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.

Macy’s declines in importance. Tip of the iceberg.

MACY’s declinesMacy’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

MACY’s declinesI 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.

MACY’s declinesTimes 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.

Why are we slow to adopt the Apple Watch?

A funny thing has happened to my family members of late – they won’t go anywhere without their Apple Watches.

Me, I still don’t have one. (I am a fervent collector of antique pocket watches, and won’t leave home without one.) But that doesn’t mean I haven’t noticed the behaviors of my most beloved.

Apple Watch
Why are we so slow to adapt to the Apple Watch?

Right now, my wife, daughter, daughter-in-law and son all own Apple’s wrist technology. In fact, three of these folks camped with me in Shenandoah National Park, where each was dutifully monitoring the steps and calories burned on hikes.

I have to admit; I felt a twinge of jealousy over the cool gadgetry. This was quite a change from earlier feelings I had about the device. I’ll never leave my pocket watches. But, after totally dismissing the Apple Watch when it first came out, I re-considered.

The Apple Watch is only being considered

Not enough to buy, however. Like a lot of people, it has taken some time to consider it. My son admitted that he stopped wearing his watch for a long while. He even tried selling it on Craigslist (but to no avail) until he came around again to liking it again and using it daily. My wife and daughter just bought their watches last week (a long time after the watches first arrived on the scene). Same, too, with my daughter-in-law. For many, it appears that the jury is still out as to whether or not it’s a necessary buy.

Gone are the days where people couldn’t live without an Apple product. Now, it just peaks our curiosities. Sure, everything looks cool and all, but it’s just not all that different anymore. That’s a different feeling than I’ve previously had about Apple, often waiting in lines on release days in the past.

Not so much these days.

Could that level of vigor come back? You bet. But Apple’s recent track record says otherwise. As for now, people, like my family members, will eventually come around to try a new Apple product. How long will it take them? And what does that say about the current state of the Apple brand?