Cree LED lightbulbs have lost brand power

Cree LED lightbulbs. An Example of surrendering initiative.

Cree LED Lightbulbs
Cree was a growth stock

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 the darling of Wall Street. Charles Swoboda, Cree CEO and President, seemed to be interviewed and featured everywhere.

2012 was a heady time for Cree. In 2013, Cree LED lightbulbs were King of the Hill.

Innovating its way to the top of the class and the news promoting LED bulbs as an eco-friendly and promising technology turned the incandescent bulb market on its head.

Cree LED LighbulbsLED bulbs have low heat, low comparative wattage, long life and more energy efficiency than the florescent bulbs that heretofore dominated the eco section of the market.

Cost and quality of light were the only downsides to LED bulbs. Often as not, they had a white-blue brightness that lacked the warmth of the incandescent bulbs that take history all the way back to Edison.

LED lightbulbs have become mainstream

Cree LED Lightbulbs The holiday lighting market transitioned from incandescent mini bulbs to the eerie, almost alien looking, LED strings of holiday lights just a few Christmas seasons ago.

They caught on despite the cost because of a longer lifetime and the ability to connect so many strings together that Clark Griswold would have lit the entire city without an electrical drain.

The transition to LED Christmas lights is almost complete. It is hard to find the old style mini lights today. The price is still steep, but it is more manageable.

You would think this is all good news for Cree LED lightbulbs. First movers have an advantage and the market now embraces LED lighting.

Just look at the displays at the big box do-it-yourself stores. The LED bulbs are featured more than the rest.

Cree LED lightbulbs have a retailer problem

One huge problem stands in the way of Cree however. Its bulbs are NOT featured at retailers. They are lost among the crowded competitive LED offerings.

What happened?

Cree LED Lightbulbs stock chart
Cree has been in rapid decline since 2014

I quote Mr. Wonderful from Shark Tank as if he was speaking to the engineers who pushed the envelope for Cree LED lightbulbs. “What’s to stop one of the big guys from waking up and crushing you like the cockroach you are?”

It is a fair question to ask in 2013. Today, with the current marketing, you can ask if it is too late?

The Cree advertising is top shelf. Well-produced spots featuring Lance Redick (you might remember Lance as the very deliberate Lieutenant Cedric Daniels from the HBO series The Wire). The problem is that the advertising campaign is fixing the wrong problem.

Watch the above advertisement and ask yourself what the advertising is intending to accomplish? The commercial obviously intends to laud the category transition Cree led. It informs the customer that the Cree LED lightbulbs were on the forefront of this movement.

They want us to know— borrowing from the copy, that the humble LED turns the lighting category on its head and that they (Cree) – told us so a while ago.

Nice clean TV spot. It might even work if being first in the category mattered a jot to the shopper today.

Cree LED lightbulbs need a new rebrand strategy

Stealing Share would not have created this strategy. It is an inside-out view of the market. Looking outside-in is the foundation of most of our business. Companies look at their own stories, decide what they feel is important about their own brands and then force fit that idea into the marketing and advertising.

Cree LED Lightbulbs
Where should Cree position the brand in this crowded space?

It is too late for Cree LED lightbulbs to regain preference? Is it too late for Cree to be doing this? The market is mature. Innovation in LED brightness, longevity or eco-friendly claims do not drive the market. PRICE drives it. Cree needs to rebrand (read a an example of a rebranding strategy for another troubled category here).

The current campaign only helps build the category. It sells the viability of LED lightbulbs. Anyone who has studied advertising communications knows that, in communications that builds the category, the advantage ALWAYS goes to the market leader. Sadly, for Cree, it is not the market leader. Not anymore.

The retail space is full of competitors to Cree LED lightbulbs

Look below at the offerings in LED bulbs from Home Depot and Lowes.  Cree LED lightbulbs is an afterthought. Giants in the industry like GE, Sylvania, and Phillips dominate the shelves. These behemoths not only control the shelf space, they also control the price point.

Cree LED Lightbulbs
Cree is lost in the big box stores

As a consumer decides to choose an LED bulb as a viable replacement item, does Cree believe the customer will have second thoughts about trusting any of the BIG BOY brands? Is there any chance that these name brands are seen as an inferior product? Do consumers care who brought the first viable LED bulb to the market?

Cree LED LightbulbsThe entire Cree LED lightbulbs advertising campaign has only one hope. You must feel so guilty about your preference that you want to switch to Cree.

The campaign asks you to reward the brand that first brought you the LED idea.

Even if the retailer has a smaller selection of Cree products and they might be a few pennies more expensive. Even though the original idea was expensive and the light was blueish.

Any brand named Edison would be an instant winner if that train of thought was correct. There is heritage for you. I’m not claiming to be the smartest guy in the room (research corrects that failing). I don’t know yet what the highest emotional intensity in the category is. I am not sure what incites a shopper to change and prefer the Cree LED lightbulbs.

But I know that the answer is knowable. The entire Stealing Share process aims to discover that trigger and position the brand to own that value. It is HOW you steal market share.

Real lessons here for us all

The lesson here is to not let your engineers dictate marketing and brand strategy. Don’t drink your own Kool-Aid. Don’t take an inside-out view of the market (navel gazing) and never leave the strategic brand point of view to the advertising agency (no matter how talented).

Even if they are good at what they do (and I believe Baldwin& is very good) agencies create advertisements and they don’t create robust brand strategy.

Cree LED LighbulbsThis market is mature and yet is growing at a blazing pace

The sheer power of the competitive set and the gravitational pull of lower pricing outweighs first mover advantage.

An upstart and innovative company is not a place for this strategy. The Cree brand is now outmanned and outgunned.

Today, Cree LED lightbulbs need a message that overcomes those barriers.

Cree. Light a better way (is NOT the answer).

As a symbol of all that is wrong, the theme is clever in its double entendre and  FEELS like an advertising theme-line. As such, it lacks powerful meaning and authority.

Cleverness always seems contrived and cliché.

Powerful brand themes are often a bit awkward because they strike the prospect as important and direct. They are about the customer, not the product. They seem authentic, not clever.

Maybe one of the most powerful brand themes of all time is great advice for Cree. Think different.

Lowes Home Improvement gets too silly

Lowes Home Improvement just launched a new campaign called “Make your home happy.” The spots feature a talking unicorn and flamingo in a manicured lawn. The flamingo ad talks about a 1-year guarantee on plants and the unicorn ad talks about Lowe’s Personalized Lawn Care Plan, although I had to watch it a couple of times to figure that out. The ads try to bring a humorous touch to Lowes Home Improvement as it is the beginning of the busy season.

Lowes Home Improvement
It’s hard to take Lowes Home Improvement seriously.

The problem is that the positioning is all wrong, especially in terms of tone. Lowe’s chief rival, Home Depot, has been hitting the same messages for sometime now – either a version of “Let’s Do This” or “More Saving, More Doing” – with the very serious voice of Josh Lucas. The seriousness of the voice overmatches Home Depot’s serious look and feel as well the images of work and accomplishment. The Home Depot ads try to empower and encourage the viewer to say, “The home owner takes this seriously and so does Home Depot.”

Now juxtapose the Home Depot ads with the Lowe’s ads. Those ads lack seriousness and are more about the joke than getting the job done. Further, the ads give the viewer no real reason to choose.

Lowes Home Improvement needs to consider a different tone.

Positioning, especially in ads, is difficult. The purpose is to represent something that is different and better but at the same time carrying enough gravitas to make it important to the prospect.

Typically, the best position is stationed in opposition to a position already taken in the market. This gives a prospect a real choice while providing the most separation between the brands. In the case of the Lowes Home Improvement, it is positioning itself directly opposite of serious.

Remember when I said that positioned brands should represent something different, better, have gravitas and reflect the prospect? At least Lowe’s got the different part.

If you just look at the ads, do you want to be the homeowner who has pride in their home and approaches things seriously? Or the opposite of that?

I am all for humor in ads. I find humor memorable and, when it is done in the right way, it can have a strong connection with a target audience. However, it has to be used appropriately. For Lowes Home Improvement, talking unicorns and flamingos miss the mark. Homeowners and do-it-yourselfers take what they do seriously. Lowe’s should too.

Home Depot vs Lowes

A few days ago, my oldest son asked if I would like to join him on a venture to Lowe’s. I took him up on the offer, seeing that my wife was out of town and my only company was my dog.

As is typically the case with home improvement stores and me, there’s always something that I need to buy even if it’s something I don’t really need. This time, I needed dimmers for a few of the lights in my living room.

We choose our favorite primarily because of location.
We choose our favorite primarily because of location.

I followed my son around the store for a handful of minutes as he loaded his cart full with lawn care goods, bird feeders and other odds and ends (he is taking after me) before leaving him to find what I wanted to buy.

Here’s the rub: finding the light dimmer I wanted was like hunting for the Yeti. No thank you.

Location is paramount with home improvement stores.

I mentioned earlier that my son and I are a lot alike. So much so that we both have defined our home improvement shopping by the chain closest to where we live. For him, it’s Lowes. For me, it’s Home Depot.

Sadly, without either having a defining brand, the location of a home improvement stores has become the most important factor in deciding the winner in Home Depot vs Lowes.

The battle between Lowe’s and Home Depot was a subject of a recent article in Forbes, which stated that shoppers prefer the layout and design of Lowe’s over Home Depot.

I speculate that the real reason these shoppers prefer Lowe’s over Home Depot is because it’s the store closest to where they live. Consequently, they have backfilled that choice with things like design to affirm that they made the choice for a better reason than location.

What does this mean for the home improvement brand?

As I have previously written, the act of feeling like a “winner” is what drives us within the home improvement category (and most things in life). In the instance with my son, I “lost” at Lowe’s as I could not find the items I wanted readily nor did they seem better in quality. As such, there was no impetus for me to change my shopping pattern.

However, had my shopping experience been a breeze at Lowe’s, maybe this blog would have been written differently. As is, I’ll continue to be a Home Depot shopper.

Home Improvement Brands Offer NO Brand Improvement

The Home Improvement Store’s Brand Promise

By Tom Dougherty

Truth in Marketing and Improving Your Brand

Home Improvement StoresWhat your company takes as truth is not the fuel of preference and choice. The reason for this is that truth is not universal, it is in fact a product of perspective — and there are as many perspectives in the world as there are places to stand.

Every one of your customers sees the world from their own personal vantage point. As a marketer, do not be overly caught up in the product or service benefits that you consider TRUE differentiators or benefits over the competition. Leave the self-delusion to your competitors and grab every advantage that their blindness offers you.

A dispassionate viewpoint when viewing your own brand will give you more than just a heads-up, it may very well propel your brand to dominance. Think about the home and hardware superstores like Lowe’s and Home Depot branding (and all the home improvement stores).

They are engaged in a desperate struggle for market share, both trying to convince homeowners… that doing things yourself is “doable” (read Home Depot’s branding tag line “You can do it. We can Help” — and Lowe’s tag line “Let’s Build Something Together”). They compete for customers with the promise that their store has everything you need, the brand names you crave, and that their selection and prices are unmatched.

Corporate Home Improvement Stores Promises are Similar

Home Improvement StoresLowe’s — “We work hard to save you money every day. And we strive to offer you low prices every time you shop. We call these Everyday Low Prices, and we do our best to provide you with the best values, whether at your local Lowe’s store or online at Lowes.com”

Home Improvement StoresHome Depot —”The Home Depot provides our customers with excellent service every time they come into our stores. We offer the right products, the right selection, the right prices and a team of associates passionate about your needs. We build lasting relationships by helping customers realize their dreams and growing their trust through our products and services.”

As a category, the home improvement super stores have succeeded in squeezing the local hardware store and building supply companies. Their volume and pricing has changed the way national hardware retailers like True Value and Ace Hardware must do business, but the focus that brought about a sea change in the way home owners shop for the ever broadening category of home improvement products does little to take market share from ether of the big two.

Home Improvement StoresToday they have relegated their competitive practices to promotions and location. In both cases, even these poor attempts at preference has become harder to differentiate as they seem to follow each other in the location of store.

Lowe’s had a marketing strategy, some years back that at least positioned them against the category leader by claiming that they were “Improving Home Improvement” but even that has been dropped in exchange for the more category generic claim of “Let’s Build Something Together.”

The former advertising tag line (not a brand theme line) succeeded in positioning them against the category but fell victim to the all too common tact of talking about themselves rather than branding the company through identification with the folks that shop there.

The Home Improvement Stores as a Category

Let’s look at the category in general for just a moment. Does the category promise to empower the customer as people who can “do it themselves”? Absolutely. By promising the sense of control that being a “do-it yourselfer” represents the category has changed the landscape and overtaken the old category of lumberyards and hardware stores.

Home Improvement StoresThis, Stealing Share calls a category benefit meaning it defines an equity that everyone who has permission to play in a category of products or services share. No one owns it because everyone claims it. It is the minimum requirement needed to compete. It also means that claiming this value does not provide a competitive advantage over competition.

Home improvement stores,Home Depot and Lowe’s, have left it to the customer to supply the brand values that differentiate them. Have no fear — human beings have an innate drive that propels them towards simplicity and clear understanding.

The lack of a compelling brand forms a vacuum that never remains empty for long. As the left-brain attempts to provide rational reasons to justify a right-brain decision, the customer will supply an identity that reinforces their decision making process. The problem with leaving this critical brand void to the customer’s discretion is that your company will not have a brand… it will have as many BRANDS as it has customers and your business will be left to compete through a mixture of price discounting, increased advertising spending and the tremendous expense of new site construction.

Is location the only way to choose?

Home Improvement StoresAfter all, if customers have no reason to choose beyond their own “you fill in the blank” — what incentive do they have for driving past a more convenient location of a newly build Home Depot and continue on a mile further and shop at the Lowe’s that had, up until the new Home Depot arrived, been their habit?

Winning. This is the truth in the home improvement category. However, you can be assured that Lowe’s and Home Depot branding groups disagree with our assessment. They see real and truthful differences between themselves and their competitor.

Maybe one is sure they have better name brands. Maybe the other is sure they have better systems and friendlier employees. Just remember: “What your company takes as truth is not the fuel of preference and choice. The reason for this is that truth is not universal, it is in fact a product of perspective — and there are as many perspectives in the world as there are places to stand. Every one of your customers sees the world from their own personal vantage point.”

(Read our article about how to beat the market leader here)