Tis the season where many retail advertising makes or breaks the retailers themselves. That’s why Stealing Share has been offering suggestions and criticisms for the industry lately.
It’s a market that’s simply a mess. NBC News recently reported that a handful of retailers may announce closings unless this season’s sales drastically change things. Shoppers are increasingly shopping online. That’s a problem for retailers because Amazon owns that space.
The simply fact of the matter is that retailers are in this quandary because they thought they could exist on low prices and relative convenience. Turns out that shopping on Amazon is more convenient and offers the better deals. Who knew?
Shoppers also buy based on brand. And, right now, there is so little loyalty among consumers to those brands that the new parlor game is figuring out the order of retailers going belly up.
Most ignore retail advertising.
The news gets worse. The YouGov BrandIndex reported that almost half of all large retailers are seeing their retail advertising awareness drop from a year ago. Kmart and Best Buy suffered the biggest drops, but the whole slate of retailers have lower retail advertising awareness.
A bit of caution here. Awareness is one thing. I’m sure most people know of Kmart and Best Buy. What meaning they gather from those retailers is what creates preference, the more important factor.
But low advertising awareness means that those ads are not resonating with consumers. They are simply ignored. And they should be.
The one retailer whose retail advertising is resonating is, get this, Amazon. That’s partly because its new spot – A Priest and Imam meet for a cup of tea – is unlike anything else on the airwaves. It hits a political and social nerve that no other retailer would ever attempt.
But it’s also because Amazon means something to consumers. What does Macy’s mean? What does Old Navy mean? Bed, Bath & Beyond? Any of them?
We can help. Call us. But it means being honest in your own advertising and brand evaluation. Otherwise, the doom and gloom continues.
Retail advertising awareness drops was last modified: November 28th, 2016 by Tom Dougherty
McDonald’s is testing a new menu option in central Ohio that is sure to raise some eyebrows as well as the temperature in some consumers’ mouths. McDonald’s is offering a spicy new Sriracha Big Mac and Sriracha dipping sauce for nuggets and fries.
McDonald’s says it is a way for its culinary team to fulfill the desire for the “next great innovation in food experience and taste.”
No offense McDonald’s, but I doubt your customers are coming for your next great innovation.
This is yet another example of McDonald’s not getting it. There are fewer McDonald’s fast food customers. Statistics show kids are eating fewer Happy Meals. Something like only 1 in 5 Millennials have ever eaten a Big Mac according to a recent internal memo. The fast food category sports so many better alternatives now. Thirty-second hamburgers and fries don’t seem to make a whole lot of sense to a lot of folks anymore.
The Sriracha Big Mac tactic doesn’t make much sense.
So McDonald’s wants to lure a new generation of consumers, most of which have never even eaten a Big Mac, to suddenly care about the Sriracha Big Mac?
The chain has sagging same store sales and consumers fleeing to the likes of Five Guys and Smashburger, Chic-Fil-A and the rest, who marvel at how stupid McDonald’s must be to think that a spicy Big Mac is the answer.
Let’s be totally honest, McDonalds is not going anywhere anytime soon. It will close some stores and sales will continue to be sluggish, but menu alone will not make or break McDonalds.
Menu is not a strategy, it is a tactic. Any menu changes must be part of a larger promise (the latest Madison Avenue advertising tagline is not it). Until it understands that and fully embrace the larger promise, the situation won’t change. McDonald’s will have more stories of sluggish sales and failed turnaround strategies.
A Sriracha Big Mac won’t fix the problem was last modified: November 16th, 2016 by Tom Dougherty
A funny thing has happened of late. The Microsoft Surface has re-emerged as a serious threat to Apple’s iPad.
I realize this is all blasphemous on my end. With me being an Apple stockholder and top tier fanboy. I am maniacal about the Apple brand. I still have my first Apple 2E safely stored away at my house. In a protective case, mind you. I also store my first iPhone in the dash board of my car. I don’t even use it, but I have comfort knowing it’s there.
So, for me to even ponder this idea is crazy enough.
Just consider what Microsoft Surface has on the docket. The first of which is the Surface Studio — a cinema display that can be transformed into a desktop studio (this has to be an art director’s dream). Microsoft also sports a Surface Book and Surface Pro 4.
All told, the Microsoft Surface products look as exquisitely designed as Apple’s, but with a greater dexterity (they are all both a computer and physical creative surface). What’s even greater than that is Microsoft’s decision to brand its devices to the creative professional. That, my friends, is how to steal market share.
Microsoft Surface just needs a brand.
This hasn’t always been the case. In fact, several years back I wrote about the Surface 2 and how its launch highlighted the unemotional. Back then, the Microsoft brand stood for over complexity (just the opposite of Apple). It was all about the gizmo, not the customer.
A year or so ago, I had brushed upon the idea that the Microsoft Surface was a wiser business choice over the iPad because it had greater functionality. But I still wasn’t committed to the idea, because even then, Microsoft hadn’t found it’s voice.
That isn’t the case any longer.
With the banality that surrounded the latest Apple event (where the reimagined MacBook was unveiled with the vigor of Eeyore), there is opportunity for the competition to make some noise. Apple still holds the throne because of its brand. But if Microsoft can take off its cloak of complexity and grab an emotional stance, it’s got the hardware to back it up.
Microsoft Surface a true threat to the iPad was last modified: November 8th, 2016 by Tom Dougherty
Malls are empty, traffic is down 5.8% from last year nationwide. Consumers spend their money on experiences (hold that thought), such as dining or travel rather than shopping. And too many retailers count on bountiful holiday sales to save their year.
What the retail industry truly needs is clear: Department store rebranding— a complete rethinking of the model.
It is worse and more desperate for major department stores. They will become extinct. This is especially the case for the legacy department stores. In a nutshell this is the entire argument for department store rebranding. Change now or die.
Amazon in particular and the web in general is the new normal for shoppers, dominating the retail industry. Amazon dominates by being an online portal for items ranging from electronics to toys to apparel. You would be hard pressed to find anyone who has not purchased through the online giant.
Department stores. What’s next?
So what are retailers to do? More specifically, what are department stores to do? There are all sorts of tactics they can employ to stem the plunge of market share. But they will fail.
Department store rebranding from the ground-up is a needed strategic decision and not just a tactical one. Without this complete overhaul of department store rebranding initiatives and the total repositioning this means the vaunted old brands are finished. And finished soon.
We’ve dissected many retailers, including a report written for the Retail Customer Experience which encourages retailers to merge their in-store and online personalities.
We’ve also said “stop trying to be everything to everybody”. But tactical changes won’t save department stores. They need strategic change. They must redefine the value proposition for the target shoppers and convince them that their brands are relevant.
Department store rebranding restores relevancy.
One way you recapture relevancy in a market — and even succeed — is rebranding. Department store rebranding pulls them out of the ditch because, done properly, they are meaningful to target audiences. And the store is more important than simply restating product or category benefits.
Without that preference, no tactic or strategy can ensure the brands future success. If you are a department store, rebranding is the only way you can survive.
Rethinking is more than just rebranding department stores and their messages.
Rebranding department stores is more than just a new name, logo and tag line. It is fundamental change— real changes in operations and structure. Changes implemented to magnify and support the new brand strategy.
Even traditional rebranding does not go far enough. Retailers must rethink everything.
The market, especially those large department stores like Macy’s, Belk’s, JC Penney, Harrods, Bergdorf Goodman, Lord & Taylor, Bloomingdale’s, Sears, Debenhams, Meijer, Von Maur, Boscov’s, The Bon-Ton, and the like, are sliding into irrelevancy and, in many ways, are already irrelevant to the new shopper.
Shoppers vote with their dollars. And the department stores feel like they have passed their own time limit on this earth.
Probably right. Department stores: Be something different than what you are today. That’s how you survive. The ongoing sales promotions and specials that you rely on don’t do the trick. Black Friday won’t save you.
Their stores are overcrowded with product, there are no sight-lines, crowded shelves does not say variety rather it creates a feeling of being hurried. As a result shopping for apparel is boring at best and harried at its worst.
Department store rebranding for experience.
Remember, earlier on when we spoke about consumers spending money on experiences? Shopping in department stores is mundane and it does not get the pulse rising. Part of department store rebranding is to revitalize the experience and make it deeply personal.
It’s especially problematic for women. There is more selection and yet more difficulty in finding clothes that both fit and are appealing.
Men walk into a store, know their inseam, waist, arm and neck sizes and, voila, there is a suit. As a result, men are free to purchase based on the look, style, price and brand. They find what is available in their size and they buy it. Minor alterations are acceptable and easy to accomplish. Many times, off the rack is a real phenomenon.
Women shop on size and department, which varies by store and by brand. Go into a Macy’s, for instance, and find a size 4 that’s a size 2 at another department store. It’s even worse than that. Shoppers shop in that same Macy’s, find a size 2 that fits and another size 2 that doesn’t.
That variation in experience is confusing and…dull. Women look at overcrowded and jammed racks in poorly set up departments. And all this to find a garment that appeals to them aesthetically.
As a result they are forced to search the jammed racks for that design or style in their size – even though they know that label size is no guarantee of proper fitting. This means they try on everything and sort through all sorts of retail disappointment. This is not an experience. It is a nightmare.
That’s not shopping, either. It does not translate into purchases. That’s solving the Pythagorean theorem.
An example of rethinking everything at department stores.
Large department stores must rethink everything, from their brand to their operations to really rebrand effectively. Rethink the in-store experience. Attract more women shoppers. REAL preference is job number one.
Ladies apparel is a $225 billion business; so preference, not just dropping in, is immensely profitable and increases relevancy in a dying industry. It is optimal to make the department store the destination. And not just for Christmas.
Is the solution transitioning to on-line?
That still raises important business facts. Department stores own large amounts of real estate. They have expensive long-term leases. What does it do to profitability if the great department store chains are forced to retreat and rely on web sales only?
Can they survive that sort of apocalypse? There is another answer. There has to be.
If the Amazon model IS the future then bankruptcy and chapter 11 is the interim step to treading water and waiting for the merciful euthanasia. Any numbskull can suggest the move to on-line sales.
The problem is it won’t work with the current structures. Department stores desperately need an answer that lets them protect the brick and mortar investments that revitalizes shoppers today and in the future.
Success leaves clues. Shoe department retailing.
So back to the problem of finding the right fit. That is not a problem when shoppers shop for shoes or handbags. Consumers easily see what’s offered without the clutter, find the style they like in the right size and are off with it.
Shoe sizes are universal. The shopping experience is positive. Shoes are displayed on roomy racks and displays and the shopper scans all the shoes (including style, color and form) and then the shoe salesperson bring the shopper the shoes in their size.
Funny how simple it is. How civilized the experience, despite being in the morass of other crowded and jammed departments of clothing.
Why can’t women’s apparel be like that? Department stores rebranding is possible building on that successful model.
Rebranding requires retailers to rethink their stores operations and how technology is utilized. Sadly, the highest level of technology in retail today is a copy of Amazon’s model. Order online and pick up.
But apparel is a different animal, especially in women’s apparel. The sizing of women’s garments is useless. A standard that unifies sizing everywhere sounds like the big answer. Is it?
Yes, absolutely. The sheer amount of returns because clothing does not fit is an issue for Amazon too. There is no regulatory agency to govern sizing so that changes takes real effort from the industry.
Use digital tailoring software. Make the experience personal.
Instead, we recommend retailers of women’s apparel adopt the sizing structure that works in the shoe department model. That is, just use measurements. Display style samples and have sizes in the back warehouse.
Even that is unmanageable because women, unlike men, don’t share a basic shape.
However, the playing field changes as shoppers provide a profile of their exact measurements. Can high-end apparel stores digitally measure the consumer and privately store those measurements in a private file? Of course they can.
Is it then possible to alter custom fit clothes to their specifications? Yes, but that is not the best model. Executing that on a mass scale so a Macy’s or Dillard’s use it is a challenge.
Department stores can afford to automate it. Do it digitally.
As a customer visits your store for the first time, direct them to a private dressing room and digitally scan their measurements. Their exact measurements are stored in their personal and branded app.
As customers shop in the newly designed departments with newly redefined department titles based upon lifestyle rather than the traditional Juniors, Petite etc., departments. Shoppers can look at every offering, all displayed in a size 4. They now shop by cut, fabric, color, brand and style. Not size because only one size needs to be on display (just like the shoe department model we discussed earlier).
The convenience of their smart phone is utilized, They scan the code of the item of interest and the app stores the choice. The store is no longer jammed with every offering in every size. The result? The branded experience of shopping is civilized.
The racks are not crowded and the styles themselves are highlighted. The retailers use their merchandising skills to highlight offering. Suddenly, there are sight lines in the department store and an opportunity for the retailer to practice their skill at displaying wares and merchandising.
How it benefits you.
Here’s how this complete department store rebranding works. Simplify the offerings on the store floor much like high-end retailers. Customers actually see the garments in lengthy and leisurely glance. Consumers develop a digital profile on their measurements that is part of the retailers database. Because you know them and they now know you, a relationship is established.
When they return to the department store, consumers open the app to say they are in the store and what, in general, they are looking for.
If the garments are bar coded by actual measurements, then a warehouse employee gathers those garments in real time from the back warehouse (remember the shoe model) that actually fit that customer.
When shopping is done, the shopper tells the app and are assigned a dressing room. The promise is that, in 10 minutes, everything they scanned will be in their dressing room and in their size.
Better yet, customers could use the app to say they are coming to the store and to get their personal rack ready and pre-placed in a dressing room.
Think about this. If implemented, it creates a preference for the department store brand (which reflects the change in the retail experience) and a database is established to enable more effective buys from designers and better PERSONALIZED service (read how affinity programs fail here). The customer chooses if they want the clothing in the dressing room or if they require human assistance.
The newly branded department store experience.
The new experience reconfigures the department store experience and decreases the display space and increases the warehousing. It requires an investment in logistics and warehouse systems.
But the new department store is now an adventure in experience and we know that customers covet that. The department store rebranding process combined with new thinking provides new preference.
Think it’s not possible? Amazon can do it, and Amazon is the retailer that terrifies the rest of the industry. The online retail giant, who just announced plans to open brick and mortar stores, is threatening to take over the entire industry while its players stand still and watch.
Amazon transports product anywhere in the world overnight. Is a tight logistics system that creates in-store logistics providing results in 15 minutes impossible? Believe that and you are doomed.
The future in department store rebranding is in personalized automation.
All it takes is an automated, software system that makes it easy to find the right clothes at the right time from your warehouse space. It, therefore, allows the shopper to buy and shop based on taste, style and color, just like they do with shoes and handbags. It means sales improve because shoppers see the entire inventory.
Plus, in the spirit of discovery, the store adds a few surprises— a few alternatives for that shopper based upon the customer profile and design preference. All of this accomplished by an algorithm.
Department stores, don’t get caught up in — “That can’t be done.”
Change or die. That’s the simple truth. This is just one idea. The point is that department store retailers, whether they are in apparel or not— let go of age-old habits. Dead brands are full of leaders who once said, “That can’t be done.”
Department store retailers must do two things. 1) Consider a total rebrand because few retailers position the brands against the competition and as a result are not meaningful enough to target audiences. (Here’s how we rebrand for our clients.)
2) Rethink everything. Ask the right questions in brand research that goes beyond simple usage and attitudes. The current model is a rapidly dying one. And given the current trajectory, there will only be room for one of the major department stores.
There is a third strategy retailers can adopt (and many are). Do nothing and watch Amazon destroy your business. But, as in most things, victory belongs to the first mover.
Read more about the retail market and department stores here:
Macy’s declines in market share and revenue because department stores are holding onto a model of the market that no longer meets the needs of shoppers. Competition is everywhere and shoppers have more choices than ever. All too often, these choices seem better than the traditional department store model.(Read a market study of the retail market here)
Many of the brands that stores like Macy’s rely on for magnetism (attracting shoppers into the store) have recognized that the worm has turned and are pulling their brands form the retailers. Like Coach, for example. Even Michael Kors has decided not to play the game anymore and has asked retailers to stop couponing and discounting their products.
Macy’s declines can be predicted by looking at the world of magazines
I think you can see a corollary to Macy’s declines in the periodical market back in the late 60s. All businesses naturally seek economies and the broad-based and horizontal magazines like Look and Life found it increasingly difficult to attract advertising dollars. Advertisers learned that it was more effective to spend their dollars in vertical publications that mined the exact consumer they hoped to influence.
The magazine world learned a lesson in focus and these once heralded magazines folded up and went away. Meanwhile, there was a rise in vertical publication advertising because, if you wanted to sell bird seed, it was smarter to buy a small add in Bird Lover magazine then spend for greater subscription numbers in Life magazine.
Today’s world is about focus.
It was all about focus. It still is.
Today’s shopper is accustomed to laser-like focus. Some retailers even specialize in clothing of a particular color or style. Others specialize in a demographic segment or price point. At the end of the day, shoppers are placing a premium on their time. Wondering through a department store to locate only what you are looking for seems like a fool’s errand.
Times are different and the desire for greater focus will remain for quite some time… until a broad nostalgia for the experience of bygone times surfaces. Macy’s declines and Belks’ failures can’t wait that long. My suggestion is to split off the departments as separate brands and run them independently. It’s how you retain value for your shareholders but asks for great pain from the traditional department stores in the transition.
Those retailers won’t do it. They will stick their heads in the sand and maybe invite a new branding initiative. (Like Belks did. It got a new logo with no new meaning and no new customers from the effort.) That initiative will be confusing and without new and improved brand meaning.
Macy’s declines in importance. Tip of the iceberg. was last modified: October 25th, 2016 by Tom Dougherty
Personal branding forms unbreakable bonds Personal Branding
Personal branding is the most overused and most misunderstood of all the branding jargon I come across in my job title (Brand Strategist).
Luckily I have never been asked to work on a personal brand in my professional career.
The whole ...
Rebranding Do’s and Don’ts for marketers Rebranding is an effort that shouldn’t be taken lightly. That’s why, when the decision to rebrand is made, it should be completed with honesty and no holding back.
Many don’t choose that route, however. Most rebranding is actually just a refreshing ...
Cree LED lightbulbs have lost brand power Cree LED lightbulbs. An Example of surrendering initiative.
For Stealing Share, Cree LED lightbulbs is in our backyard. I follow the company because it is great to see a local company innovate and win.
I remember a few short years ago, Cree was ...
301 South Elm Street
Greensboro, NC 27401