Since Benetton's heyday in the 80s and 90s, when the clothing brand became synonymous with its shock advertising, its fortunes have entered a decline. This culminated in the brand reporting a 12% drop in its share price last week, on the back of a warning that sales and profits would also fall this year.
At its high point, Benetton became inextricably linked with ads featuring disturbing images, taken by photographer Oliviero Toscani. Beginning his association with the brand in 1982, he was responsible for the Italian fashion label's infamous executions featuring a human heart, an AIDS patient and the bloody uniform of a dead soldier, driving an approach that cemented its distinctive positioning.
Toscani continued to push the boundaries of good taste, until an ad depicting a man on death row proved the final straw for many consumers and retailers, leading to the photographer quitting as creative director in 2000. This ad so incensed US retailer Sears Roebuck & Co, that it refused to stock Benetton clothes in 400 stores.
Since then, Benetton has shifted its advertising strategy, with the introduction of a more sedate style, under the art direction of Joel Berg. It has also moved creativity to Fabrica, its in-house communications research centre.
Benetton's advertising used to convey the idea that buying one of its garments would contribute to racial understanding and the welfare of humanity.
That edge appears to have been lost, with its recent ads appearing closer to a Gap-style positioning. A return to the use of shock advertising seems unlikely. Since 9/11, the public has become less inclined to tolerate shocking images and shock tactics are no longer so unusual, with other brands, such as FCUK, having taken up the mantle.
So where does Benetton turn now? We asked Jason Read creative director of men's retail at Loewy, and Justin Cheatle, managing director of the John Cheatle Group, a clothing retailer, how Benetton might be able to turn itself around.
DIAGNOSIS 1 - JASON READ CREATIVE DIRECTOR, MEN'S RETAIL, LOEWY
Even chavs don't wear Benetton. The problem is that it tipped the tipping point of hyper profile and fell off the end of the see-saw into oblivion.
Popularity bred an internationalism that put Benetton next door to Hard Rock Cafes the world over. Its multi-ethnic ads caught the InterRail generation's early innocence and summer-camp glee. Then, Benetton went dark side into an identity crisis, lost its way and alienated everybody.
Consumers want fashionable, disposable items that do not break the bank; think Top Shop, Hennes and Zara. They also demand catwalk to high street in the blink of an eye. Even supermarkets are muscling in by boasting about their fashion credentials.
Fashion is about innovation, tight brand management, aggressive door policy and creativity. Yes, colour is back, just look at Lacoste's rise in fortune. But so is technical fabric, witness mosquito-proof undies from Berghaus.
Tellingly, fashion is no longer about innocence. Diesel is all about 'street', whereas Benetton has lost its bottle.
TREATMENT
Get some "Fashion" in there! Steal Sisley designers (they own the brand) who seem to do fashion better.
Go more premium. Use an Italian designer (push the point of difference) to front the brand revamp.
Create a dominant repositioning campaign which incorporates the whole Benetton lifestyle (they sell home wares but no one knows).
Review all stores. Need innovative, trendy outlets, not just clothes on shelves.
Brand the stores like Nike and Apple so that they sing the whole World of Benetton lifestyle song.
Refresh the brand image.
Undertake CRM activity to talk about new shows, ranges, discounted sales, etc and promote via website.
REMEDY
- Steal Sisley designers (it owns the brand) who seem to do fashion better.
- Go more premium and use an Italian designer to front a brand revamp.
- Create a dominant repositioning campaign incorporating the Benetton lifestyle (it sells homewares, but no one knows).
- Overhaul stores to create innovative, trendy outlets, like the Nike and Apple shops, so that they sing the 'whole world of Benetton lifestyle' song.
DIAGNOSIS 2 - JUSTIN CHEATLE MANAGING DIRECTOR, JOHN CHEATLE GROUP
Benetton was founded in the 60s in Italy, but its international expansion occurred in the 80s. The 'United colours of Benetton' campaign struck the right chord in contrast to Thatcherism and gave a simple, bold, quality product a marketing edge.
Benetton's integrity, vertical integration, just-in-time production and garment-dying approach put it in front of its competitors.
The group's success, global reputation, personnel development, sales volumes and financial profit/return on investment was spectacular. Its brand management and investment, in Formula One sponsorship, for example, was undertaken seriously.
However, nothing lasts forever in either politics or retail. The 90s advertising campaigns worked only in the short term, as 'shock' tactics always do.
The Benetton brand and has lost its sense of strategic direction and appears to be under the sway of consultants who seem to have little interest in the company's regeneration.
REMEDY
- Become a 'heritage' Italian brand. Many people think Benetton is French.
'Work up' a founding myth. Try visions of a sun-drenched Italian factory staffed by life-experienced mammas and beautiful, but rustically-simple daughters.
- Radically improve styling, fabrics and construction enabling price increases.
- Sell cutting-edge items wholesale to small high-fashion shops in Carnaby Street and the Caves in Liverpool.