Calvin Klein’s Approach-Avoidance E-Commerce Challenge

Written by Evan Schuman
April 5th, 2009

When Calvin Klein brands, the diversified apparel line that sold almost $6 billion worth of clothing last year for parent company Phillips-Van Heusen, launched its first E-Commerce site six months ago, it had to deal with the same channel conflict issues for any business so dependent on its retail distributors. But instead of seeing a lot of sales shift from in-store to online, it found an increase in revenue as younger consumers embraced the brand online.

“Our sense is that this (Web) consumer skews a little younger than the department store channel,” said Tom Murry, president/CEO of Calvin Klein Inc.. “We don’t sell against the department store channel. We saw more than $2.5 million of sales in the first five months.”

Given its strong focus on younger consumers, Calvin Klein started an E-Commerce operation much later than many had expected, waiting for about 15 years after the Web launched to unveil its own E-Commerce site. (For the Web history buffs out there, we are assuming 1993 as the practical launch of the web as that is roughly when NCSA Mosaic unveiled the first graphical browser, although Tim Berners-Lee technically finished the concept details in 1989 and deployed the first working system about 1990. And, yes, Calvin Klein had a Web site much earlier, but it didn’t sell anything on it until last year.)

Murry’s comments paint an almost picture-perfect E-Commerce launch strategy, one that avoided channel conflict, delivered new revenue, helped boost in-store retail sales (by pitching them as the place to try the clothes on) and was able to pull in younger consumers, which is essential for any long-time brand that needs to be seen as popular and cool among young shoppers.

“We first had to deal with the question: ‘Is this going to make our brand stronger?'” Murry said. “It’s really great advertising. It helps bring consumers to the Calvin Klein lifestyle. There is some underground exposure that we get out of it.”

For a company that took this long to do E-Commerce, Calvin Klein does seem to be in any hurry to pursue other new media opportunities, even if they are the current rage with the younger demographic. That means that mobile and social networking are off the priority lists.

Mobile “hasn’t been much of a concern. We’re going to sit back and see how that develops,” Murry said, adding that social sites are also “not really on our agenda at this time.”


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