Upfront 2003: Apparel

War! What is it good for?" asks the classic anti-war anthem. Some retailers may well be asking the same question as they survey the landscape of an economy overshadowed by the Iraqi conflict, sagging consumer confidence and other concerns. "War, weather, worry and holiday shifts continue to play havoc on retail sales data," says Michael Niemira, lead consultant for ShopperTrak's National Retail Sales Estimate.In the first days of the Iraqi war in March, consumers were glued to their televisions. Many weren't exactly in the mood to shop, and retail business was threatened. Retailers and others scaled back on TV ads. A shorter-than-expected war and the Easter holiday brought shoppers back to the malls, however. Fast-forward, and industry watchers are anticipating solid upfront business from retail advertisers. "Major TV advertisers should return to a degree not unlike the past," predicts Bill McOwen, svp and managing director of broadcast for MPG Arnold. "We don't envision retail being that strong, but national branding should continue."Although his company foresees a high-single-digit decrease in retail advertising overall, national broadcast is expected to buck the trend. "TV is the first place they shore up, and co-op money should help," he explains.The hard-goods retail sector looks good, McOwen reports. Case in point: The Home Depot, which in February launched an estimated $350 million campaign around the theme "You can do it. We can help." Then, in April, the Big Lots chain went national with a $50 million campaign touting the fun of close-out shopping.Meanwhile, apparel retailers are less predictable. "It's a question of how much more they have to bring back," McOwen says. Last year, retailers brought more to the table than ever. Wal-Mart upped its advertising spend by some 31 percent over 2001, laying out $73 million last year, per CMR. Ditto for Target, which last year pumped up its media buy by a healthy 16.5 percent to $160 million. Another national retailer, Kohl's Department Stores, which spent about half the amount Target spent last year, increased its presence nonetheless by 9.2 percent. And this could be the year Kohl's goes national with TV ads. "It's just a hunch," McOwen says. "But they have grown their footprint, and national advertising may make sense for them."Especially since consumers are still spending—even in the face of economic and geopolitical worries. According to ShopperTrak's Niemira, "If you analyze the data and eliminate the noise, it becomes clear the war itself is having a relatively modest impact on the American consumer's spending habits." ShopperTrak, which measures retail-spending data week to week, reports that U.S. retail sales grew 6 percent the week ending April 5 versus the previous week, and soared 11 percent over the comparable period in 2002."Building sales is an important issue for department store retailers right now," adds Elaine Francolino, equity analyst at Moody's Investors Service. "But I'm not sure how that will play out in terms of their advertising spend."Especially during these times, retailers are seeking a closer connection to the consumer—and every player has employed, and stuck to, its own unique method for reaching out.Wal-Mart continues its low-price branding and message of giving back to the community, while Target continues to hype designer labels at a discount. Some retailer messages are getting cheerier—perhaps to combat images of war and feed consumer exuberance.Gap this spring launched a campaign for GapStretch pants for women, to the strains of "Feelin' Groovy." Even troubled Kmart, which expects to emerge from bankruptcy protection this month, offers upbeat Joe Boxer ads with the tag, "There's More To Life Than Underwear." —Sandra O'LoughlinPrime-time Network Spending in 2002: $286.2 million*Hot Buttons: National chains will put branding messages in high gear. Category: Apparel PERIOD: Jan 1, 2002 - Dec 31, 2002Advertiser: Prime-Time Network TV $$$Levi Strauss & Co.: $49.3 millionKmart Corp.: $20.3 millionNike Inc.: $15.6 millionSara Lee Corp.: $14.5 millionVF Corp.: $13.3 millionTop Programs for Apparel Advertising ExpendituresSuper Bowl XXXVI: $4.4 millionThe Simpsons: $3.0 millionEmmy Awards: $1.9 millionSource: Nielsen Monitor-Plus

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Upfront 2003: Apparel

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