deborah Lloyd, in charge of each category, the brand is recognizable whether it’s selling flats, clutches or tea kettles. Calvin Klein recently moved to that strategy to reunite its category divisions under one designer, Raf Simons. That cohesion, for Kate Spade New York, will also help the brand as it looks to increase international sales, currently just under 15 percent of the brand’s total sales.
“We have this clear, articulate brand voice whether you’re finding us on Pinterest, e-mail, e-commerce, Snapchat or Instagram,” said Renner Beech. “[Lloyd and myself], we aren’t the people we’re designing for or doing marketing for. It’s the customer.”
You can hear Kate Spade New York CMO Mary Renner Beech speak at the Glossy Forum on October 20.
