The Tom Dougherty Blog



Posts categorized “Retail”

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.




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.




Frozen Yogurt: A category of followers

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This week brought a wonderful change in weather. The winter chill slipped away and gave way to warmth of spring. This prompted a hankering for just one thing: frozen yogurt. Finding some wasn’t hard. Frozen yogurt is everywhere.

Chains like Menchie’s and Red Mango pepper our shopping centers, where once TCBY and Columbo were our only options.

Having a wealth of frozen yogurt options is convenient, but is there a difference between the chains?

Actually, no.

Here’s Menchie’s promise: “Guests will be able to go to Menchie’s anywhere in the world and enjoy exactly the same experience every time: quality service, a quality product, a happy environment, a warm and friendly design, and cleanliness.”

Take a look at the mission of Taste: “[an] energetic and friendly environment, where you can experiment with your yogurt and share a unique experience with family and friends.”

Now check out Sweet Frog: “Our goal is to create the best frozen yogurt experience you’ve ever had! You create your own combination of delicious soft-serve frozen yogurt, then top it off with any toppings you choose!”

These banal – and interchangeable – mission statements go on and on.

A rapidly expanding category such as frozen yogurt is rich territory for a company that wants to be different, better and unique. Yet the lazy frozen yogurt market simply caters to location, convenience, cleanliness and superior ingredients — what we in the branding world consider simple table stakes.

The ability to steal frozen yogurt market share will come to the franchise that figures out why its product is truly superior to all the rest.

 




A Barnes & Noble split means more work for the brand

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Barnes & Noble Chairman Leonard Riggio is making a bid to separate the company’s retail and online businesses.

Question is, how will this effect the Barnes & Noble brand?

Investors are clearly heartened by the announcement. Stock in the company jumped 17 percent simply on rumors of the move. Investors seem to see Barnes & Noble’s split personality – half retail bookseller, half online retailer – as a negative.

They may be right business-wise, but a division like this could hurt the brand.

Ostensibly, the split would allow greater focus on each segment of the company. But it could also feed the perception that this is a bi-polar business.

A lot depends on the moniker. If the Barnes & Noble name stays with both ends, the company will continue to be seen as one by the public. Any inconstancies in how the two businesses are run have the potential to hurt the entire company.

Barnes & Noble should proceed with caution. If the split takes place it’s critical that the two ends of the business adhere stringently to brand standards. Every detail matters when creating brand preference.

Slip up and Amazon is the winner.




The mistakes of JCPenney

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It wasn’t long ago that JCPenney CEO Ron Johnson, the former head of Apple’s retail stores, was rumored to be on the verge of being sacked after just a few months on the job. It was too soon to make such a drastic move. Johnson’s strategy needed time to play out.

Well, it’s played out.

Johnson’s concept of “fair and square” pricing, meaning JCPenney would not discount, led to a new logo. More importantly, it was positioned against a retail market that constantly discounts. The CEO was was banking on consumers who believed that a discounted price was the real price, and that they were being gouged when merchandise was not discounted.

It hasn’t worked. The retailer just announced a $427 million quarterly loss and same-store sales drop of a whopping 32 percent from last year.

Johnson obviously miscalculated when he pinpointed what he thought was an emotional trigger for shoppers. Turns out it wasn’t emotional at all. In fact, a trip to a JCPenney store, as documented by Matthew Yglesias from Slate, demonstrated that the store hasn’t changed much either.

Johnson failed. His emotional trigger – that other retailers are not honest – was a pricing story, which is rarely emotional. In fact, even an advertising campaign that showed an item being sold for less at JCPenney than in a competing retailer didn’t arouse anger in shoppers. The ad was positively cheery.

The JCPenney brand, therefore, became unimportant and flat.

To his credit, Johnson had a coherent strategy in a market where few retailers even try. I mean, what exactly is Sears’ strategic plan?

Unfortunately for the new CEO, this was the wrong strategy. On top of that, it was poorly executed.




Google Stores may not work for the Google brand

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Rumor has it that Google will soon be opening Google stores, much like the ones operated by Apple and Microsoft. The move sounds good, because tech brands such as Apple have successful with this approach.

But Google isn’t Apple.

The main question is what products Google would carry in these stores. Perhaps the stores would feature phones and tablets that use the Android Mobile OS. Or set-top boxes and televisions that utilize Google TV. It might sell Chromebooks and Chromeboxes or use the outlets to demonstrate the company’s much anticipated “Project Glass.”

The retail result would likely be products associated with Google, but manufactured by others. Its Nexus tablet, for instance, is built by ASUS. Android tablets and phones are produced by a variety of brands. The set-top boxes running Google TV are built by Sony, LG, and Vizio. Google Chromebooks are made by Samsung, Acer and HP. The Chromebox is made by Samsung. Right now, the only uniquely Google product would be Project Glass, the glasses with a a monitor inside.

There is a reason Apple stores work. Its brand has a distinct personality, the products are all Apple brands, and the retail experience is unique.
very distinct.

By contrast, Google products are already sold in stores like BestBuy, Walmart and Target. This widespread availability of Google items makes the concept of an all-Google retail store problematic.




Apple did Walmart a favor

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When Apple’s iPods, iPads and iPhones started showing up in Walmart a few years ago, the natural question was whether their availability at the place that promises low prices would hurt the Apple brand.

This is an even more relevant question with Walmart’s announcement that it has a no-contract, unlimited calling and texting plan in partnership with Straight Talk Wireless when customers purchase an iPhone.

Walmart brand Apple brandPurists will see this as another sign of a failing, post-Steve Jobs Apple. But they are wrong. Apple has the strongest brand in the world.

Beyond that is the specialty vs. mass-market question. For premium brands, the medium is as important as the message. Logically, if products are sold at a place like Walmart, they are associated with low price and, probably, lower quality.

But Apple has two other things going for it:

First, Apple does not discount its pricing at Walmart.

Second, Apple did not launch its products at Walmart. The Apple Stores came first, which is an important distinction. Apple didn’t enter Walmart until it had already established itself as a powerful and premium brand.

In effect, Apple helped the Walmart brand, which now has permission to sell other premium products. It could now sell luxury furniture at a lower cost and the furniture would still be seen as high-end.

In this Apple-Walmart marriage, Apple got greater distribution and Walmart got the aroma of premium. It was the best of both worlds.




News gets worse for Best Buy

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Tough times continue for Best Buy. The latest news is that the company’s cash-flow expectations were lowered because payments on inventory had to be made earlier than expected.

This was not Best Buy’s fault. It received inventory sooner than expected and had to pay for it sooner too. But this perpetrates the negativity surrounding the Best Buy brand.

Best Buy BrandThe overarching problem with Best Buy is that nothing has been done to stabilize its brand. On top of that, the company refuses to adapt to the changing competitive landscape – which brought down Circuit City – and is fending off takeover bids from founder Richard Shulze.

The Best Buy brand extends only as far as one of its blue-shirted employees can take it. Online retailers have been devouring Best Buy’s market share. That cannot be attributed only to the overall woes of brick-and-mortar stores. Apple outlets, by contrast, are packed with customers.

The responsibility of any company with brick and mortar is to create enough of a brand that it becomes a destination. Best Buy should reexamine the experience its brand creates and figure out why it is no longer meaningful to its customers.

Why does the Best Buy customer use Best Buy? Why do others reject it? Who does the Best Buy customer believe they are? How does Best Buy reflect that? Is the Best Buy customer seeing Best Buy as easily interchangeable with other stores like Target or Walmart and what is driving those feelings?

These are important questions. The fact that little has changed at troubled Best Buy indicates that the critical questions are neither being asked nor answered.

Best Buy’s future is gloomy, unless it examines its brand closely.




Macy’s has the perfect, ridiculous gift for those who get brand wrong

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Just in time for Christmas Macy’s has unveiled a new fashion item that marries apparel with technology. In select stores now are men’s fleece sweaters from Sean Jean that feature a video screen – an iPod of sorts – embedded in the left sleeve.

Macys brandThis melding of fashion and technology, as Macy’s calls it, enables the wearer to watch a video as he’s walking with friends or out on the town.

This might seem to be the epitome of brand. But it’s not. Brand is how the customer sees himself, not how others see him.

Middle-aged men, for example, don’t buy sports cars so the neighbors will think they are cool. In fact, the neighbors may regard an old guy and a hot car as ridiculous. Instead, sports cars make men feel young, especially when they’re in the midst of a mid-life crisis. That’s the definition of brand.

Consider this: We all buy brands that no one sees. We prefer a brand of underwear that no one sees. Or a type of laundry detergent no one sees.

Macy’s odd marriage of fashion and technology is a fad, at best. Video sweaters don’t tell consumers who they are when they sport one of these hybrids.

If anything, these hi-tech items simply scream “show off.”