The Strategy Of Calvin Klein After Raf Simons Era

Calvin Klein knows how to create controversial advertising blockbusters, and the first advertisement in the post Raf Simons era brought the brand into a whole new field.

In the advertising video released last week, model Bella Hadid and computer generated red Lil Miquela were kissing together.

Netizens' comments on this video have become polarizing instantly, and some viewers on Youtube have described it as modern and cool, while other viewers call it queerbaiting. This term is used to describe vague contents or marketing methods for homosexual relations.

So far, it has become the most clicked video with the first release advertisements starring Shawn Mendes and Billie Eilish.

Calvin Klein's marketing team is closely watching the public's response to this blockbuster.

The social media blockbuster is the first step in the brand's comprehensive restart plan aimed at building a new brand image and trying to reverse the recent decline in sales.

The original chief creative director, Raf Simons, left abruptly after two years of expending, which changed the direction of the brand's creativity.

The brand wanted to enhance its positioning on the basis of the positioning of the mass market, but this investment did not bring rewards to Calvin Klein's parent company PVH.

Calvin Klein ended its employment relationship with Simons last year due to disappointing sales and closed the show.

In an exclusive interview, Marie Gulin-Merle, chief marketing officer of Calvin Klein, outlined the brand new strategy to create a high heat "halo effect" to promote underwear and jeans sales, and there will be no participation of star designers.

In an internal memorandum shared with BoF in May 17th, Gulin-Merle announced the establishment of a marketing team called InCKubator, which will tailor four to six sales proposals for specific types of consumers each year.

The team in New York headquarters is mainly composed of young employees and is led by Greg Baglione, senior director of global strategy and business development.

The team will "have the freedom to challenge the status quo, to consider and propose new ideas."

Gulin-Merle said, "they know what the older generation executives don't know."

The InCKubator project will include clothing production, sales space and experience creation, content management and cooperation with the technology platform.

Each project will be different, usually involving cooperation with the outside of the company, while most (but not all) projects will produce garments within a certain range of pricing.

These garments will be launched in the form of Calvin Klein's new series, which will be released in September.

A similar method works for Moncler.

Moncler launched a Genius strategy last year, including a limited edition collaboration of nearly twelve designers.

The brand's sales increased 19% in 2018 to 1 billion 620 million US dollars.

Other brands are also experimenting with new business models, including Tod 's's "T factory plan".

The rapid replacement of all kinds of creative projects is more suitable for the fast pace of social media. Compared with the traditional seasonal marketing method in fashion, this can better satisfy the younger generation's desire for new content.

Multiple external partners will be able to interact with a wider range of consumer groups.

At the same time, these capsule projects will take into account the more daring design, but do not need to take the risk of changing the brand.

The marketing method of Calvin Klein is relatively flexible compared with the commonly used "capsule" strategy in the market.

"We do not have a preset or pre prepared recipe," Gulin-Merle added. With customer feedback, the project will gradually develop.

"We don't want to dream up new strategies in the executive's office," she said.

"I think the brand will be at its best when it can relate to culture, and one of the functions of InCKubator is to connect with different communities and cultures. This is not just about the culture of generalities, or what we imagine in 205 West 39th Street (205 floor of West 39 Street)."

This address is the headquarters of the brand in Manhattan. At the same time, it is also the name of the exquisite walking series introduced by Simons when it joined the brand in 2016.

Although the series has been highly praised and developed a parallel and dramatic fashion advertising blockbuster, it has not been successfully pformed into a strong sales capability, nor is it enough to enhance the revenue of the PVH market at the core of the mass market.

In November 2018, due to weak sales of Calvin Klein, PVH's earnings were lower than analysts' expectations for the first time in two years.

The company reported that expenses increased by $10 million due to creative and marketing expenses and discounts for jeans, and the brand's pre tax profit declined in the quarter.

Less than a month later, Calvin Klein announced the news of Simons's departure.

In the new year, the brand began to dismantle Simons's Calvin Klein 205W39NYC, which was struggling to turn off the flagship store of Madison Avenue, which was redecorated in 2017, to dismiss some of its team, close the studio in Milan, and end its luxury line business, and will temporarily leave the show.

The burden now lies on the new strategy that Gulin-Merle has taken to resonate with customers.

PVH expects that the annual retail revenue of Calvin Klein will reach $12 billion in the next few years, up from $9 billion 800 million in 2018.

Last year, the brand's revenue increased by 8%.

Calvin Klein is still looking for a new chief designer who will not be as high-profile as Simons and will not be responsible for the same business scope.

The new chief designer will report to Calvin Klein's chief executive, Steven Shiffman, while InCKubator already has its own design team.

Gulin-Merle points out that the DNA of Calvin Klein will be consistent with the history of the brand. It focuses on self expression, identity, provocation and pursuit of sexy.

Now, the way in which brand creates purchasing power needs to be changed.

"In the past, we were doing routine work: running a show, releasing a fashion series, and launching some essential items," she said.

"I am not saying that all this will disappear, but I think the new world we are in has provided a brand new choice for the brand."

As she describes, the traditional strategy aims at building a brand vision and launching products around it, pricing and spreading it, which is a one-way dialogue from brand to consumer.

She said that InCKbator broke the traditional thinking of this strategy from the perspective of consumer groups.

Brand marketing will continue to be digitalized (Gulin-Merle was named the first chief digital officer of PVH earlier this month) and relied heavily on the video image mode: the brand stopped advertising in print magazines in spring 2019.

Gulin-Merle is cutting down Calvin Klein's business dealings with all advertising and media agents, and establishing an internal marketing team to take care of the relationship between brands and consumers - from store design to Instagram post.

She has been recruiting data scientists and analysts.

Calvin Klein has also established a partnership with Google (Google) to develop its marketing technology.

Gulin-Merle, the chief digital officer of PVH, is responsible for bringing her practices in Calvin Klein to other departments of the company, including sharing consumer insights and data across brands, and building a more powerful system to bridge business and business entities.

PVH's brands include Tommy Hilfiger, Van Heusen and IZOD.

Among them, the annual retail revenue of Tommy Hilfiger in 2018 reached US $8 billion 500 million.

Gulin-Merle's team will be more cross functional and more communicative.

She and General Assembly have launched the Upskilling training program, which will expand to other brands of PVH.

She served as chief marketing officer at L'OREAL L Or al USA for four years and left in February 2018.

At that time, she had joined hands with the technology training organization to launch similar projects in the company.

"We used to live in a world that relies on intermediaries to give us feedback," she said.

"There are many things that can only go straight ahead, but now there are a lot of new possibilities.

It also means changes: new thinking patterns, new organizational structures, new skills and new ways of working.

She thinks InCKubator of Calvin Klein is part of this new thinking pattern.

It is too early to tell whether it can create halo effect to maintain brand growth, but Gulin-Merle believes that her team can integrate data and intuition perfectly.

"The old strategic approach must be rebuilt," she said.

"We don't want any old formula."