Jonathan Salem Baskin's Dim Bulb

Christmas in June

Toys R Us has announced a holiday layaway plan for shoppers, and I think it's one of the smartest new ideas I've heard in a long time...even if it's an old one.

Customers can put away up to $2,500 in their Christmas Savers Club and Toys R Us will pay them 3% on whatever they've saved by October 31, at which point the funds can be used to shop for presents. Nevermind that 3% is more than double the average savings account yields available from banks these days, or that helping consumers plan ahead with their money borders on contributing to the public good. Or that Toys R Us can kick-off its holiday selling push by announcing some multi-million dollar giveback to its customers. 

It evidences the company's willingness to consider all the marketing strategies available to it, not just those that qualify as "new." It's great marketing.

Layaway plans belong to the pantheon of 20th Century promotional ideas that includes dinner glass giveaways at gas stations and playable 45s on the backs of breakfast cereal boxes. Such programs helped people keep spending after the Great Depression, and there was always a solid, direct line to connect these ideas to sales outcomes. How archaic, eh? To think that companies used to tell consumers that they wanted to sell stuff to them, and then made it easier, rewarding, or simply more fun to buy. 

No brand needs "new" anything, especially in the reality of today's marketplace. "Better" is the strategic catchword that matters and it means trolling every and any place a better idea might be found, including operational departments that might not normally be considered candidates for such efforts. I've written before that finance is one area that deserves attention from a variety of products and services; how your consumers buy, service, and upgrade/expand their business with you has an underpinning of money (i.e. they hand it to you) that you can most likely improve or make unique.

It's not sexy but it is relevant, meaningful, and offers a utility that puts even your funniest post on your brand's Facebook page to shame. 

I also think that talking about the holidays now instead of waiting until Thanksgiving is something that more brands should do. There's no "selling season" any more than there's a TV season worth worrying about, really, however much we like to pretend otherwise, and waiting for consumers to show up is not such a smart strategy. There's no reason why they can’t be engaged in programs and services right now that will benefit them right now. The Christmas Savers Club is hobbled with old thinking, and promises a mishmash of new media (stay tuned for that Facebook page), but it's still a better idea than doing the same old "new" stuff.

In fact, I'd do more with it. I wonder if we'll see:

• Product-specific promotions -- Could savers specify items for which they're saving and get deals? Maybe an incentive to take delivery of something prior to the week before Christmas? It would be great if Toys R Us could prompt more sale sooner.

• In-store benefits -- Maybe club members could get POS deals during the year, like shopping assistance (to pick out the products for which they're saving?). What about a present storage service at stores so members don't have to hide presents in their attics?

• Third-party tie-ins -- Tie-ins with other services that encourage saving are a natural, so why not cut a deal with local utilities so that pre-paying home heating bills earns a benefit? What about grocery stores? Is this the real backbone of the company's loyalty program?

I'm probably making too much of it, but it's just so damn refreshing to think about engaging with consumers in meaningful, sales-relevant ways instead of wasting time dreaming up how to propagate "content" into the "conversation" so that they will "collaborate" on it and, well, you get the idea.

I'm waiting for the first brand to bring back those dinnerware glasses. They'll get my business, whether it's June or December.

Haunted By Dancing Khakis

Gap Inc. is searching for "a creative partner for our holiday 2010 campaign," according to Advertising Age. In the spirit of helping the brand’s managers with their decision, I hereby offer up some straight and very dim suggestions: 

First, enough with the faux hip advertising. You've been trying to duplicate the successful "Khaki Swing" campaign since the mid-1990s. You can't. Annie Leibovitz can take pictures of every celebrity in existence and nobody will care. Your spots of dancing people during the holidays last year were inane. It's not that the stuff isn't sometimes fun or occasionally memorable but rather it's not authentic. The brand wears creative like it was a seasonal fashion. You spend lots of money every year to tell us that you're willing to spend lots of money to tell us nothing. Ads that have no credibility are not hip.

Second, stop trying to invent fads. I respect your gross, self-delusional belief that you can tell everyone what to wear, but that's only because it's so gloriously wrong. Listen to those social media types who are pitching you every five minutes; one of the only things on which they'll agree (or is actually true) is that fads can't have obvious corporate sponsors. It just doesn’t work that way, no matter how brilliantly you wrap that fame-destined scarf around starlets' necks. Ads that are purposefully ahead of consumers are simply irrelevant to them.

Third, you're competing with Kohl's, Target, Macy's, Wal-Mart, and a gaggle of other special clothing retailers. Skip the haute couture fantasy already. Even if you could guess a fashion trend before it caught on, your window of exclusivity would last about a nanosecond. The reality is that you share customers with most of your competition, and those customers all pretty much wear the same things that they can find at most of your stores. You keep swinging for the bleacher fences while people are buying T-shirts and other staples, and nobody needs to be told that basics are cool...they're all we can afford. You can't change these facts with an ad campaign.

Fourth, your stores still suck. So does your email marketing and your web site. Have you ever done a comparison to those retailers I mentioned above? Everything you do is utterly interchangeable. Worse, it's obvious to even your occasional customers that your pricing strategy is intended to grab as much margin as you can on the front-end, so all they have to do is wait for you to mark stuff down later on. Nothing you say or promise in your ads can overcome the shortcomings in these other influences on your brand.

Ugh, I'm complaining again, aren't I? It's just so frustrating because Gap could stun us by doing truly reality-acknowledging, business-daring things, like:

• Become a service brand, not a product brand. Redefine the very nature of your business as a relationship with your core consumers, not a producer of merchandise that you keep trying to throw at her. Become the first retailer to crack the code on what  elements of a relationship really matter and which prompt repeat purchase. I bet it would change your pricing, merchandising, promotions, store hours, staff training, and various other operational processes.

• Reaffirm your quality leadership. The only way you are going to be able to consistently charge more money for your stuff is if it's better than everyone else's stuff. You do not want to be in the disposal clothing business like Forever 21. Quality is just about the only product quality on which your brand can rely (which means your customers can rely on it).

• Use your advertising to communicate your USP. Make it as funny or sexy or memorable as you want, but do so because it helps communicate the substance of why you're different. Again, it doesn't matter if your ads are different. Be different. Tell the truth.

I fear that none of this advice is going to be much help with this year's holiday selling season. The latest news and performance results coming from Gap suggest that the brand has absolutely no idea what to do. It's still to preoccupied with its imagined past to create what's possible in the future. No ad agency can change this.

The brand is haunted by dancing khakis. 

(Photo credit: It's a screen grab from the "Dancing Khakis" TV commercial)

Could Pabst Be Too Cool?

Pabst Blue Ribbon ("PBR") is a 100 year old+ beer brand and one of 25 labels just bought by an investor renowned for his ability to make old brands profitable again. I want to give him the benefit of some dim insights, though it's proving much harder than I expected.

There used to be a lot of beer brands just like there were more than a handful of car brands. Visionary entrepreneurs, local histories, and the limitations of production, shipping, and storage gave America Packard and Tucker cars along with Olympia and Stroh's beers. Those days are long gone. Giant multinationals control both industries. Pabst Brewing accounts for little more than 2% of total beer sales nationwide.

Interestingly, the company is nothing more than a collection of recipes and logos. Everything else is virtual. Take PBR for example:

• It has no breweries but rather outsources it to MillerCoors. Its famous facility in Milwaukee is a crusty eyesore that's locked in perennial talks to be redeveloped as a shopping center

• Its HQ is in a nondescript suburban Chicago industrial park, not Milwaukee as claimed on its logo and online propaganda graphics, and

• PBR customer service is based in San Antonio

There's nothing real about PBR whatsoever, only it gets lots of cred from artists and other aspiring nonconformists...so much so that its 2009 sales far outpaced those of its better-known rivals, like Miller High Life, and it spent next to nothing on measured media. This is where my analysis runs into trouble.

Is Being Cool Uncool?

PBR can trace its success directly to its failure. 

It started the 2000s as a has-been brand name, so pointless and uncool that it was perfectly poised to become cool when it was touched by the dark, abstract magic that drives consumer trends. No schmarty-pants marketer can take credit for architecting the Phoenix-like rise that followed; the brand was owned by a charitable trust that knows about as much about consumer tastes as you'd expect a charitable trust to know. It didn't hurt that PBR was the beer of choice for the wacky Dennis Hopper character in the movie "Blue Velvet" but the brand's revival was pretty much organic, from what I can tell.

Today, the company has caught up with the trend. Its web site plays up its hipness, allowing visitors to create mashup art with its logo and post pictures. It seems to sponsor the occasional art or music event. Obviously its consumers like drinking the stuff, but the brand's marketing is all about anti-pretense and authentic when the reality of its business is nothing but pretension and inauthenticity.

I was told once that there was a saying within MTV that went something like "if you have to say you're cool, you're not." If you need any proof of this truism you need look no further than Microsoft or the last few years' worth of Detroit's auto marketing. Now PBR is officially in the cool business, and what surprises me is that more consumers haven't figured it out. Will they come to realize that there's no there there at PBR? Can it stay cool by acting cool? Does it matter if they like the taste and price of the brew? 

Getting Uncool Again

I think PBR needs to get uncool again...for real...not in a tongue-in-cheek Hormel Spam or faux nostalgia sort of way. Doing anything less just isn't sustainable, as I don't believe any brand can consistently identify the latest trends (let alone stay ahead of them, no matter how consultants might confidently claim otherwise). Consumers eventually catch up to reality and there are far too many other options in the beer category. So here's what this dim bulb would recommend:

• Do anti-cool things. Scrap the art sponsorships and web site nonsense. Every time somebody suggests to do something cool, consider doing the exact opposite. Fund marketing events that are distinctly and straight-forwardly not cool. Don't wink or acknowledge that there's some joke on which the brand has an in. Once you give away that you know something’s cool, it's not. It's just lame. Dare to be dull and let your customers decide if it's interesting.

• Create legitimacy. If all you have is a recipe, create ways to build legitimacy around it. Does PBR guarantee purity of ingredients or have some brewing oversight that puts other processes to shame? Are its ingredients locally grown (somehow?) or does it only use local vendors? Could its delivery services better paid, more fully covered with health care, or enjoy some other unique qualities? I think it needs to create a real company out of the management service it currently maintains.

• Turn the business into a brand. What if everything PBR did -- from its policies and how its employees dressed, to the design of its offices and its outbound marketing -- embodied a concept that was anti-cool and legitimate? PBR has a rich heritage from which to draw (as so the other brands in the Pabst stable) so why not come up with a brand that applied to every aspect of its business? My fantasy idea is that it function and even dress/look like the company did in the 1950s...and do it for real, not just pretend...

There's an opportunity here, so I think PRB's new owner might be onto something. The challenge will be to make the brand real while keeping it really uncool. Virtual hipness isn't the key to building the brand. 

It's funny, though. Now I want to go buy a six-pack and reacquaint myself with the brew, cool or not.

(Photo: an "arthack" from the Company's website)

The Land of Lost Brands

Though I often like to riff on smart or silly marketing decisions, I'm more interested in the business strategy behind brands. In considering Dell and Starbucks, I'd have to say that both companies are utterly and somewhat similarly lost. 

Dell

Low-priced beige boxes delivered to your door. By 2006 this simple equation built Dell into one of the most profitable and admired companies in the US, after which its founder retook the leadership reins and put the company on a slow slide to irrelevance:

• The company pushed its way into retail so it could compete with identical-looking computers from other manufacturers (and lose most of its profitability for doing so

• It spent oodles developing inanely clunky products, many of which never even made it to market (or did, sadly...can you say Axim?)

• Putting a red cover on a laptop meant it could compete with Apple on fashion, and lots of ad dollars were wasted failing to make the case for the case

Dell announced late last month that it's going to retreat from expanding any more and focus on finding profits. How does it intend to make more money selling computers? By cutting costs, according to this story in The Wall Street Journal.

Starbucks

Tasty pick-me-up in a home-away-from-home retail setting. By 2008 this proposition had fueled a zillion store openings and the writing of books on why Starbucks was so successful, after which sales started to falter as its inspired chairman returned to lead the company further afield from what once made it great:

• It started debranding some of its stores (assuming faux local coffee shop monikers)

• The company doubled down on the large variety and volume of food and accessories it tries to sell as impulse items at checkout

• One day of retraining its employees at its crowded and noisy stores was intended to offer experiences distinctive from the crowded and noisy experiences available at McDonald’s, Dunkin Donuts, et al

Also last month, Starbucks announced perhaps its grandest strategy: to sell its instant Via in tens of thousands of grocery and other retail locations. How does this improve its stores? It doesn't, or at least isn't supposed to do so according to this story (which appeared a week after Dell's announcement).  

Similarly Lost

I don't know how Dell and Starbucks both got so lost. Perhaps its partially the fault of brilliant founder-leaders who aren't as smart as they think they are, or who are so used to seeing the world the way it should be that they just can't come to terms with the way it is. Maybe the branding gurus have gotten too caught up in their glorious PowerPoints and mistaken a buzz phrase like "brand extension" for a synonym for "business strategy." There's probably a heavy dose of sycophancy going on at both companies, so no adult is saying no to the nonsense.

But these brands have run into walls and don't seem to know it.

The world has changed, for sure, and computers and retail coffee have been all but commodified, leaving Dell and Starbucks with the same choice: get better at what you do, or do something different. Both brands are pursuing the latter. Dell isn't coming up with ways to make its direct delivery system more reliable, beneficial, or valuable to its customers, and Starbucks hasn’t appreciably innovated or improved its in-store experience. 

There's arguably a host of meaningful and unique things both businesses could do to reaffirm and deliver on their core propositions. Low-priced beige boxes delivered to your door. Tasty pick-me-up in a home-away-from-home retail setting. These founding propositions fueled Dell and Starbucks’ successes, both in terms of the financials and branding, and they're still what the companies are best at (and what we consumers expect from them). Only these core strengths are simply no longer applicable, according to what the companies have announced. 

Not even the smartest marketing can make up for this paucity of intelligent strategy. 

Welcome to the Land of Lost Brands.  Am I right, or just dim? Do you have other candidates to recommend?

In Recognition of Good Taste

"Good taste" is rarely used to describe great advertising, but Domino's is going to town with it.

It just announced that it has doubled its quarterly profits after telling its customers that it had fixed the taste of its pizzas. It didn't "improve" things or follow any other standard operating procedures of the marketing world; in fact, it violated some of the basic tenets of advertising, such as telling the truth. Critics lumped it into the category of "mea culpa ads" (such as the billboards London's Evening Standard newspaper ran last year apologizing for the crappy quality of its content). Domino's went one better, though, by running documentary-style spots of consumers likening the crust to "cardboard" and topping to "ketchup." It was called extreme and even bizarre. Comedian Steve Colbert got in on the commentary. 

And then the campaign worked.

I am fascinated by this victory of substance over style. The Domino's campaign hasn't been particularly artful and certainly not groundbreaking. This is a good thing, since much of inventive marketing these days is nothing more than creative self-satisfaction passed off as strategy to clients willing to squander their money. Vast numbers of consumers are being encouraged to "engage" with content that has little to no relevance, meaning, or utility. Clicks mean nothing unless they go somewhere or, better yet, get people to do something. 

Like buy pizzas.

There are at least three qualities to this success story that might be instructive to others:

• First, it acknowledged reality. How it did it was far less important than the fact that it successfully noted the context in which its customers were shopping and consuming, and their awareness of their choices and memories of subsequent experiences. The pizza did taste terrible, and fitting into this reality made whatever it said next more believable and relevant. Imagine if other campaigns didn't all but willfully ignore reality...could the Windows 7 launch have been helped with some nod to the fact that Vista was a stinker? On the flipside, isn't this exactly how Hollywood markets new motion pictures ("From the folks who brought you…")? 
• Second, it imbued its offer with purpose. I can't count how many products are launched because they're "new and improved" without ever proving what that means. Domin'’s fixed a real problem...it wasn't its annual product line refresh or latest brand extension exercise. There are zillions of real, experiential problems that need fixing, and which warrant as much creative ingenuity as offering cheese topping that's cheesier. 13% more cleaning power? Whiter whites? Imagine if Tide came up the reasons why we needed to stop using the old goop and start using the new vs. ginning up new spin to sell stuff to us.
• Third, the campaign dared action. It didn't present a POV or attempt to attach an emotion or idea to the brand (well, beyond the idea that it’s products sucked, which was already commonly known). Think "taste test" only for real. This is a powerful and frequently overlooked quality of successful advertising, as well as an important driver of meaningful social media interaction. A branding campaign that purports to get consumers to forward notice of the branding campaign to other consumers is, well, rather circular in its logic, isn't it? Test, analyze, contribute, and a host of other action verbs matter more. Buy matters most.

We can quibble about the execution of the campaign, and I'm pretty certain that it won't win any industry awards. I also don't think that the brain trust at Domino's cares one bit. They're too busy making -- and selling -- pizzas that taste good.

The Last Time

With Blockbuster's deft PR manipulation of the Wall Street Journal to write about its "remake" on the same morning it announced the continued collapse of its business yesterday, I also feel compelled to write about the company. This will be the last time I do so.

In the spirit of full disclosure, I joined Blockbuster's senior leadership team in the late 1990s soon after Viacom acquired it; I was fired three years later in one of those bloodless corporate coups when a new CEO brought his own team along. Blockbuster took excruciatingly good care of me, however, and my experiences there had been very positive, so I've always been an alum who hoped the company would succeed.

This is why I've been so disillusioned, and why the latest news has put me over the top.

Blockbuster has been transforming itself for going on two decades now. I can clearly remember the headlines declaring that digital distribution would eat its lunch and that consumers wouldn't go to geophysical stores to rent little plastic boxes called "videotapes" for much longer. I was part of the furtive effort to remake the stores into customized local retailers, utilizing state-of-the-art BI (built from scratch, as this predated the CRM revolution) and a new high-tech distribution center in Texas. This strategy didn't last a year before it was chucked for a succession of other, equally short-lived initiatives intended to discover the company's future somewhere outside the four walls of its stores.

Blockbuster's corporate history since has read like the script for the movie "Dead Man Walking." 

The core plot conceit has been that physical rental of entertainment is going away, and the experts in the media and analyst community have opined on all of the "rivals" that have been responsible for "major shifts in how people rent and watch movies." The company has invested its time and money in a variety of these alternate businesses, like on-demand, mail order, and vending machines, but can't seem to get ahead of the disastrous decline in its same-store sales (it lost $435 million in 4Q09 on a 16% decline in store traffic).

That's because it has wasted over a decade trying to fix the wrong problem.

Blockbuster is a retailer. It operates geophysical stores. There are always going to be other ways to get digital content, but they don't necessarily have to be better ones. Distribution channels aren't a zero-sum game and an increase in one doesn't automatically link to a decline in the other. Blockbuster's primary competition was not, and isn't now, the proliferation of other ways to get movies: it competes with other retailers for store visits, and it has done a woefully poor (and perhaps terminal) job of meeting this challenge.

Back in the 1990s when the company was first supposedly going out of business, it was generating more than a million store visits per day. Think of it for a moment...that meant a million+ daily opportunities for customers to engage with the brand:

• Establish stronger relationships (the company could bring new meaning to membership)
• Derive new value, and find new benefits (discover better displays and more services)
• Reinforce the routine of visiting Blockbuster stores (with a million people already in the habit, how could every visit been made into a reward?)

Nobody was looking to stop renting videotapes (or DVDs), per se, though circumstances and convenience would have still allowed for the invention of other distribution models. The idea that such innovation had to represent a trade-off or decline in Blockbuster's business was (and is) simply and utterly wrong. The company all but made it real by ignoring the reality of its retail business -- most stores today look exactly like they did a decade ago, with no real innovation in how products are displayed, offered, tracked, or how its hard-working employees are trained and empowered -- and instead did a successful job at failing to address issues that were beyond the purview of its expertise or control.

It was always about retail and never about the macrocosmic shifts that consultants are paid to blather on about, yet the Journal article reveals that Blockbuster is still incapable of acknowledging, let alone addressing the only real thing it could do to save its business. Instead, the story is full of all the typical nonsense we've heard about entertainment content and how the company has hired more experts to study more strategic options..though one analyst had the guts to say "If they can't build a profitable stores operation, then there is no Blockbuster. It's real simple."

Finally, someone speaks the truth. 

So I'm done with it, having made the same basic point in essays going back many years. I simply cannot fathom how a company could be so repeatedly and consistently dumb. Complaining about it isn't fun anymore.

Branding No-Brand Brands

Street fashion designer Rick Klotz has announced that he's going to forsake any brand logos or names on his Freshjive products next year.  Is it an anti-branding move, or something more?

I say something more.

Klotz's streewear fashion world is all about lifestyle, so you can't go to his web site without getting tons of content that isn't directly about his products.  Rants about politics.  Music.  It's almost as if the products are an after-thought...and they are.  T-shirts are ultimately, well, T-shirts, and the same goes for zippered hoodies, or any of the other apparel sold in this category.  Logos are just as easy to knock-off or mimc as graphics and fit.  There's nothing ultimately ownable here, is there?

So the traditional branding approach -- to differentiate from this chaos with a logo, as an announcement to the world your own unique good taste and financial wherewithal -- is a failing strategy in this category.  Or at least it's an ever-increasingly-expensive one, and certainly a strategy that rewards only the newest and flashiest entrants.  There's little incentive to build brands as much as constantly change or abandon them.

By opting out, Klotz turns that game on itself.

Maybe he knows that businesses don't brand the stuff they sell; consumers do, and in doing so make the branding real.  He's not touching any of the attributes of his brand that matter to anybody, from the manufacturing in Los Angeles, to all the political nonsense on his web site.  His no-logo won't change the satisfaction his customers find in and with his products; and it'll indirectly let them declare their good taste by making a brand out of not being branded.

Anyway, I suspect that inner-satisfaction is the real core of his brand's strength, or that of many products and services these days.  So much of consumers' individual choice is otherwise hidden from review: one product is bought because of a policy it supports, while another is avoided for one.  A retail store that gives its employees benefits might attract more local shopper traffic than one that exploits its workforce as if they were androids.  Saving the planet is a brand attribute that features prominently for lots of products and services, just like its opposite does, too.

None of this branding is communicated by brand communications (other than when it declares the facts), and it certainly isn't invented thereby.  The only thing that's ownable is what a business chooses to do, minute-by-minute, and how it subsequently communicates it.

The logo is an afterthought or, once Freshgive's competitors follow suit and drop their labels, too, maybe Klotz will bring it back to the forefront.  Label everything everything.  It's as meaningless as labeling nothing. 

It’s the DOING that matters more.

The Bulb Asks:

• How is any brand attribute exclusive to your brand, unless it's something you do?
• Would your products still provide the same experience if they were unbranded?
• When is a commodity not a commodity?  Is the difference in thought or action?

Transformation Interrupted

According to market research firm Hartman Group, consumer loyalty is shifting -- from products and brands, to the experiences offered by retailers -- in a radical transformation that started before the recession.

I think the change is much bigger than that.

Hartman is onto something because it specializes in enthnographic market research (among other tools), which is an attempt to understand consumers in the context of their lives, both in terms of their knowledge and beliefs, and through their behaviors.  I believe the firm is saying that capturing consumers' attention with creative and/or compelling marketing communications no longer carries the water in our busy, confused, noisy lives; experiences are what stick, bring differences into sharp focus, and compel purchases. 

The problem is that retailers can't "own" experiences or, more broadly, experience is a synonym for the context of reality.

The more people know, or think they know, the less they believe (broadly), and more tenaciously hold onto what little they do (specifically).  This is the intriguing dichotomy of our Internet Age; as consumers gain the capacity to explore and share, they lose the ability to trust and commit.  Institutions are no longer credible, and historic truths aren't reliable; facts and fiction are endlessly available, and often impossible to tell apart; every subject is up for discussion and debate, which occurs in real-time, all the time.

No wonder people aren't willing to buy based on the intangibles on which brands have relied for almost a Century.

Reality is the new imagination, providing the context in which actions can assert truth (if not simply immediacy, and thus clarity) to consumers.  This idea isn't limited to retailers; the challenge is for any business to make what it does, not just what it says, believable and compelling.  Actions, and the myriad of experiences they enable -- from in-store environments, online glimpses of manufacturing, policy decisions, to the behavior of every employee and vendor, whether at work or not -- are what feed awareness, conversation, and thus brands.

Brands exist in this reality of experience.  Communications can describe it, but marketing can no longer serve as a substitute or dictation for it.

It's a great opportunity, and it's bigger than, say, a social media strategy, or something that's experiential and in-store.  These are tactics.  The radical transformation underway in the marketplace started before the meltdown, and it's inevitably changing the very substance of what marketers do for a living. 

The recession was a brief interruption.  The challenge is to see past it.

The Bulb Asks:

• Do your customers know that you're telling them the truth because you say so?
• What percentage of your customers' belief in your product or service relies on third-party confirmation?
• What's the ratio of your actions that prompt marketing, vs. marketing that aspires to prompt actions?

A Starbucks By Any Other Name

A new local coffee-shop called "15th Avenue Coffee and Tea" is opening this week on Seattle's Capitol Hill, only it's not new, nor is it local.  It's a test concept from Starbucks that, if successful, could appear in other markets.

Interestingly, the names of subsequent outlets would be similarly customized to their locations.  This would help give the stores what a Starbucks exec calls "a community personality," as the test shop in Seattle will serve alcohol, host live music and poetry readings, and otherwise do whatever it can to come across as a local indie experience.

Is this brilliant branding, or aggressively creative lying?

"Local" has cachet these days, I suspect because folks expect it to correlate with qualities like authenticity, community, and a broader definition of profit and loss (more direct connections between revenue and the success of the local marketplace, like Vox Pop's example; better green policies that'll preserve the local environment, etc.). 

Some brilliantly conceived brands have gotten grilled for lacking these attributes, like the opposition Wal-Mart regularly gets to its store expansion, or the uproar a few years ago over the toys that Mattel manufactures faraway that don't look so safe close-up.  Micro-breweries continue to steal customers from the big beer brands. 

So I get the impetus to look local. I just wonder if being local is the same thing, or whether consumers are interested in the difference?

Beyond branding, there's nothing local whatsoever about Starbucks new store concept; like the craft beer labels coming from Anheuser-Busch/Michelob, we're talking labels.  Look-and-feel.  15th Avenue Coffee and Tea hopes to repurpose a tired Starbucks location with marketing.  It's an excruciatingly traditional strategy that's somewhat dishonest, however brilliantly it might be conceived.

It doesn't have to be this way.  Imagine if Starbucks (or any galactically-large retail brand) came up with a model for its outlets that was truly local:

• Site: Physical space configured and designed to fit unique real estate
• Employment: Recruiting nearby, and training based on unique customs
• Benefits: Individualized by location, from healthcare to support services
• Sourcing: Purchasing nearby products and services
• Offering: Custom products/configurations based on tastes of clientele
• Community: Profit/loss closely tied to charities, schools, etc.
• Management: Future developments keyed to local feedback & needs

The problem, of course, is that operating as a truly local store would obviate all of the habits and economies of scale that make global brands possible, let alone profitable.  But maybe there's a middle ground?  If Starbucks could operationalize at least some of these qualities, it might be a helluva lot more marketable and sustainable than a new branding concept. 

Right now, 15th Avenue Coffee and Tea is nothing more than a Starbucks by another name.

The Bulb Asks:

• Is consumer knowledge/awareness changing what they expect from brands?
• Is "conversation" what matters, or what subjects businesses put up for discussion?
• If the brand name isn't working, do you fix the name or the underlying business?

Services, Not Products

Best Buy is going to start retailing an electric motorcycle sometime this fall, in an effort to repurpose some of the space available in its cavernous stores.  I think the bigger opportunity is to use that space to deliver new and different services.

There are lost of things wrong with the gadget business:

• No CD-type revolution in performance that requires purchase (flat TV screens come close, but name another device.  Blu-ray?  Not hardly)
• Consumers are holding onto devices longer, and not expecting them to become obsolete/disposable
• It's easier, and often cheaper, to buy the stuff online (whether from Amazon, NewEgg, etc.)

It seems that miniaturization is another challenge, along with improved processor speeds and other improvements, in that the stores risk appearing empty because devices are smaller, flatter, and do more things.  And a trend toward offering fewer SKUs is being driven by the CPG business, which begs the question of how many permutations of mp3 players do shoppers need to trip over.

So one of the things Best Buy is doing is finding new product categories to stock. It has had success selling musical instruments.  It's supposedly looking at stocking home automation systems.  

But couldn't it do more with its geophysical place-ness?  I've long maintained that every business is in the services business, no mater what it sells...or, conversely, needs to completely abrogate the responsibility otherwise.   Wal-Mart isn't in the service business whatsoever.  Nor is eBay.  Brands that try to exist somewhere in the middle risk alienating their customers by failing to meet their expectations.  Were Detroit's cars retailed as products or service relationships? 

Best Buy has a solid presence in services with its Geek Squad (and a less certain one in its ownership of Napster), but its stores are still configured like they're intended purely to sell products.  Imagine if it looked at all that real estate with an eye to fully realizing the services orientation:

• Repair would be a section, not a countertop. The geeks would be available to fix or tune-up any device.  There'd be a waiting area like they now have at nicer car dealerships.  Give away free drinks.  Sell extended service plans that truly went above and beyond the manufacturer guarantees.  Allow people to customize their stuff with more variety, and do it all on-site (there's some suggestion that the mobile A/V bays will be used to service the new electric bike) 
• It would operate a car service.  Geek Squad cars go the wrong way; the idea would be to bring people to the store, along with their broken equipment.  Bodies walking through the doors are an opportunity to sell, or at least to satisfy.  A complementary offering would be phone help, somehow linked directly to service personnel at a local store.  Risk allowing geeks to establish ongoing relationships with customers; it'll keep both sides of that equation loyal
• Space would be created for activities.  Why not go beyond selling musical instruments and offer rehearsal space for rock bands?  Ditto for classes of every flavor (i.e. do what Apple stores do).  Couldn't opportunistic events occur in stores, from local band performances, to community club meetings?  Again, getting people through the doors is always a good thing, and doing so without hitting them over the heads with sales pitches is even better. 

Electric motorcycles will be cool, though at almost $12,000/each, I don't think they're going to sell many of them.  I'm all for putting other cool and different products in the stores.  But this dim bulb thinks Best Buy's future is in services, not products.