Macy's and Martha: Managing an Awkward Brand Moment

May 29 2013

By now, most of you members of the shopping public are aware of the contentious court battle between Macy's and J.C. Penney over Martha Stewart's Home Collection. Now, Martha has a long history of selling different products and product categories with retailers other than Macy's. She produces a line of carpets for FLOR, a number of furniture collections with Bernhardt, sold a lower-end line of paint and linens with K-Mart, and sells home office products through Staple's. It was only the J.C. Penney deal that would have infringed on Macy's, in which J.C. Penney was hoping to sell kitchen, bedroom and bath goods that would compete directly with Macy's. Martha's Home Collection is the anchor of "The Cellar" at Macy's, where the retailer offers up all of its tabletop, cookware and home goods from a variety of vendors. Martha's products are an essential draw that brings customers into this department nationwide. 

So, what was Martha thinking? Did she think that Macy's needed her so badly that they would simply accept her actions? I don't know, but I would imagine that J.C. Penney's was offering a better cut of the profits, important as Martha Stewart Living Omnimedia's earnings are down. None the less, Martha has a history of making some strange choices. Who knows the psychology behind her self-destructive moves, (remember the insider trading conviction, and the ankle bracelet, which are hard to forget)? She has had such an enormous influence over late twentieth sensibilities, home aesthetics, and how we live that one would think that she could rest secure in her enduring legacy, but that doesn't seem to be part of her emotional make-up and drive. She also seems unable to understand that her actions create reactions. Did she actually think that Macy's would roll over?

                            

                                               Macy's Martha Stuart Collection direct mail

Ultimately, Macy's has won the Martha battle, and has handled the crisis in an interesting way. The whole court battle played out in the media, and was never a crisis that was acknowledged or communicated directly between Macy's and their customers. It was simply not addressed, and played out in the background. Now that the issue is resolved, Macy's has handled the win in a graceful way. Hence, the direct mail piece that arrived last week. It doesn't say, "Martha's still here," or "Martha's back." It merely reminds you to come and shop Martha's Home Collection at Macy's; with Martha herself featured front and center on the piece. Very classy brand management, I must say.

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The fate of Brooklyn’s Great GoogaMooga: A food festival not in the making

May 22 2013

        Image via Brooklyn.GoogaMooga.com

After what was reviewed by many as an event failure last year, the 2nd annual Great GoogaMooga festival took place in Prospect Park in Brooklyn this past weekend with promises of several improvements meant to alleviate many of last year’s problems. While promoter Superfly was not at fault for the rain that caused the cancellation of Sunday’s programming, the fact that the event was not called off until hundreds of people were already in line and waiting to enter was frustrating for attendees and vendors alike. The one hundred-plus food and restaurant vendors were left “holding the bag,” with their already prepared foods and lots of it, after preparing additional offerings rather than running out of food as they did quickly during GoogaMooga’s first year. The vendors immediately put out a ‘cry for help’ in New York Magazine by mid-day Sunday (check out the power of social media here), collectively asking the public to patronize their restaurants instead, as their booths had been washed out. The management’s gross incompetence and level of brand mismanagement will hurt the future of GoogaMooga. 

On the other hand, Williamsburg’s weekly Smorgasburg Food Festival has been very successful, offering a variety of local treats in an outdoor setting. Although the food is expensive and lines are long for the most popular offerings, people are willing to pay for the overall experience—unique, artisan, locavore eats in a fun, sunny weekend setting. They do lots of things right, and establishing a sense of community is one of them. Smorgasburg began as an offshoot of the popular outdoor weekly market The Brooklyn Flea, and has expanded in an organic way, rather than starting big. People have watched Smorgasburg grow, and are committed to supporting the local New York based food artisans.

Ultimately, the problem with GoogaMooga is that the promoter failed to fulfill the brand promise, and didn’t come close to delivering what they had committed to, with a resulting damage in brand identity and equity. In its first year, attendees faced food and drink shortages, overcrowding, and frustratingly long lines. In its second year, GoogaMooga put its consumers last, and they felt it. 

 

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Celebrities and Brand Management: The 1% Factor

March 13 2013

After showing up two hours late to a concert at the massive O2 Arena in London last week, Justin Beiber arrived on stage to face boos and harsh criticism from his young fans--many of whom were upset because they were going to be forced to stay out late (past their bedtimes) in order to see his whole show. That same week, Justin was caught on video threatening and yelling profanities at the paparazzi. He also fainted at another concert, and then cancelled an upcoming show on his international tour. Now it seems like we're all just waiting for him to follow along behind many other troubled pop stars, and mysteriously check into rehab for 'exhaustion.'

So is this the beginning of the end of Justin Beiber's career? Probably not. 

In general, I would say that brand mismanagement hurts your brand equity. But for celebrities, this is (yet another) indulgence, or off-brand management, that would not work for brands at large. Because Hollywood loves a comeback story, celebrities can mismanage their brand in a profound way -- the public and the entertainment business is okay with it, because we are as interested in seeing stars come back as we are seeing them fail. Take Robert Downey Jr., for example. Hollywood, the media, and the public have all embraced the handsome, reformed drug addict turned Oscar nominee back in the fold as a respectable and credible actor and box office draw.

So, who then is the other 1%? They are the stars who go beyond the pale, like Mel Gibson. When Mel Gibson said that the Holocaust never existed, he effectively shut the door on his Hollywood career, particularly in an industry where many of the key players are Jewish. The public and the industry were offended, and could not disassociate themselves fast enough. It was not simply self-destructive behavior. It was aggressive and wrong-headed, destruction turned outward rather inward, unlike many stars who crash and burn personally only to return to Hollywood success. Was the public upset when Hugh Grant was caught with a prostitute? Yes. But we forgave the charming Brit, and all rushed to see him in Notting Hill with Julia Roberts.

Ultimately, I'm not worried about Justin Beiber. His young, adoring fans will forgive him. Eventually he will stop acting out, and have another act in his career. Keep in mind, though, that the entertainment industry plays by its own rules. The scenarios I’ve described are not acceptable for brands at large, where it’s essential to be endlessly vigilant about every point, communication and way they intersect with the public and their investors. Can you say “BP”?

          Image via justinbiebermusic.com

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What is a Lifestyle store, anyway?

March 06 2013

A very enjoyable part of my time over the past many years has been spent assigning lifestyle photography, or in developing brand strategy and providing creative direction for lifestyle photographers and photo agencies that represent lifestyle creatives. As a brand strategist and trendwatcher, I'm always paying attention to the marketplace, in particular to the ways in which brand touch points are connected or disconnected where they intersect with their varied audiences and customers. I'm also very sensitive to the language aspect of branding, as my clients well know. Your brand name, the category you use to describe your brand, and the language you use to describe your brand can be as potent as any tool in your arsenal.

On to the category of lifestyle stores. The rise of the uber-lifestyle brand at retail really came to prominence about twenty years ago, with the push forward of stand–alone stores for brands like Calvin Klein, Donna Karan, Ralph Lauren, and Anthropologie. These brands created highly cultivated destinations that offered an encapsulated view of a particular kind of life, one where you could carry the brand home in many forms -- from women's fashion to homewares, like bedding and tableware, to fashion accessories –- all in one place, and not presented in the fragmented department store environment. These lifestyle brands offered product options at different price points, so that you could bring home a twenty dollar cup or a thousand dollars gown. They offered an easy, transporting experience where consumers could easily envision themselves as part of the romantic Anthropologie or minimalist Calvin Klein lifestyle and aesthetic.

Today I was walking down Madison Avenue in NYC, where I passed the well-known card shop and e-tailer, Papyrus. Right there in the window they claimed to be a lifestyle store. I thought to myself, “They are a shop that sells different kinds of paper goods!” feeling quite surprised by their claims. Then I read their window signage, only to find that their definition of lifestyle means that they offer custom printing as well as a full-line of Cranes papers. The outcome: I was let down, and I felt misled.

Folks, this is not what you want when you put your brand out there in public. A basic tenet of brand strategy involves never promising something that you can’t deliver every time. Papyrus is clearly not a lifestyle store. They are a gift and card shop with additional customer friendly services.

The moral: I’m reminding you to think carefully and analytically before you put your brand out there, so that you know what you stand for, and communicate it accurately. This will help you to attract and retain loyal customers. 

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Virgin and the Demise of the Megastores: A Cautionary Tale

February 27 2013

With guest blogger, Cedric Littman, The Cheese Advisor

The Virgin Megastore in Paris has closed.  There has been bad publicity, and the unions have said that there are "too many unanswered questions." One union said,  "We are in a fighting mood. We're not going to go quietly.”

This looks pretty bad for Virgin, a company that presents itself as customer friendly, even customer centric. Virgin’s brand and notoriety has been partly built upon the adventurous exploits of its founder, Richard Branson, who attempted an Atlantic crossing on a balloon and is booking flights to the moon. The Virgin Megastores were the retail face of a brand that was considered to be visionary in its day.

          Image via Reuters

The Virgin store in Paris was bought from the Virgin Group ten years ago, although it was imperceptible to the consumer. Why did Virgin allow its name to be used by another company over which it seems to have no control? Even worse, the company they sold it to later sold it to yet another company, so that the retail operations were further and further away from the core brand, and not under the Virgin brand umbrella and management.   

The Virgin group also sold its retail operations in the UK, the US and Ireland, and all of the outlets have closed with at least one of the parent companies going into liquidation. At its height, the French store, on the Champs Elysees, must have been a substantial asset as it was on one of the world’s most famous thoroughfares. But now one of the most visible Virgin stores, as well as the whole chain, have closed with a loss of 1,000 jobs. How did Virgin make such a mistake?  Surely they saw the demise of traditional music retailing on the horizon, otherwise why would they have sold their retail operations? The real question is why they allowed the new owners access to the Virgin name, logo, store design, and brand equity.

This cautionary tale makes it clear that brands equity should be protected by a little, or a lot, of forethought. Even those of us with smaller brands need to take control and take charge of our brand. We may not face the same problems as the Virgin Group and we may never sell part of our operation, but good brand management is key no matter whether you are a solopreneur, a small business, a non-profit or anyone who puts a product or service or offering into the marketplace. As Beth often says in her talks, perception is all. There is the fact of your brand (where you really are in the marketplace right now) and then there is where your audiences think you are. Although they are a thriving company, the closing of the Virgin Megastores (albiet by a third party) would leave their audiences with the perception that the company is out of step with their needs, and that the business itself is in trouble.

The message: Protect your brand equity. Learn how to do it from an expert, and then don’t forget to continue to pay close attention to your brand as time goes on. After all, you have too much to lose. 

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On Diamond Watch

January 17 2013

Marilyn Monroe could not have imagined it when she starred in How to Marry a Millionaire, or in Gentlemen Prefer Blondes. She didn't ever know that a company named Swatch existed, coming to prominence in the 70s with disposable fashion poppy plastic watches. She certainly wouldn't have thought that one day Swatch would add the company she invited to "TALK TO ME!" in "Diamonds are a Girl's Best Friend" to their stable of companies.

Yesterday, it was announced that Harry Winston, the renowned Fifth Avenue jeweler known for their fabulous and fabulously expensive diamonds, had been purchased by Swatch for the tidy sum of $750M. That could definitely buy some ice! I learned that Harry Winston was the first jeweler to lend beautiful baubles for a walk down the red carpet at the Oscars in 1943. And interestingly enough, that they also own Omega watches. Harry Winston is apparently going to focus on diamond mining rather than retail sales, and so was open to being purchased.

Now, I totally understand why Harry Winston might want to get out of the retail business, and focus on mining and supplying high quality diamonds to other jewelers and wholesalers. No doubt it makes sense from a bottom line perspective, as they already have a tremendous amount of brand equity after years of adorning celebrities and socialites. To me, the interesting part of the story is that the choice they made was to sell to Swatch, a company that is looking to expand into the high end of the market (or way high end). It's almost as if they abandoned the brand by selling to a buyer with no real credentials in the uber luxury market.

Established brands sell for many reasons and to wildly different suitors. Family businesses in the third generation are frequently uninterested in carrying on the family business, or want to expand beyond what is possible with their existing capital. That is what happened with Kiehls, when they sold to L'Oreal for an estimated $100 million. They simply couldn't build out the brand, or service the customer in the way they were known for, or move squarely into the global economy and 21st Century without an influx of cash, and so decided to sell.  I don't know if they had to sell, or chose to sell their venerable brand. And I don't know generationally about Harry Winston, but I am a bit curious about this particular suitor winning their hand. What would Marilyn say? 

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