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MANAGING COSTS

Sales More Than Doubled Last Year

So Why Are They Changing Tactics?
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Building your marketing strategy around elaborate store-window displays may seem a bit dated in the online era. And pumping money into a catalog is only a little bit less retro. Yet this is the two-pronged strategy that Brooklyn Industries, a young, fast-growing clothing retailer, has decided to pursue in the coming year. Though the company's 2007 marketing budget represents roughly the same portion of revenue (2 percent) as the 2006 budget, its marketing plan has changed dramatically. Last year, the New York City-based business, which makes casual, youthful apparel, relied heavily on advertising in alternative magazines with names like BPM, Vice, and L to reach its target market. This year, even though Brooklyn Industries expects to grow from $10.1 million in revenue to more than $15 million, the company will spend far less on advertising.

The change in spending reflects new priorities. One of Brooklyn Industries' goals is to create a unified look for all of its marketing efforts. Another objective is to create marketing with a shelf life--materials that could be seen by more than one person and not just once but over the course of several days.

This new plan began to take shape last February, when the company's co-founders, Lexy Funk and Vahap Avsar, who are married, convened focus groups, conducted online surveys, and worked with M.B.A. students from Dartmouth and New York University to assess Brooklyn Industries' marketing. The studies gave them a better sense of how effective various tactics were in terms of attracting new business. Few of their customers, it turned out, read BPM. Many of them did read The New York Times and Esquire, but ads in those publications were way beyond the company's budget. Then there was this: Most customers reported that they were first drawn to Brooklyn Industries by spotting one of its eight stores in Brooklyn and Manhattan.

Based on this feedback, Funk and Avsar cut their ad spending from $80,000 to $40,000. The company is running ads only in Nylon magazine this year, and even sticking with Nylon was more of an emotional decision than a business one: Funk is a loyal suscriber. "We were shocked to see how little impact our ads had," says Avsar. "It was a painful decision, but we cut them off."

To attract more foot traffic to individual stores, the partners will devote $60,000 to sprucing up their window displays, up from about $12,000 last year. This line item includes the salary for a new hire who will be dedicated to this task; an existing staffer has also been assigned to window duty. The plan is to cycle through displays on a monthly basis, compared with 10 display changes in 2006. The company has budgeted between $600 and $1,200 per store window per month for 2007.

As is common in retail, Brooklyn Industries plans to install the most elaborate displays during the fourth quarter. Recently, for example, designers set wire sculptures in the shapes of birds, water towers, and hearts against a backdrop of dark, lush colors. Decals on the windows completed the display.

Brooklyn Industries' catalogs will incorporate the same visual motifs as the windows, and the company will publish them more frequently. In this regard, the business is not alone. Spending on catalog marketing is slated to grow by 5 percent this year, according to the Direct Marketing Association, in spite of the growth of e-mail and online marketing. Last year, Funk and Avsar created four catalogs averaging 48 pages, printing 22,000 each. This year, they will produce 30,000 copies of as many as five 64-page catalogs, which will be distributed by mail and at the retail stores. They are toying with printing on better paper and in a larger format.

Funk and Avsar don't expect the catalogs to produce a lot of sales. They simply hope that they will promote the Brooklyn Industries brand by claiming a place on customers' coffee tables. "Ads in magazines and newspapers not only are very expensive, but you have to deal with placement, and you only get one opportunity," says Funk. "But when you advertise through store windows and a catalog you can speak directly to the customer."




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