• by Sarah Mahoney  @mahoney_sarah, April 4, 2024

Carter’s, the largest clothing brand for young children, is navigating a sea change in parenthood. To get closer to Gen Z, it’s rethinking all its marketing, revamping the loyalty program and hiring Mischief as agency of record.

Both decisions stem from shifting demographics and different ways of shopping, says Jeff Jenkins, executive vice president of global marketing.

“Gen Z is now in the sweet spot for becoming parents, in that age range of 26 or so to 30, or maybe 35. There are about 3.5 million babies born yearly, and our job is to be just as relevant to parents every year,” he says. “We want to remain the brand of choice for the next generation, just as we have for 160 years.”

But there are challenges. In its most recent quarterly results, Carter’s sales fell to $858 million, down from $912 million in the prior year's comparable period. And for the full fiscal year, sales dropped to $2.9 billion from $3.2 billion, with young families pressured by inflation.

Jenkins tells Marketing Daily that hiring Mischief @ No Fixed Address is part of that new thinking.

“We need to show up where Gen Z is living, whether on TikTok, Instagram Reels or Reddit.”

For previous generations, recommendations from friends and family meant more. “This generation wants to discover products through social media, and we need to make sure we are woven into that culture,” he says. “We want them to know Carter’s is a brand that understands what it means to be a parent.”

The company has renamed the loyalty program "Carter's Rewards.” It allows customers to earn points and perks faster and offers early access to sales and exclusive offers. With 86% of transactions coming through the program’s 10 million loyalty members, “it has always been a cornerstone of how parents have interacted with us, giving us one of the highest penetrations of loyalty in the apparel industry.”

When the company examined it closely last year, it realized that using new technology could improve its offers. “Focus groups revealed that shoppers wanted two things—to earn rewards faster and to have more features.”

The launch coincides with “Mom Math,” a new ad campaign rooted in insights about spending habits.

For young parents, value is always top of mind. “They are often saving for a first home, and they are earlier in their careers,” he says. “And as digital natives, we had to think harder about how to improve the app. They expect interaction and gamification. And they want personalized offers. Our new version is more modern, and we think of it as a passport to parenthood.”

Initially introduced as an add-on, the app has grown fast in the last two and a half years. “It now makes up a huge portion of our digital e-commerce sales,” he says.

The loyalty program and app revamp aim to increase customer lifetime value, which the company is also addressing through reconfiguring its store base and thinking about brands differently.

While many consumers still think of Carter’s as a brand for babies, “we sell clothes for kids up to age ten. So we’re hoping to keep more parents with us as they transition into the toddler years and beyond,” he says. “We’ll be measuring that retention and shopping frequency.”

Carter’s wholesale partners include Macy’s, Target and Walmart, and has over 1,000 stores of its own, in multiple formats. The company has recently started experimenting with new ways to get parents to “age up” with the brand.

“We have many 'side by side’ stores, where one half is Carter’s and the other is Oshkosh,” he says. “We’ve re-engineered some so that one side is all baby, and one is all kids. We've seen a great response from our customers. And it is allowing us to expand the assortment in those older ages and continue our age-up strategy.”