The Brand Man Speaks

Macys sues Martha Stewart Living for deal with JC Penney

In a move that was highly anticipated (and actually took longer to happen than expected) Macy's is suing home living diva Martha Stewart's company Martha Stewart Living Omnimedia for making a deal with JC Penney to develop and produce exclusive products for the middle of the road retailer. Macy's has had a long standing exclusive product deal with MSLO and when the JC Penney deal was announced most marketing folks raised an eyebrow and assumed a lawsuit was to follow. Now it has.

Specifics of the suit have not been made public, but given how much support Macy's has put behind Martha Stewart especially when things went south with her becoming a felon, it was a bit suprising she made the deal with Penney's. One might speculate that the Macy's/Stewart relationship was probably not as profitable for MSLO as the years went on as they might have liked and thus they looked for another partner who would give them more money and more control.

I do not think Martha will get hurt by all of this. It is not like Martha is only up market these days and the JC Penney link could devalue her brand. Far from the case. Martha's products go from KMART up the ladder to very high end, more successfully than almost any other home brand, so that isn't an issue. JC  Penney can benefit greatly from the association with Stewart as that retail brand has been floundering for years with no identity.

More details to come.

Watching out for you everyday.

Eli

Paula Deen may have swallowed her own poison pill. High Fat Food Chef hides Diabetes

Paul Deen the southern chef who rose to prominence in the past few years with her high fat generally unhealthy but delicious (to many-but not me) cuisine has finally disclosed that she has Diabetes. What is worse and threatens to destroy her brand is the fact that she hid this information from her "fans" and the public in general and then has gone on to become a spokesperson for a Diabetes drug called Victoza.

The problem lies in the fact that her claim to fame are foods that are unhealthy and could directly relate to causing Diabetes in those who indulge in such fat-ladden meals. Ms. Deen has said she "didn't know how to handle" disseminating the news of her Diabetes or her new spokesperson status given the nature of her brand's identity.

Famous recipes have included Deep Fried Mac and Cheese and Fried Butter Balls. Can you say "it might kill you" foods?

Fans of the Food Network have spoken loudly condemning Ms. Deen for making millions and not being honest with her fans and the American public in general.  Other notable chefs have gone as far as to make public statements about Ms. Deen that are not complimentary about this situation.

From a brand point of view, this latest twist (which includes now offering low(er) fat recipes and tweaking her famous Paul Deen Southern Cooking approach dramatically) may create empathy but it undercuts what her brand was all about specifically all her cookbooks and shows that are completely tied to fatty foods.

If she radically changes her shows books and endorsements the Paula Deen brand will be no more and likely to become a footnote in celebrity chef history.

Watching out for you everyday.

Eli

Mercedes Benz uses Che Guevara in promotional presentation causing outrage

In a bumbling effort to promote what Mercedes called "revolutionary" new developments in automotive technology the luxury automaker is scrambling to do damage control over the use of marxist revolutionary Che Guevara's image with a Mercedes 3 point star in his beret in a Las Vegas CES presentation this week.

In a rare moment of joining forces, liberal and conservative individuals and groups have cried foul and condemned the automaker for the use and reference. For example:

"Mercedes-Benz Uses Communist Madman Che Guevara to Sell Luxury Cars," said the headline on a blog from the Heritage Foundation, a prominent conservative political organization in Washington.

"Che Guevara... was a psychopath whose sadistic lust for blood was not easily quenched. He killed for pleasure," noted Heritage Vice President Mike Gonzalez.

It blows my mind sometimes how smart marketers do very dumb things without thinking about them. Mercedes has apologized for the use but the PR which is very negative can't be that easily ignored this time because key customer targets are expressing outrage throughout both traditional and social media.

Ernesto Suarez, who organized an effort to get Mercedes to apologize for using the image of a man often  called "a racist, homophobic, anti-semitic and tyrannical killer who admitted in his own writing to his endless blood thirst, " expressed relief that his effort to generate the apology was realized.

Some social media pundits have called for a boycott of Mercedes Benz cars. (Mercedes Benz just completed an oustanding sales year running neck and neck with BMW for top honors in the luxury automotive arena.)

A german automaker like Mercedes has to be very careful doing such polarizing activities because of its association with Hitler's operations during World War II and beliefs among segments of the American population (Conservative and Orthodox Jews for example) that Mercedes along with other German companies will never be cleared of their anti-semitic alliances from the War.

Watching out for you everyday.

Eli

Sears Holdings to close 120 or more Sears and Kmart stores

It should come as no surprise to anyone who shops brick and mortar stores these days that Sears Holding the parent to Sears and Kmart is planning to close 120 or more stores around the US.

Most retail competitors did fairly well this year and particularly this holiday season. Why did Sears not enjoy the same benefits of consumers going out and spending?

Simple.

Sears has no brand identity and hasn't for many years. Yours truly has written numerous times that Sears is a retail brand dinosaur that should close up and die. The brand hasn't had a positioning of note since maybe the "softer side of Sears" over a decade or more ago that helped consumers understand they were also sellers of soft goods (apparel) besides hard goods, (tools).

Sears used to be the catch all retailer one could go to, to get anything (besides food) you needed. It was America's store. They sold virtually everything. As WalMart exploded as the mega retailer of the past decade and retailing in general became more defined and brand specific, Sears lost its way. It isn't known for good pricing, service or selection or unique goods (that are consistent with its mid-America brand--Kardashian products make absolutely NO sense at Sears but don't get me started about that emperor's new clothes business). Sears exists because of inertia not because of any reason to exist and that is why I expect the brand to be out of business within two years or less. Sears is just completely out of step with the world in which we live today. Period.

Watching out for you everyday.

Eli

 

Macys expresses uncertainty about relationship with Martha Stewart after announcement of J C Penney deal

As discussed in a previous post, Martha Stewart has been successfully able to distribute her branded goods broadly across the retail planet, however, Macys did react to the news that she had sold a percentage of her company and would be building shop in shops in J C Penney's US wide. They did not end their relationship with her but indicated they would "re-visit" their product selection under her brand.

What likely will happen is a jockeying for position. Macys will keep Stewart's products if they are distinctively exclusive to the retailer and not somehow copied for inclusion in Penney's. Further, they probably will want to readjust their financial relationship with her to a more favorable one.

Macys is a higher level retailer than Penney's and has been fairing well in the economic downturn by offering unique and meaningful brands and products to its customer base. Stewart's line of home goods has been important to Macys so just giving it up likely would not be a good idea. Macys deal with Stewart expires end of 2012. They should renew. One iffy note. Apparently according to the Wall St. Journal, Stewart's company did NOT tell Macys about the Penney's deal until just before it went public which probably caused some major ill-will.

Altough Macys noted a concern about "brand proliferation" of Martha Stewart branded goods (too much of a good thing in too many places) I believe her brand is strong enough to do well in more types of retail concerns and I also believe Macys will see this too.

Watching out for you everyday.

Eli

 

Martha Stewart partners with J. C. Penney to expand brand and help shore up weak sales at retailer

Martha Stewart proves if your brand is targeted right and the core brand essence is compelling enough it can appeal to a broad spectrum of Americans across socio-economic levels.

Stewart is partnering this time with J. C. Penney for the development of mini Martha Stewart boutiques inside the lagging retailer's stores nationwide. Penney has taken nearly a 17% stake in Martha Stewart's public company. For Penney's CEO Ron Johnson sees this co-branded venture as a way to increase the retailers exposure and importance as he tries to get the company back on its feet. Penney's is doing poorly relative to Macys and other traditional department store entities. Johnson recently took over the helm of Penney's after notable tentures at both Target and Apple where he developed the wildly successful Apple retail concept.

Stewart will provide new exclusive products for her shop in shop concept that will not directly compete with her current products sold at Macys, Home Depot and PetSmart. Staffers will be exclusive to Stewart's mini stores to ensure the brand message stays on target.

Although Stewart's empire has taken a big hit in the past few years because it is so advertising dependant (her magazine is a big part of her empire), her alliances continue to prove she has staying power and remains one of the iconic brands of the past several decades especially given her stint away from the business for illegal stock transactions followed by jail time.

Watching out for you everyday.

Eli

Free shipping becomes commodity offering vs benefit for holiday shoppers

For the past number of years, many millions of consumers had chosen to buy online vs in brick and mortar retail (Including on Black Friday) because of two reasons. First, no sales tax (in most states). Second, free shipping. Not all online sites had offered free shipping in the past. It might have required a minimum expenditure of say $50 but it did entice people to shop one place versus another.

This year it appears that "Free Shipping" has become a commodity offering. This means that it is offered by a much larger number of online only retailers and is being matched by many brick and mortar retailers on their online sites. It has in marketing parlance become "a price of entry" into the online shopping game. You have to offer it to survive and compete.

This is very good for consumers but could pose financial problems for retailers. Shipping costs are not inexpensive for retailers to absorb and could hurt profitability numbers at the end of the holiday season when all is tabulated.

One online retailer that appeals to young urban hipster types, Karmaloop.com, throws "free shipping" and percentage discounts out to its loyal buyers pretty frequently all year long. However, when you click through to final payment terms on your purchase you find they charge a $1.50 "handling" fee and don't see that has a shipping charge. I have expressed to the CEO that I feel this is a bit disceptive to consumers. The company's response has been they need to offset the huge costs of free shipping and this is how their bean counters told them to do it. Bad idea.

Personally, I have become a heavy Amazon.com shopper because of free shipping and very low cost two day and overnight shipping options as a "prime" member, (which costs $79 a year and is worth it in my opinion). I also have found from the comfort of my beach side lounge chair better deals on Amazon then some advertised Black Friday offerings at brick and mortar stores with the added bonus of no sales tax and no shipping fees. Pretty hard to beat without facing the vicious Black Friday crowds.

Watching out for you everyday.

Eli

 

LA Times "brand" story on Kardashian brand has follow up.

Here is the link to the follow up piece by writer Adam Tschorn. He explores my point of view.

Kardashian a Brand?

 

Watching out for you everday.

Eli

Will quickie marriage (72 days) significantly damage Kardashian brand?

When I started to write this piece my own first question was, why does anybody care? Fortunately or unfortunately the Kardashian Klan have built a nice multi-million dollar business all about nothing or  better known as being famous for being (untalented) and famous.

However, there is enough interest in the question of whether Kim Kardashian had built a real brand or just a marketing fad, flash in the pan. In my opinion Kim has yet to "earn" rights to be called a true brand. Most of her antics are PR stunts (and let's not forget without a sex tape she would be absolutely nothing and we wouldn't be wasting our time on this) and not brand building efforts. Launching perfumes, apparel lines, getting paid to appear at clubs and bars and getting married on a reality show for $17Million doesn't not make a brand.

People are more fascinated with her nothingness as entertainment and not about a vision, a journey or some meaningful element to make people believe something she is offering has any real value. Her deal with Sears is a ridiculous one. Kardashian wouldn't be caught dead in a Sears unless she was picking up a paycheck for an appearance.

Now let's address this divorce business. Maybe had she made it past a year or even six months she would have some credibility. But this 72 day PR game wasn't love or a real marriage. It was a paid for "appearance" event in which she got paid in cash and in kind. Poor guy, hope he didn't really see anything in or have feelings for her. I also hope he is laughing to the bank for all this mess. Although he comes off more of an embarrassment to himself than she does because she is not in the least bit embarrassed about being a shill for anything or everything with a payday attached.

Now you might feel that Kardashian isn't much different than Paris Hilton. I beg to differ. Whether you liked it or not she had a particular way of being, a slogan ("That's hot") and a sense of style (not necessarily one you might like). She acted in a TV show that was somewhat entertaining. Kim Kardashian is a poor (woman's?) man's version of Hilton. Hilton had pedigree for her debutante behavior. Kardashian's father was an unknown until the O J Simpson case (like instant fame, "new" money). The Hiltons have been a fixture in America for years.

Will the business of Kardashian be hurt by this divorce? Likely. It exposed her as having nothing honest or real about herself and her so-called fans will probably feel cheated, lied to, deceived but quickly wake up from their delusion of fascination and become disgusted. No journey here just a young girl trying to make a buck. I would suggest Ms. Kardashian be careful not to spend all her quickly earned cash too fast because the gravy train is likely to end soon.

Watching out for you everyday.

Eli

Consumer darling JetBlue brand suffers due to stranded planes in freak NE snowstorm.

JetBlue apparently faced some major obstacles dealing with the freak October Northeast snow storm this past weekend. In one case in which a plane was stranded on the tarmac at Bradley International in Connecticut for seven hours, it might turn out to be less of the brand's fault and more of the airport.

This past year a Passenger Bill of Rights was passed by Congress to ensure these kinds of incidents where passengers are stuck on planes for ridiculously long hours without food, water or bathrooms would be addressed. The fines the airlines face are as much as nearly $28,000 per passenger for each incident. Hefty to say the least.

Now I am no fan of airline travel these days nor the lack of service most airlines offer a sentiment shared by millions of people around the globe. However, if the latest news is true that Bradley International Airport is mostly at fault, then why should the airlines suffer millions of dollars in fines? What has surfaced includes the JetBlue Pilot's unanswered pleas to the airport to help get passengers off the plane after finding his company could not get the airport to help either. The airport was very slow to react seemingly with little or no emergency preparedness plan in place.

Maybe if the airline turns out NOT to be at fault and it is the fault of the airport and the city and/or state can they all be fined? Could the city and state be subject to lawsuits from passengers? Why not? Airports (run by governments) get fees from airlines to do business so they need to be held accountable, although, as we all know Government, whether local, city, state or Federal seem to not be accountable for much lately.

Until all the facts are known, JetBlue will be taking alot of heat from angry passengers and the media.

Watching out for you everyday.

Eli