Lord & Taylor may have been the go-to store for fashion-forward luxury business clothes a couple of decades ago, but the venerable retailer has been relying too heavily on its name instead of marketing to the newest generation of consumers. In an effort to grab a larger share of the luxury market sales, Lord & Taylor is scouting out a new store in Westchester County, N.Y., home to its second-best performing store, but some critics say that expansion might not be the best marketing solution.
Location expansion will coincide with a marketing plan to promote brand awareness, but Lord & Taylor's marketing efforts are aimed at professional women aged 35-55, ignoring the potentially lucrative Generation Y demographic that not only spends more money on luxury items, according to a consumer marketing study conducted by Packaged Facts, but influences older shoppers.
While L&T maintains the obligatory Facebook page and Twitter account, the retailer has yet to fully embrace social media to brand the store as a hip company and does not offer as many discounts as its competitors to lure bargaining-hunting shoppers. The success of online luxury bargain sites like Gilt Groupe and Rue La La foster the notion that luxury retail items can be purchased at a discount. "People were willing to pay a premium price for the fit and the fabric," said 26-year-old Margaret Chaffee, a marketing consultant based in Los Angeles. "But now you don't need to pay a premium price to get that."
Lord & Taylor's main competitor, Nordstrom, remains relevant by maintaining a strong focus on customer satisfaction. "I think [Nordstrom's] in-store experience is second to none," said Ted Hurlbut, Principle Retail Consultant at Hurlbut & Associates. "Unlike most of their competition, they have never lapsed into thinking that their in-store associates are a cost center" and maintain a customer-oriented team of sales associates.
The recession has forced retailers to reevaluate their strategy in order to adjust to the changing economic environment, and Lord & Taylor is struggling to find its niche, especially in regard to young trendsetters. "For the last 12 years, they have been caught between the department segment and the luxury segment," said Hurlbut. "Younger demographics are simply not turning to them as a first choice destination."
With a business model based narrow margins and selling in large volumes, Lord & Taylor is dependent on maintaining a wide customer base, and that means attracting younger shoppers. "I think Macy's is going more toward Nordstrom in style, and Lord & Taylor is going more toward Kohl's," said Shannon Radecki, a 28-year-old working in PR. "They look more dated than other stores, and they don't seem to be concerned with their image. [The stores] just look cheap."
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