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You've probably heard the slogan "Sex sells." While it's undoubtedly true in some circumstances, there are many situations where the opposite is true -- sex alienates consumers. Take, for example, L Brands' (NYSE: LB ) Victoria's Secret and its PINK "Bright Young Things" line. The official market for PINK is college-age girls; however, in January, Victoria's Secret's chief financial officer, Stuart Burgdoerfer, said: "When somebody's 15 or 16 years old, what do they want to be? They want to be older, and they want to be cool like the girl in college, and that's part of the magic of what we do at PINK."
Not surprisingly, this comment sparked outrage, as parents were a bit uncomfortable with the idea of having their young daughters wearing risque bottoms with the words "Feeling Lucky?" emblazoned on the back. Although Victoria's Secret responded to criticism by stating that the clothing line is not intended for young girls, the words of the CFO have done their damage. But what, if anything, does this mean for business?
No, I don't want my middle-schooler wearing risque underwear
Why would a company risk consumers' wrath by creating a marketing campaign that seems aimed at underage girls? The answer: money. If a company thinks it'll make more money by advertising a certain way, it'll probably try it -- much to the chagrin of parents.
In the case of Victoria's Secret, such a cry of protest went up that the company quietly pulled many of the more provocative items from its online store. But even after that, many parents stated that they intend to continue boycotting Victoria's Secret. Further, such boycotts may, or may not, have a visible impact on Victoria's Secret's bottom line right now, but this incident has definitely hurt the company's image and reputation. And such a blow could definitely come back to bite the bottom line.
Is this an isolated incident?
Victoria's Secret isn't the only company to face consumers' wrath over marketing. In 2011, Abercrombie & Fitch (NYSE: ANF ) released a "push-up" bikini, originally intended for 7-year-olds and up. Parents were outraged, and the blowback forced Abercrombie to rename the bikini and announce that it was for 12-year-olds and up. In 2006, U.K. company Tesco (LSE: TSCO ) came under fire for selling a stripper pole with the words "Unleash the sex kitten inside," in its toys and games section. CNN Money named the company's move one of the "101 Dumbest Moments in Business."
How this can affect business
In addition to marketing inappropriate bikinis to underage girls, Abercrombie made a reputation for itself by advertising with scantily clad male and female models. Parents expressed outrage, but Abercrombie failed to heed the warning. For a while, it looked as if the outrage was nothing more than bluster. But since 2008, Abercrombie has seen a massive decline in operating profit. Yes, the economy took a downturn, but even now, with the economy improving, profits have failed to reach previous levels for Abercrombie.
Some advertisers argue that Abercrombie has failed to keep up with a new generation of teens who want a more individual style, and I bet that's true in some aspects. But consider a 2008 ChangeWave survey of 4,000 shoppers. According to the survey's results, Abercrombie was the store consumers said they're "least likely to shop at in the future." The primary reason? "Risque self-portrayal." Top responses included: "Seriously disagree with their philosophy," "Overly suggestive catalog," "Don't like their advertising scheme," "Moral values," and "I don't like the image they project."
Do parents have the final say?
These results indicate that there's a potential long-term risk to overly sexual advertising aimed at children and young adults. A company may get away with such antics in the short term, but in the long term, are consumers really going to shell out money to a store they think is corrupting their kids? Probably not.
There's an active pushback among parents to stop what they consider to be the sexualization of young girls. As such, if a company is seen to be promoting just that, it's likely that company will face the wrath of boycotts, damage to its reputation, and eventual losses in revenue.
Know your consumer
It's easy to see how sex sells, but only to an appropriate audience. Consequently, companies that continue to push the boundaries of overly sexual advertising to inappropriate audiences are likely to end up with unhappy consumers. And those customers could be lost for life. If a company seems it's not getting the hint with overly suggestive advertising, investors may do well to question its financial future.
These companies may be missing the mark when it comes to consumers, but there are some retail companies that are doing everything right. More important, they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.