The Brand Man Speaks

Investigation show Macys, Kohls and JC Penney's "sales" offers may not be legitmate

NBC has released an investigation that shows that some top US retailers are essentially "cheating" Americans with less than honest sales offerings.

At issue are "sales" prices reflecting discounts off "full retail/regular pricing" and whether there is some unethical, misleading retailing going on. The investigation said the activity may not be illegal (retail fair trade pricing laws give the retailers some wiggle room) but it certainly smacks of scam like tactics.

Products were shown with what appeared to be notable discounts off full retail/regular prices. However, in a number of the cases those discounted prices had been the price for far longer than a legitimate sale period or the full retail price was never the price used to offer the product for sale in the first place. The overall intent appears to make something look like a sale that isn't one.

Consumers are impulse oriented when shopping especially if they see something that appears to be a bargain. Retailers know this as this is the kind of information they gather from various market research studies they conduct all year round. I used to conduct focus groups on retail subjects and know retailers are always looking to find ways to generate impulse purchases and capture as much of the consumers' dollar as possible once they are in-store.

What is surprising is that with all the resources consumers have today with mobile access to a world of pricing information prior to purchase, one would think they would behave smarter and be able to assess the real bargain sales from the pretend ones. I for one rarely buy something because it is one sale theses days without first checking on my smartphone for prices for the item online and at brick and mortar locations elsewhere first. In most cases today, I find in-store retail prices generally higher than online prices therefore driving my business to sites like Amazon and Zappos rather than buying at a retail store.

It is unclear if this report with generate more scrutiny from Attorney Generals offices nationwide to pursue action against retailers for "misleading" consumers with what I would call faulty pricing.

The bottom line is an old saying, "an educated consumer is the best customer".

Watching out for you everyday.

Eli

 

Sarah Jessica Parker launches high-end shoe line with Manolo Blahnik

Sarah Jessica Parker the actress most well known for playing Carrie Bradshaw on the extremely popular Sex and the City series is launching a high-end shoe line with the head of Manolo Blahnik. Manolo's are the luxury shoe brand Parker's character made a house-hold name in both the TV series and movies of the same name.

This is not the first time Parker has ventured into the apparel business. Her earlier ventures failed miserably. Her line called Bitten was a low priced fashion brand sold at the now defunct Steve and Barry's collegiete retail chain.

In a blog post written when Bitten first launched I correctly predicted it would die fast. Parker is far better known for the Bradshaw image, a struggling reporter in love with luxury apparel brands on which she would drop months of income to purchase. The Bitten line was based on Parker's real life fashion interests which meant little or nothing to consumers. This was a case of a celebrity and her backers not understanding the brand image that fans most identified with...her character not her real self.

Parker was also miscast as a spokesperson for the Gap for a very short time some years back. Again consumers couldn't see the connection between the Gap and Carrie Bradshaw.

Now, with help from one of the leading luxury shoe and accessories brands, SJP, as the brand will be called, will be launched exclusively at Nordstroms. This time I believe Parker will be far more successful. Her SJP brand will not only sell shoes but also handbags and other accessories, all in the luxury category.

Watching out for you eveyday.

Eli

 

 

Walmart offering "money back guarantee" on its produce to ensure lower price doesn't mean lower quality

As Walmart continues its journey to take over the grocery business from mainstream supermarkets across America, the huge retail concern has added a new strategic weapon to cement this effort.

I was quoted on Bloomberg News yesterday about this story: Bloomberg News

The retailer now offers a full refund guarantee on all of its produce. Produce (no pun intended) a receipt to the customer service desk (lines there can be long, however) without too many questions asked, and you Mrs. consumer get your money back.

To ensure that Walmart shoppers understand that lower prices on produce (vs. other retailers) does not mean lower quality, this refund policy is a smart marketing tool. The only issue is in-store implementation. Walmart's are huge stores with long lines. Since one cannot get the refund at the check out but rather at the customer service desk, this may reduce the number of consumers who actually seek the refund.

Abuse of the offer is also a possibility. Walmart's money challenged customers may find this a temptation worth pursuing to get food for free since returning the produce is not a requirement to get the refund.

I think Walmart believes the overall costs of the refund policy will be outweighed by the strong impression that Walmart sells produce as good as any other food retailer, just for a lower price which may entice customers who do not buy perishables at Walmart to give it a try.

Watching out for you everyday.

Eli

 

Cheerios multi-cultural TV ad attracting hate comments on YouTube

A recent TV ad for General Mills Cheerios (one of the long standing multi-generation cereal brands still going strong in America) introduced a campaign futuring a multi-cultural family. The creative which brings a multi-race child, white mother and black father together over heart health eating Cheerios depicts an increasingly common site in America: Mixed families.

However, it is not a surprise that such progressive advertising in which General Mills takes a stand of inclusiveness and tolerance is causing a stir of strongly worded hateful postings online. Unfortunately, many Americans mostly over 40 still see this kind of crossing-over family mix as a problem--to some still unacceptable. The ability to use the iternet to anonymously express oneself fosters the expression of such negative hateful opinions.

General Mills has decided to remove the hateful comments on YouTube as well as to disable the comment section altogether instead of dropping the campaign which they believe is reflective of today's society.

I applaud General Mills for this action and wish more companies would follow their lead.

Watching out for you everyday.

Eli

Marketing #101: Under promise and over deliver. Why Gaylord Palms Resort Orlando fails

One of the first mantra's one learns studying marketing is the most successful entities/products/services are ones that under promise and over deliver to the delight of the consumer.

It doesn't take a genius to understand that if you promise something you can't deliver, you not only disappoint your audience but also you likely will lose them and they will spread negative information about your brand.

Saying and delivering outstanding customer service are too very different things. Words are fine but actions speak far louder than words.

Case in point.

I recently stayed at the Gaylord Palms Resort in the Orlando area to attend an event held in their convention center. The hotel is huge with over 1400 rooms including an indoor activity atrium and numerous themed restaurants. It is kind of Disney-like but not Disney.

Virtually all touch points from recordings on the phone to the in-person dealings with staff include efforts to communicate a commitment to extraordinary guest experiences. I like this idea especially the fact that they try to carry this brand message throughout the facility in any and every way they can.

Problem is the execution falls flat and greatly disappoints.

Examples.

I called housekeeping for extra towels and was assured they would be up to my room in a jiffy. Four hours later still no towels. Two calls to the "can do it/get it done" hotline later and the towels finally showed up along with apologies that they dropped the ball "somewhere".

I stayed two nights with different room rates for each night based on what was being offered. This required getting new keys which were delivered under our door during night one. The keys worked in the room lock but failed to allow me access to my car in the self-park. Although wanting to be very helpful, front desk staff were not consistent in their approach to solving the problem requiring a few, "let me check how this can be done", quips.

The room rate change (but still in the same room) also caused us to lose access to the internet service which never seemed to work again for us. The system did not recognize me and my room number as legitimate guests. I didn't have time to waste trying to get this fixed so I just used my cellular data plan instead.

Special meals for the fitness event I attended were supposed to be available in the sports bar restaurant. Again, the staff was not prepared and had to scramble to try to meet the expectation. The same restaurant the next day was quite busy and this seemed to completely overwhelm many waitstaff members leaving diners unhappy because of delayed food and incorrect delivery of orders. Apologies notwithstanding the problem seemed significant for a place that promises extraordinary service.

There were serveral other service delivery issues but the most insulting two occurred upon check out. I did not get the bill under my door as usual with most hotels, so I called the front desk to get it delivered. (BTW in this huge hotel it is quite a hike to the front desk from most rooms). After waiting over 30 minutes and two telephone calls later and no bill, I went down to the lobby to handle it directly. I received more apologies for the "no-show" front desk person with my bill, but that was the least of my problems. My bill was not remotely accurate requiring an extra 20 minutes of my time to get it straightened out. Despite my rate package documentation in writing, the hotel did not have this information in their system (for some unexplained reason---which generated more apologies) and the front desk staff member assisting me had to manually re-code and re-enterfix each of the four mistaken/inaccurate entries.

And the final blow came when we arrived home only to find that a family member's pillow and blanket had apparently fallen off the bellman's cart while our belongings were being transferred from the room to the hotel's front drive and was not packed into the car. (The hotel fed ex'd the items overnight with more apologies).

The lesson to be learned (hopefully) for Marriott (which runs the Gaylord Palms Resorts) is not to promise what you cannot deliver consistently. Even calling the fix it hotline required several attempts each time because the phone did not get answered or was put into perpetual hold. Not good.

All in all Gaylord Palms is a "needs a lot of work" brand especially if it continues to espouse the "extraordinary" service mantra.

Watching out for you everyday.

Eli

 

Abercrombie CEO Jeffries disses customers who are fat, skinny, old, unattractive

In an old interview that is being resurfaced in the new retail tome, "The New Rules of Retail",  Mike Jeffries CEO of way past its prime young adult retailer Abercrombie and Fitch is quoted as dissing anyone who doesn't fit the image of the model beautiful kids he promotes for his brand.

Jeffries is no stranger to controversial actions with the A and F brand often accused of pushing the envelope with highly charged sexual visuals in the company's catalog and instore. He is also one of the most highly [over] paid executives in the United States.

It is certainly the perogative of the company to clearly state its brand positioning and the target audience it seeks for its products. This is good business. The irony here is that "perfect" beautiful all-American look of young men and women in their late teens and early 20s is what attracts a large audience of folks to the brand who do not look that way--not remotely. That image is one many would like to align with themselves and the closest way to do so, is to buy into the brand. Large numbers of A and F loyalists are over 25--beyond the key target--, including a large grouping of gay men who are 40 plus who are fit and see themselves as in their 20s and "competitive" with young buff all-American guys.

For those consumers who do NOT like Mr. Jeffries stance, they do not have to buy his company's clothing. They should not complain or feel insulted. If they want to be a part of the A and F brand they have to deal with the fact that they are not the company's prime targets. Period. And, honestly, many of these folks should NOT be buying this brand's apparel. They truly do not look younger in those clothes and are only fooling themselves. But, hey, this is America. Dress as you wish. Just do not complain.

Watching out for you everyday.

Eli

 

 

JC Penney CEO Ron Johnson, who twice tried to revamp the retailer, is out.

It was no surprise to read the headline posted above earlier today, (I have written several blog posts about why JC Penney was making serious brand mistakes). After several failed attempts to revamp mid-market retailer JC Penney, it was painfully obvious that the company's board needed to cut the blood letting as soon as possible. Business was down 25% last year.

What went wrong? Johnson, a notable former Apple exec, was picked to bring retail savvy from the technology company to a tired old department store brand. The problem is trying to up-market a lower end retailer whose sales were driven by price (and big sales/discounts/coupons) has historically not worked (for anybody). WalMart tried this approach a few years ago trying to out up-market Target and it also failed miserably.

Although re-branding an entity can be done, the approach used for JC Penney that tried to eliminate its brand essence and its positioning as a price point retailer was failed from the get go. Penney's customer is price driven all the way and not interested in complicated pricing strategies (there were numerous strategies used that easily confused the regular consumer) as introduced under Johnson in an attempt to get people off sales and coupons.

Its ad campaigns looked like Target knock-offs as did the catalogues and newspaper free-standing brochures they produced.

Unless the brand had something in its bag of tricks that would re-birth JC Penney without alienating and confusing its core buyers, any new strategy that made customers sense that prices were going up and that the store was moving more towards being Macys or a boutique operation was doomed to fail.

I actually think the board waited too long to make this decision and should have cut the cord after one season since the reasoning behind the pricing strategy was flawed from the beginning and trying to make JC Penney the "Apple" of department store retailing was never going to work.

Watching out for you everyday.

Eli

 

Lincoln Motor Cars: Come back brand of 2013?

Many media outlets and marketing experts are touting the comeback of several old time brands in 2013, the prominent of which is Lincoln.

The stodgy "town-car" brand of the past two decades or a dinosaur to most has been an aging auto brand once a noted luxury marque that seemingly was dying a very very slow death.

Like the ad phrase that did NOT help now defunt Olds, "Not your grandfather's Oldsmobile", Lincoln is trying to completely re-brand itself through its new model the MKZ.

I know Lincoln must think I am a prime target for the new model. I own two European luxury cars and while driving one in a gourmet store parking lot recently, a parked MKZ caught my eye. I have always been a car buff so new or distinct cars always catch my eye. What made this experience different was the fact that just as I sslllloowwwly passed the MKZ (not knowing what brand it was) a stunning Afro-American woman appeared from beside the parked car and approached my window.

"Like what you see?" is what I think she said and from there a 20 minute conversation ensued. It was like my own private auto show and I was very intrigued.

When I first was told it was a new Lincoln, I had an instant negative feeling but something said listen a bit more before you make up your mind. (The beautiful woman did not hurt that cause one bit). After my personal visit with the MKZ I was impressed at virtually every turn and thought "wow, this could really give BMW and Audi a run for their money".

The woman who stopped me to talk about the car was part of a strategic effort to reach out to affluent targets (many older than Gen X the supposed target) on a one to one basis to introduce the car before it went public. Intriguing idea. I will admit I would less likely have spent time investigating the new model had it been through traditional new car introductions, (even at the local auto show that took place a few weeks later the presentation of the MKZ was stale and reaked of old school approach--not in a good way).

I don't know if one model can rebuild Lincoln but I am intrigued and probably will go for a test drive to see if the pedal meets the metal. I still have that feeling that Lincoln is an old persons brand and only for town-cars that will be hard to shake, but I am willing to give it a try.

Now, Lincoln has to truly deliver on all fronts to convert Euro lux brand car owners and that will include a vastly upgraded dealer experience and more intriguing models. The Lincoln ad campaign is very sexy and edgy pulling the best of the brand's past reputation for innovation (suicide doors on the sedan in the sixties) into the future, (state of the future technology.)

I will report back after my test drive.

Looking out for you everyday

Eli

Twinkies for life: Hostess to shut down but iconic brand will survive

Any babyboomer who has not been sleeping through his or her lifetime knows about Hostess Twinkies. The vanilla cake outside with creamy white filling inside. It was the ultimate kids feel good snack so surgary and soft so calming and satisfying.

Hostess unable to resolve a employee union dispute decided to shut down its operations this week. The reality has been in the air for sometime. The baking company has been in financial difficulty for some years but this union pay strike put the "icing on the cake".

The maker of Wonderbread, Ho Hos, Devil Dogs, Funny Bones and their most famous brand Twinkies is closing up shop rather quickly, however, I believe this will not be the end of this iconic brand.

Twinkies are a part of the fabric of babyboomer lives which is why it makes it such an important brand of long standing. Although the butt of many jokes over the years and less in demand because it is truly unhealthy food, Twinkies nonetheless has a place in our world and will continue to have one. This brand is just too important and meaningful to people to let it die. Without the baggage of the dying manufacturer, a more financially stable baker can swoop in and buy the brand and ensure it stays around for years to come.

Wonderbread, the doughy white bleached flour product that served as sandwich bread for millions in my childhood, has some iconic status as well. However, people of all ages have increasingly forgone using white bread because it is so unhealthy, there are so many alternatives that are more healthy and honestly it won't be missed. It is a symbol of our childhood when eating unhealthy was the norm and most of us have moved on from that point and only see Wonderbread in the rear window.

Twinkies remain a symbol of our collective need for mini-indulgences even today. Our stressful and complex lives yearn for such pick me up products and despite the tons of sugar and other unhealthy ingredients, we continue to need such products to turn to if for no other reason than babyboomers are into naustalgia and a need to hold on to some key elements of their childhood as they age. It also tastes amazing when you just want that small satisfaction of uummm good bad stuff in your mouth.

The bottom line is the brand value of Twinkies is very high and undoubtedly this brand will be picked up very soon and back on grocery store shelves before you know it.

JC Penney fires President as result of brand restructuring failure

JC Penney's has fired its 8 month old President, formerly from Target, after the re-branding effort for the middle market department store failed.

Why is anybody surprised?

I wrote in this blog shortly after Penney's launched its new pricing policy along with a Target copycat style brand ad campaign that it was not going to work. The President who was fired got a signing bonus of $1.2 Million. Are you kidding me? Any well-trained and experienced brand marketer could have saved Penney's a ton of money by telling them their "new" strategy would fail miserably and why. I must also note that the CEO Ross Johnson who came from Apple is equally at fault but makes his brand division Pres the fall guy.

The bottom line is you can't take an old old brand that has been middle to lower market for years with price being its key benefit (and no real brand positioning that I could detect) and try to give it a brand makeover that mimicks one already around (Target) and creates a overly complex pricing scheme that is supposed to make understanding what things cost easy but does just the opposite. It was also supposed to move the needle away from just a pricing positioning to a lifestyle one, but the lifestyle approach and the pricing posture collided on day one in my opinion.

Let's see how long Johnson remains. Apple's retail experience was built from scratch the way they wanted it. That's the cred that Johnson brought to Penney's. The problem is Penney's retail concept has been floundering around for years and changing it can't be done quickly and by assuming you just forget the past and start with something completely new.

This surely will become a great B school case study in the near future how NOT to rebrand a major retailer. The real question now is will JC Penney's survive or die a slow death?

Watching out for you everyday.

Eli