The Tom Dougherty Blog



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Where’s the urgency with retailers?

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What does a rise in Macy’s profits of 3.8 percent in the last quarter mean to other retailers? It means this is no time to be asleep at the wheel.

JC Penney and Kohl’s are being mentioned as losers in most of the financial news stories. Can’t argue with that.

macys-department-storeBut what about Sears, Stein Mart, Dillard’s, Belk, Target, Walmart and even Kmart?

If you want to grow business as a retail store, you need to do it at the expense of your competition. I think we all agree with that. But where is the sense of urgency and the absolute need for change in this category? I don’t see it anywhere.

The analysts assert that advancements in delivering online orders are mostly responsible for the good results for Macy’s. To my thinking, this is a thin and fleeting advantage.

As an expert in increasing market share, I can tell you straight out — there is room to take a lot of share in this category. All you need to do is get out of your own way and be willing to reinvent your importance to the shopping market. We know how to do this and yet no one from the category has called us to ask us how. Whoever calls first will win.




Burger King continues to imitate the rest

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In such a ho-hum market as fast food, I am constantly amazed at the ridiculousness of its participants. Burger King, the king of switching out new menu items, recently announced it is going to roll out a new limited-time sandwich called the BK Rib Sandwich this summer.

Uh. Ever hear of the McRib?

What is so bizarre is that Burger King believes it can out-innovate the fast food market. Its executives have flat-out said it. But what they call innovation, I call copying.

ht-bk-Rib-Sandwich-kb-130515-wmain-jpg_164628Let’s look at a couple of other innovative offerings for its 2013 menu: Sweet potato fries and a pulled pork sandwich – both of which can be found at Carl’s Jr. Arby’s have had sweet potato fries in the past. Subway and Hardee’s both have pulled pork sandwiches.

To compete in the fiercely competitive fast food segment, it takes more than trying to out-menu your competition. People don’t eat the McRib sandwich only because they like it. They eat it because it comes from McDonalds and McDonalds has been smart about practically building a mythology around it.

Burger King is currently number three in the fast food market, trailing McDonalds and Wendy’s. To overcome them, BK must stop copying the market leaders and be different and better. Not just in food, but in the way it looks, feels, sounds and acts. Time to get with it.




Sheep are the new stars of a wrongheaded ad campaign

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Sheep are the stars of a new advertising campaign. Not that it’s unusual for companies to use animals to peddle products. Geckos and Geico come to mind.

What’s curious is the company that has decided to embark on menagerie marketing.

Corona.

The new commercials urge consumers to “ditch from the herd“ by showing a sheep-costume clad person standing up and walking away from the rest of the animals.

Next, a hoof slams down a bottle of Corona Light.

7oex~10~620The new spots are a drastic break from the unique, easily identifiable, and nicely positioned “Find your beach” theme that characterized the Corona brand for years.

The switch makes no sense.

In fact, I use Corona as an example of a brand that has done a terrific job separating itself from the competition. “Find your beach” evokes an emotion. It takes consumers to a warm, relaxing place, away from the busy party-time nights that other beers promote.

Most beer marketing mostly consists of a poorly crafted punch line with a product shot at the end.

Sadly, Corona has joined that herd.




Fast food chains now publishing calories

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Imagine your surprise the first time you pull up to a fast food restaurant and find calories listed with each item.

That happened to me at Chick-fil-a recently, prompting the question: Do calories matter?

Yes, they do.

I planned to order a spicy chicken sandwich meal – 920 calories – but left with an eight-count nugget meal, which came in at only 700 calories. I switched my order to save 220 calories.

Slapping calorie counts on menus was not the decision of the fast food chains. The initiative is part of the national health care bill that requires restaurants with 20 or more locations include calorie counts on their menus. McDonald’s was the first to comply in November.

subMcDonalds-articleLargeWe shall see if this honest approach creates positive change for the business of fast food restaurants. I’m not optimistic.

Consider Hardee’s Monster Thickburger: The burger alone contains 1,300 calories. Add a soda and fries, and the meal soars to 2,030 calories, putting a new spin on term indulgent.

My prediction: Publishing calories won’t be good for the fast-food business.




The sixth reason to bring brand into the boardroom

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Ever wonder why brand is important to corporate growth? Check out Jennifer Barron’s “5 Reasons To Bring Brand Into the Boardroom,” in Marketing Daily.

Barron contends that brand is a company’s most valuable asset and a driver of customer purchase. She says brand requires investment and must be aligned with everything the company does.

Most importantly, Barron says brand should not be confused with marketing.

Insightful reasons.

I’d like to add one more: Brand is the best way to steal market share.

Some foolishly believe that discount prices or superior products steal share. Yet prices and products often yield short-term gains and may not be important to consumers.

For example, the iPhone may not be the best mobile phone on the market, but it leads the market because of the Apple brand.

The best way to offer true choice to consumers is to offer a different brand. When everything is equal, as it is in most industries, consumers stay with familiar products.

They will switch only when they see something that is different, a true choice. That’s where brand comes in. If your brand is different and better than the competition’s, you will steal share.




Abercrombie & Fitch misunderstands how brand works

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Someone told Abercrombie & Fitch CEO Mike Jeffries that brand works best when you stick a stake in the ground and clearly identify potential customers.

But Jeffries misunderstood. This perennially hip retailer garnered a fresh round of  negative publicity this week when a book about retail operations, called “The New Rules of Retail” revealed Abercrombie & Fitch were no longer selling any women’s clothes above large or pants larger than size 10. That unearthed a 2006 Salon article in which the tone-deaf CEO said that he doesn’t want large women wearing his clothes.

article-0-1835F871000005DC-81_634x424“In every school there are the cool and popular kids, and then there are the not-so-cool kids,” Jeffries told the online magazine. “Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.”

According to Forbes, Abercrombie & Fitch has remained silent in the wake of this latest controversy, refusing to distance the company from those statements.

Big mistake.

Jeffries should follow Nike’s lead.  Nike’s “Just Do It” brand tells customers that it’s for winners. That’s a select group, but one that any person with determination can join. Besides, everyone wants to be a winner.

That’s the power of the Nike brand.

By being so specific about the weight of customers,  rather than their  attitude, Jeffries and by extension, Abercrombie & Fitch, sound hateful and shallow.

For the record, I’ll take a plus-sized Marilyn Monroe any day over an emaciated hipster.




Has anybody seen Oreck?

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I remember when Oreck was the premium player in the vacuum cleaner business. The company even had its own retail stores. But Oreck never developed a sticky brand.

OreckXL2VacuumNow, it has filed for Chapter 11 protection and is on a familiar spiral into the world of forgotten and irrelevant brands.

Oreck marketed its vacuums as being lightweight and the favorite of hotel professionals. Both ideas, however, are from a distant era when many thought brand was built around a single unique feature and an endorsement.

The unique feature has moved on. Weight no longer matters. Bagless machines with cyclonic action are hot right now.  Some manufacturers – Dyson, for instance – recognize that even mundane vacuum cleaner purchases carry a personal brand value both in terms of its personality and design. Design is worth paying for and is something customers will covet.

I remember Oreck well. To bad it never asked me to care.




Google Glass is fascinating, but not everyone thinks so

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Google Glass is fascinating. It seems to be a case of life imitating science fiction. This wearable computer allows users to take pictures or record video through the lens of their glasses with a simple voice command.

Nearly everything is recorded and posted online already, so Google Glass is simply the next step. Yet the all-seeing product raises serious questions about privacy.

google-glass-wallpaper-hdThe New York Times reports that the West Virginia state legislature is about to consider a bill to prohibit use of the glasses while driving. Private establishments are also being proactive: Some Las Vegas casinos and a bar in Seattle have announced Google Glass bans.

In recent years we’ve become accustomed to hidden cameras: From hood-mounted police cameras that captured Reese Witherspoon’s recent arrest to the retail store surveillance cameras that provided images of the suspected Boston Marathon bombers.

Google Glass can go places that static cameras and cop cams can’t.

That’s troubling. Yet we all know that innovation is hard to halt.

Besides, this technology will no doubt be embraced by members of the Facebook Generation who have eagerly given up much of their privacy in exchange for instant online gratification.

Google Glass is coming. Get ready for your close-up.




Times are changing for Netflix

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It looks like “House of Cards” has paid off for Netflix.

The streaming service added 2 million subscribers with that ground-breaking political series that stars Kevin Spacey.  Quite a leap from the days when Netflix was being outflanked by its competition.

It also marks a change in how Netflix will be perceived. Its brand previously was about a business model. Now its content will draw customers.

ht_house_of_cards_nt_130211_wgThis has happened before.

Remember when TLC was The Learning Channel? Now it features shows such as “The World’s Worst Tattoos,” which are hardly educational.  Broader offerings spurred the network to simply rebrand itself as TLC.

And AMC, which a few years ago was known for airing seemingly non-stop “Die Hard” movies, now pulls in massive viewership with its gritty series lineups that include “The Walking Dead” and “Breaking Bad.” As a result, AMC’s tagline is  “Something More.”

In each instance, content drove the brand.  With “House of Cards” and other promising shows in production, look for Netflix’s brand to transform into something new.

 




What will television look like in the future?

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The talk in our office lately has centered on how the streaming video industry will eventually shake out. Hulu, Netflix, Amazon and many others are already available. Also in the mix are iTunes and cable on-demand channels.

Choices are a good thing for consumers. Unfortunately, there is little difference in content among the current providers. For example, most of what’s streaming on Amazon Prime is also available on Netflix.

6a00d83420a02f53ef016304c9d4dc970d-800wiNow we learn that Amazon is about to unveil a TV box that basically does the same thing as Apple TV, only with Amazon content. This announcement comes just days after Netflix CEO Reed Hastings wrote an exhaustive essay that predicted television will become less about channels and more about apps.

If he’s correct, the war will be fought over content, not technology or even business model. Netflix, coming off an impressive earnings report, has the best model – subscription – but too much of its content is available elsewhere.

It won’t be long before everything will be available via streaming. Question is, which provider will dominate?