Carter’s rethinks its marketing, apparel and store design to appeal to Gen Z parents

“As a leader in the baby and children’s space for quite a long time, almost 160 years, we really believe it’s critical that we continue to kind of anticipate and meet the evolving needs of our consumers, mainly our parents and our families,” Peterson said. “In doing that and trying to anticipate their needs, we’re really looking at that consumer and how she is continuing to evolve.”

For Carter’s, Peterson said, that means paying particular attention to this newest generation. The company anticipates two-thirds of expecting and new parents will be Gen Z by 2025. “We do a lot of research and listening to understand what they need,” she said. “We constantly have to be checking in and kind of pulsing all the ways we get feedback from them to make sure we’re meeting their needs.”

The changes come as the company’s in-store and e-commerce sales have been sinking while its wholesale business has grown.

In its last earnings release in July, Carter’s reported a 6% year-over-year decrease in net sales to $564 million in the last quarter, which ended in June. Wholesale sales increased 3.2%, while DTC comp sales fell 9.2%.

Carter’s chairman and CEO Michael Casey said in the release its sales have been under pressure due to the inflationary environment and that it has increased brand marketing investments to improve store traffic trends for the rest of this year.

In-store experience

Peterson said Carter’s — like mall owners and other retailers — have found Gen Z shoppers see value in the in-store experience.

“I think it’s kind of run counterintuitive [to the idea] that people think of this as completely the digital generation,” Peterson said. “It absolutely is, but we’re finding more than any demographic, they are really willing to invest time in the store and they want to linger, but it needs to be the right experience to capture their attention.”

Peterson said she and her team kept this in mind when curating the retailer’s new concept store that just opened in its hometown of Atlanta. It was designed to have a modern, clean aesthetic with experiences that keep parents engaged.

One focus for Carter’s in the new flagship is giving dedicated space to each of its brands — Carter’s, OshKosh B’Gosh, Little Planet and Skip Hop. In that sense, Peterson describes it as being like a department store for kids.

“It’s the first time for all of our brands under one roof in their biggest and boldest expression,” she said.

Experiences inside the new store include a mother’s lounge, a toddler play area, gift wrapping and a kid-friendly restroom with toddler potties like you would see in a kindergarten or preschool, per Peterson. “It’s really just taking all the insights about all the things that [the customer’s] looking for, and then testing and learning into what she responds to the most.”

The company plans to take concepts from this store to others nationwide by 2026. The company has 1,027 stores in North America, and as of June it planned to open 25 stores and close 11 in the remainder of fiscal 2024. At 9,000 square feet, the store is one of the retailer’s largest. Peterson said Carter’s is exploring whether the company will want to open more stores of this size or take insights into what works in the store and incorporate them in new stores and remodels.

Faith Huddleston, a retail design director for design and architecture firm Nelson Worldwide who has worked with brands such as American Girl and Melissa & Doug, said designers of children’s stores have especially been keeping both kids and adults in mind when curating spaces.

Experiential store design is a focus throughout the industry. Huddleston, who was not involved with the Carter’s redesign, also said higher expectations from Gen Z have contributed to stores offering spaces with multiple areas to play or socialize.

“This customer coming up, as a parent, they just expect more. They don’t just want to walk into a store and purchase things,” she said. “They want to see what the brand is going to do to benefit them in their lives and why they should come back.”

‘More going on than just cute’

The research on Gen Z also helped inform its latest marketing campaign.

In a new Carter’s commercial, a narrator tells babies that they’ve “got more going on than just cute” in a tone as if she was speaking to any adult. The campaign aims to say Carter’s makes clothes that have style but are also comfortable, functional and durable. The tone of the campaign, which she calls “authentic” and “unfiltered,” is driven by the movement of creator and user-generated content.

“We’re showing the really stylish yet highly functional products, and how they can be resilient in those moments with parents,” such as when a baby knocks over a glass of wine, Peterson said. “It’s really just trying to have a look and feel, regardless of the channel execution, of that true, authentic, unfiltered creative.”

Peterson said the new campaign, “More than Just Cute,” came out of research showing Gen Z parents want products that are stylish, trend-forward and at a great value. They also want to dress their kids like themselves, in their personal styles, she added.

That goes back to the stores as well: Carter’s wants to feature more from each of its brands in the stores so customers can find the closest match to what they regularly wear. People who like denim may find it in OshKosh B’gosh’s products, while people who care about sustainability may gravitate toward Little Planet.

“The intent is really to deepen relationships with consumers in the community and really have this be their go-to destination for all things for their kids,” Peterson said.