Brand Innovators: Tommy Hilfiger

How Tommy Hilfiger taps pop culture to build his firecracker brand. In 1994, urban artist Snoop Doggy Dogg appeared on Saturday Night Live wearing a red, white and blue Tommy Hilfiger rugby shirt. A rap performer who had tangled with the law wearing an oversized preppy shirt on TV? The same style squeaky-clean kids in the heartland had sported for years? Indeed. It was all part of fashion maverick Tommy Hilfiger's carefully scripted plan to expand his brand's reach--and it worked. Snoop's sartorial splendor sent a message to young men across America and helped Hilfiger's sportswear score instant street credibility. The proof is in the bottom line: In the four years after Snoop Doggy Dogg's appearance, sales jumped almost fourfold to nearly $900 million and have continued to soar. Years later, major fashion brands are still trying to catch up. Hilfiger's genius was using rappers, who weren't even a blip on the radar screen of conventional marketers then. Why target the music industry? It was a natural move for the self-taught designer. After all, his brothers--including former Blue Oyster Cult guitarist Andy Hilfiger--were well connected in the business. Tommy figured an inexpensive but effective way to promote his brand would be to give clothes to hip young musicians who were hungry for the attention. "I've always admired their innovative, creative sense," he says. Ever the visionary, Hilfiger realized the clothes of urban artists would become the symbol of a new generation. By aligning his fashions with pop culture, especially the hip-hop scene, Hilfiger established a youthful, upbeat lifestyle brand with remarkable growing power. "In addition to fashion, our customers love film, music, art, theater, sports and technology," says Hilfiger. "It makes sense for us to touch their lives directly." In fact, Hilfiger was one of the first apparel companies to incorporate its logo--a red, white and blue flag emblem taken from the yachting symbol for "H"--into its product design and the framework of its ads. The logo-as-art approach prevents a generic look and hammers home the brand's identity. As such, Hilfiger has carved out a position distinct from major rivals Ralph Lauren--known for his clubby, Old World sensibility--and Calvin Klein, who likes to push sexual buttons. The brand equity of the Hilfiger name has outpaced all designer clothing labels. Hilfiger was ranked the top clothing brand in a 1998 "Brandz" consumer survey by WPP Group's Millward Brown. Among teens and young adults, Hilfiger was far ahead of No. 2 Gap and No. 3 Nike. "This is a well-known aspirational brand which elicits strong levels of bonding," says Brandz consultant Maria Villanueva. The study shows Hilfiger has the potential to gain more market share and is not vulnerable to encroachment from rivals. With its well-known flag iconography, regatta colors and oversized signature, the 15-year-old Hilfiger brand has transcended its roots. It's expanded from its original market of men's polo shirts and jeans to boys' wear, men's tailored sportswear, women's jeans and casual clothes, children's clothes, fragrances, fashion accessories and home accessories. Teenage boys and girls, often the children of celebrities, clamor to be walking billboards for products that bear the company's trademark. Now the brand is taking on tougher challenges--career and dress-up apparel for women 21-30--winning over disbelievers with each quarterly report. From 1990-94, the company's sales leaped from $25 million to $227 million; by 1998, sales had jumped to $847 million. In the mid-1990s, when the menswear market limped along at 3 percent gains, Hilfiger's men's line saw a 25 percent to 28 percent sales hike. Today, fast-growing women's wear and jeans are picking up any slowdown in men's clothes. For fiscal 1999, Hilfiger sales increased a solid 47.5 percent to $1.25 billion, not including acquisitions. Sales for the year, ending March 31 and including acquired companies, hit $1.64 billion. As befits his product, the No. 1 asset of the Hilfiger brand is Hilfiger himself. The founder, principal designer and honorary chairman of the Hong Kong-based company is down-to-earth and charming. With a wide toothy grin, Hilfiger, 46, is a self-described "all-American type person with the right charisma." He usually draws autograph-seeking crowds at retail events, fundraisers and star-studded parties. He's just as comfortable chatting with suburban teens in a Midwest shopping mall as he is hanging with rock stars. "Tommy was the kid with his shirt sticking out of his pants," says Michael Toth, principal of former Hilfiger agency Toth Brand Imaging in Concord, Mass., who worked closely with Hilfiger for years. "He's from a family with nine kids who lived on the wrong side of the tracks." The boy from Elmira, N.Y., who went to work at an early age, seems free of artistic pretensions. "The first time I met him he had a book about Norman Rockwell on his desk," remembers Toth. Given his background, it's no surprise that Hilfiger thinks fashion is too serious and too stifling. Our brand "is all about having fun with your clothing, not taking yourself too seriously," says Hilfiger. "People today are not so literal with their sense of style--they like to mix things up." From the start, Hilfiger had a different way of looking at fashion, says Landor Associates brand consultant Courtney Reeser who worked with the company when it launched. "He brought energy when others were restrained and sophisticated," he says. "He took familiar styles and added his own personality." For instance, Hilfiger's fashions include little surprises: a buttonhole stitched in a contrasting color; striping that unexpectedly peeks out from inside the garment. His fashions poke fun at the uptight, elitist preppy look. Kids get the joke, says Toth. Other apparel lifestyle brands win young consumers with their edginess, parodies or sex play; the Hilfiger brand projects a sense of innocence and fun while maintaining its hip reputation. Some marketers joke that it's a parent's dream: a clean-cut image with enough street appeal to be cool. "The brand vision is to represent the best of America's hopes and possibilities, [to imagine] what could be," says Toth. By openly accepting people of different races, backgrounds and lifestyles within its wholesome universe, the brand "is living the dream" of diversity. Just what its maker wanted. "I like things to be diverse All the different types of people give American life its incredible vibrancy," wrote Hilfiger in his 1997 book All-American. His inclusive philosophy helped propel the brand to the top of the charts--so did his uncanny ability to take the pulse of consumers and deliver the products they want. "Tommy has an instinct for knowing exactly what's right on the product front," says Peter Connolly, executive vice president of global marketing. "The product designs and quality are so great that we could forget marketing and stop advertising tomorrow and we'd still do a good business because it's a great product." Hilfiger is obsessive in his search for new product ideas and consumer feedback. When he calls Connolly at home and his 12-year-old son answers the phone, Hilfiger peppers him with questions. The designer regularly visits New York streets to see what teens are wearing. When he gets his car out of a Manhattan garage, he asks the young parking attendant what he thinks of the latest fads. "Tommy is close to the consumer like no one else," says Connolly. So it's no surprise that his insights, personality and point of view are incorporated into the company's ad efforts. Hilfiger has kept ad budgets modest and imagery straightforward and consistent, if somewhat predictable. Rather than set the company agenda, the ad efforts execute the brand's existing identity. And although the Hilfiger brand is enticing, the ad account can be challenging. Agencies play second fiddle to the star power of the designer, the celebrity-driven marketing and the entertainment alliances that fuel the brand identity. Despite the company's size, Hilfiger presides over almost all creative presentations himself. A year after the company was launched in 1984, for example, Hilfiger unveiled a cocky campaign that gave the initials of "The 4 Great American Designers for Men," including the then-unknown Hilfiger. Developed by ad veteran George Lois, the ads became better known than the designer's clothes. During most of the '90s, however, Hilfiger worked closely with Toth, whose small shop grew to about 65 employees with the apparel brand. In 1992, the ad budget was a mere $1.5 million: It swelled to $30 million five years later. The two men shared a close relationship and a brand vision, despite Hilfiger's reputation as a tough, micromanaging client who can take forever to make simple ad decisions. Toth quickly became part of the company's inner circle, intimately involved in all kinds of marketing decisions, from crafting the brand identity to in-store displays. "To build the brand, we had to be consistent in every form of marketing," says Toth. "The ads were half of it. The other half was creating the [Hilfiger] experience with the consumer." Beautifully photographed ads were often filled with a cultural mix of teens romping together in outdoor settings. The logo design frequently formed a frame around the image. One memorable 1997 spot for the Athletics line showed actors playing soccer on a muddy field. Covered in mud, it's hard to tell who is a boy or girl, who is black or white. The egalitarian message was almost as striking as a designer showing his new clothing line caked in dirt. But as the company grew, it became difficult for Toth to keep up with the work, say sources. When Connolly left Polo Ralph Lauren to become senior vice president of global marketing at Hilfiger in spring 1997, he quickly handed Deutsch, New York, a Super Bowl creative assignment. Connolly, who had done marketing stints at CNBC and furniture chain Ikea, subsequently threw the account in review. (PGR Media in Providence, R.I., continues to handle media chores.) Arnell Group Brand Consulting in New York, led by fashion photographer and director Peter Arnell, won the business in February 1998. With former clients such as Fila, Donna Karan and Banana Republic, Arnell has the credentials to guide the client into the older, more sophisticated women's fashion market. Much like its union with Snoop Doggy Dogg, the company is focusing even harder on its marketing alliances with sports, music and entertainment as "a way to capture consumers' dreams and aspirations," says Arnell. Hence, Arnell's fall 1998 TV and print campaign featured the designer's new jeans worn by the cast of teen horror flick The Faculty. Critics say Arnell's work sometimes seems contrived and awkward. Arnell says anytime a company goes through a transition in its imagery, new work is bound to seem "unusual" to outsiders. In May, Kirshenbaum Bond & Partners was added to Hilfiger's roster, but Arnell remains the lead agency. KB&P, New York, handles a $25-30 million slice of what will be a $70 million account this year. Under its purview is the Tommy Jeans, children's clothes, home accessories, sleepwear, underwear and golfwear lines. Connolly knew the full-service shop from his days at CNBC in 1996, when the agency handled a branding assignment. "[The company] wants an ad agency; we want to develop people's businesses," says Arnell of the shift. Hilfiger, meanwhile, has declared 1999 the "year of music" for his company. The number of music-related projects, including concert tours and exclusive music-sponsored events, has increased and more music imagery has been added to corporate ads. The women's lines tap into the mass market via the pop music scene. The most ambitious project is the company's sponsorship of one of rock 'n' roll's biggest brands, the Rolling Stones, on the band's No Security Tour '99. Ads from Arnell touting the client's sponsorship of the tour feature young women--including Rebecca Romijn-Stamos--in Hilfiger fashions, concert scenes and a special logo that combines Hilfiger's flag with the Rolling Stones' signature tongue. Like most of Hilfiger's alliances, the Stones' link stems from his personal relationship with several of the band's members. Another promotion of the women's line came when Hilfiger designed the clothes for his friend Sheryl Crow's recent tour. "The new women's lines are doing well because he is bringing the same brand insights to bear that have worked with men and teens," says Faye Landes, a New York-based analyst who has tracked Hilfiger for five years. And there are no signs that the brand has reached its peak. Tommy Hilfiger measures high on the list of brands with unrealized potential, says Belle Frank, group director of corporate research for Young & Rubicam Inc. Most people under 35 know and understand the essence of the brand, she says. "Expanding from young to older consumers and from men's apparel into girls' and women's have been the right decisions" to increase the brand's presence, Frank says. But the secret to Hilfiger's success, says Connolly, is "our name and our youthful attitude." Gen Y likes the diversity the brand represents, Gen X likes the rejection of the status quo and Boomers like the brand's redefinition of the aging process, he explains. Can the brand get too big? "We don't have to worry about how big it is but how we expose it." Of course, sustaining any hot brand requires certain components, says Toth: "A consistent program, a commitment to live the brand, a unique consumer experience and a lot of luck. [Hilfiger] has all those things in spades, including the luck."

Brand Marketing

Brand Innovators: Tommy Hilfiger

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Joan Voight