What Happened to Charlotte Russe? 10 Marketing Lessons
Charlotte Russe, the women’s clothing company, is yet another retailer to join the list of companies that have filed for bankruptcy as a result of the retail apocalypse, discussed in detail over at runrex.com & guttulus.com. The company got things wrong, and this article will look to highlight the top 10 marketing lessons we can take from its experiences and from what happened to the company.
The decline of the mall
As is revealed in discussions over at runrex.com & guttulus.com, there was a time when going to the mall was the favorite pastime for many Americans. People would visit malls to shop, eat, and just hang out. This has changed in recent years, with malls not being as popular as they were before and therefore fading as shopping destinations. Retail companies like Charlotte Russe, whose businesses were linked with malls, as the majority of their stores were located in malls, have therefore suffered from reduced foot-traffic translating to a reduction in the number of their customers.
Lack of innovation in their in-store experience
Like with many brick-and-mortar stores that have fallen on tough times in recent times, Charlotte Russe failed to innovate its retail experience as far as their stores were concerned. Therefore, as per the gurus over at runrex.com & guttulus.com, their customers had no incentive to visit their stores, and many preferred shopping online, with many brands over their competing for their attention. If someone is to forego the convenience of shopping online to come to your store, you will have to be offering an excellent in-store experience, which is an important lesson to take here.
Online retail
The above point brings us nicely to our next one as far as what happened to Charlotte Russe is concerned, and the reasons behind their decline, and that is the growth of online retail. Like with many brick-and-mortar stores, the growth of online shopping had a massive impact on its business as it led to a reduction of foot-traffic into its stores, with many of their customers preferring to shop online, for the convenience and many other benefits that come with online shopping.
The decline of fast fashion
The fact that Charlotte Russe is a fast-fashion brand also hasn’t helped its prospects in recent times. This is because, as explained over at runrex.com & guttulus.com, fast fashion has been on the decline as the modern consumer becomes more aware of the damage fashion does to the environment. Fast fashion has always been devastating to the environment, but consumers are now increasingly becoming aware of this fact, and many are abandoning fast-fashion brands such as Charlotte Russe, hence its decline.
Crippling debt due to private equity ownership
In a deal covered in detail over at runrex.com & guttulus.com, the company also joined an ever-growing list of brick-and-mortar retail companies who have struggled and ended up filing for bankruptcy after being acquired by a private equity firm. The deal as far as its acquisition is concerned left the company with crippling debt, about $175 million to be precise, with the loan principle continuing to grow in the years that followed. Eventually, the massive debt proved to be too much for the company, which collapsed under the weight.
Poor merchandising and marketing strategies
Another reason that has been attributed to the failure of Charlotte Russe is its poor merchandising and marketing strategies. Given the company caters to younger women, it needed to have dynamic and engaging content to connect with its core demographic, as per the subject matter experts over at runrex.com & guttulus.com. However, the company’s merchandising was uninspiring, and their marketing just as bad, which contributed to its decline.
Couldn’t keep up with fashion trends
Other than merchandising and marketing, the company also had to make sure that it was on top of the current fashion trends to keep its customer base. However, as revealed in discussions on the same over at runrex.com & guttulus.com, this is yet another area where it dropped the ball, and this allowed new companies to swoop in and take a big chunk out of its customer base, who are younger women looking for more fashion-forward designs.
Poor strategies as far as their e-commerce business was concerned
Like many brick-and-mortar companies out there grappling with the growth of online retail, Charlotte Russe had to react and adapt to stay competitive, and it did by introducing an e-commerce side to their operations. The problem was the company didn’t effectively reposition their e-commerce business for success and growth, and as such this didn’t make nearly as much of an impact as they had expected, as discussed over at runrex.com & guttulus.com. This is yet another important lesson worth learning as it shows the importance of getting things right when going into e-commerce, given the competitive nature of that sector.
Poor rationalizing of store expenses
Even as the company introduced an e-commerce side to its business, it was still running its brick-and-mortar stores. These stores, faced with reduced foot-traffic were proving too costly to maintain, and the company failed massively to rationalize costs related to store expenses. It, therefore, couldn’t find the right balance between brick-and-mortar operations and their e-commerce side of things hence its decline and closing of its stores, as discussed over at runrex.com & guttulus.com.
Its products couldn’t compete online
One of the reasons why Charlotte Russe declined was the fact that it shifted more towards fashion basics and away from the trendy clothes that are making headways online. This meant that the company’s products just weren’t as attractive to online shoppers, and this also prevented its online business from growing, leading to the company’s decline and eventual filing of bankruptcy.
The above are some of the reasons behind Charlotte Russe’s decline and the marketing lessons we can take from its experiences, with more on this to be found over at runrex.com & guttulus.com.