Old Navy is confident it has overcome pandemic-related hurdles for strong holiday sales.
Nancy Green, Old Navy’s president and CEO, said prepping the company for the holiday shopping season included providing ample shopping options for the customer and ensuring operational agility to meet demand at every fulfillment channel.
“It’s all about what our customers want and when they want it, depending on their own desire for safety, for convenience, for ease,” said Green. “Our omni-channel capabilities are a huge advantage to us, because not all retailers have them.”
Old Navy, which operates more than 1,200 global stores globally, has been making adjustments since March to answer government restrictions, consumer priorities and the overall acceleration of online shopping. In the third quarter, according to earnings released on November 24, Gap Inc. saw a 61% increase in online sales across its brands. And on Thanksgiving weekend, when Old Navy was offering 50% off, 31% of its online customers were new visitors to the site. From Black Friday to Cyber Monday, 45% of Gap inc.’s customers chose to get their buy-online, pick-up in-store orders via a curbside option released in August.
“Our online sales growth in the fourth quarter is going to be in the very, very high double digits, as we’ve been seeing all year,” said Green. “And as stores have reopened, we’re not seeing any deceleration in our online business.”
This year, Old Navy’s holiday marketing campaign, which kicked off in the first week of November, is more digital-focused than in years past, though the company has been “moving in that direction for a while,” said Green. It will center on Hulu and other connected TV platforms, as well as social channels including Facebook, Instagram and TikTok. The company took a “fun” and “zany” approach, as people “need that lift right now,” said Green. It enlisted RuPaul to be featured in its ads across channels. Weekly Instagram livestreams, with a theme of “RuPaulidays,” show the star attempting twists on traditional holiday traditions: In an episode focused on cookie decorating, snowmen cookies are turned into “snowqueens” via makeup and added sparkle.
“We think there’s great opportunity for [livestreaming] in the future,” said Green.
Old Navy is sitting relatively pretty. Thanks, in large part, to specializing in many of the year’s hot apparel categories, it’s coming off a strong third quarter: Its net sales increased 15%, and comparable sales saw a 17% bump. Its activewear sales grew 55% year-over-year, and it became the No. 1 kids and baby retailer, based on market share. On Thanksgiving weekend, its top sellers included performance fleece styles and printed flannel pajamas for the family.
On a call with Glossy, Green broke down the company’s holiday strategy, including how it prepared its website for unprecedented traffic and how it aimed to differentiate its marketing for the promotions-flooded season. Green’s answers have been lightly edited for clarity.
How did you prepare your e-commerce site for the holiday rush?
Marketing our convenience options on the site was really important, so in September, we tested significant levels of demand; we put our site through a load testing, to make sure that our site and service could remain strong and stable for our customers at extreme load demand.
What about stores?
We’re just making it really easy for the customer to see what they want and shop in an experience that is really well organized and inspirational. They can go through, grab and go.
We launched convenience spots at the front of all our stores. A customer can come in and, really quickly, either pick up a BOPIS order, or they can make a return and see that credit instantly. That’s important because it separates line management — we always want to make sure that we can get people through the cash register lines efficiently and productively. Also, when you walk into our store, you’ll now see that we’re, very dominantly, leading with these categories that are highly relevant. About 70-80% of our customers browse online first, and we’re seeing that [store] visits are consolidating but people are spending more when they go in.
What products are you betting on this year?
We’ve been seeing a very strong acceleration into comfort and cozy [wear] — it was happening prior to Covid, and Covid just accelerated that. There’s a strong demand for versatile activewear, including fleece, as well as sleepwear and looser-fit denim. As the weather gets cooler, we’ll be seeing more demand for coats. Especially in a world that feels so uncertain, people want to feel cozy; it creates more psychological safety. And masks are a huge new category that we got into. Early [in the pandemic], we pivoted our supply chain capabilities to be able to produce masks.
What are you doing to stand out in a promotions-heavy time?
We’re really proud of what we’re doing in support of a program that we run through our stores and community partners called This Way Onward — it’s a job training program for underserved youth. Starting on Giving Tuesday, we donated $10 for every BOPIS and curbside order until we reached $1 million. People want to want to be part of brands that care and do important work that impacts society positively. We are, and this is who we are as a brand.