Click play >> to view this month’s video welcome(47 seconds) from NYC
The annual NRF convention at the Javitz Center was abuzz with new technology that will make running a retail organization more efficient with state-of-the-art systems and programs. The exhibits floor was full of representatives and retailers and as many high tech sounding names. Hopefully, these innovations will save the companies enough money to offset the loss of revenue most stores experienced in the past couple months of holiday sales.. With a lousy December (-0.4%) and an overall disappointing two-month holiday period (3% vs. a prediction of +4%), there were many reasons given for the poor performance in the trade articles that followed today’s release of December figures. The old stand-by “bad weather” and over-used “tentative consumer” were cited most often. Nobody, however, said that their marketing efforts were off the mark.

I won’t dwell on that again in fear of sounding redundant from last month’s article. However, it was interesting that most of the program at this year’s convention failed to address the key issues of marketing and branding. About the only sign of the “B-Word” was on one of the displays at the NRF bookstore where 4-5 books promised the key to better branding. (Unfortunately, my book isn’t quite finished in time to hit the shelves!) In talking with several of my retail counterparts at the convention, we all were in agreement that this year’s holiday marketing efforts were about as exciting as the 30 re-runs of the clay-mation version of “Rudolf the Red Nosed Reindeer”. It just seemed that those who did advertise had nothing to say other than another “lowest prices” sale in ads that looked so similar; one had to yawn whenever we opened the daily newspaper (those of us who still get the paper, that is.),

Looking for answers, maybe these disappointed retailers should have been sitting in church with me when our pastor used a quote that seemed to “hit the nail on the head” –
“The bitterness of poor quality lingers on long after the sweetness of a cheap price fades away.” Sure, we all have to have a great price image to survive in today’s marketplace. However, whatever happened to giving customers a really great shopping experience (especially at the holidays)? With lousy service, jam-packed clearance round racks, and with advertising that seemed dull and redundant, retailers have lost the value part of the proposition. It’s interesting to look at the December comp’s, that the ones with the worst performance were also the ones with the dullest advertising and store presentation. I won’t list them here, but the December results are available online so you’ll know who I mean.

It’s interesting that Wal-Mart broke with some really good ads that communicated their value statement while at the same time they broke with blockbuster pricing. The turnaround in sales also reflected a much better shopping experience in the remodeled stores that I visited. Costco’s results continue to be amazing in view of their lack of any advertising. The store experience says it all. Flat screen TV’s were the hot items and these stores had displays that rivaled the big electronics stores and were a lot less confusing to shop.

Macy’s announced that while it now had its logo on hundreds of stores in every market (which produce lousy sales), they were expanding their San Francisco web offices due to increases in their online business. The amount of gift card sales only punctuates our customers’ lack of enthusiasm to shop for actual gifts and other traditional holiday items.

The time to start building Holiday 2008 sales is now. Stores need to take a look at their marketing efforts and research their brand position and start NOW to provide a reason for customers to shop them now and on an ongoing basis. It’s the only way to build a better business all year.

RAC CHICAGO—A GOOD PLACE TO START.
To get inspired and re-energize your branding efforts, start out by attending this year’s Retail Advertising Conference in Chicago on February 6-8. The program promises to be one of the best in helping you make your marketing message “stick” with your customers. Click this link to get all the information about this year’s program and registration.

Left..Visit to the Rockefeller Center Christmas Tree
I was just listening to some old Christmas carols when I heard a song by Bing Crosby (that shows how long ago I recorded these songs!) called “It’s not the things you do at Christmas time, it’s the Christmas things you do all year long!” I had just seen a business news report that retailers were again struggling with their holiday (politically correct of course) sales this year. How appropriate are old Bing’s lyrics for those retailers who hold up doing any signficant marketing and branding all year and then shoot their marketing wad in December expecting the customer to select their store over the others with the same items and much the same prices. I always used to tell our fragrance buyers that they should build a preference all year as the right store for that purchase and then they wouldn’t have to scramble and overspend from Thanksgiving on tryingto get that last minute gift sale. Branding is not just a blitz campaign. It takes time and it take meaningful messages (no, a preprint a day does not keep the sales slump away). The customers are all as busy as I am at this time of year and they are going to go to the stores that they prefer in March and July first to get their Christmas shopping done because they don’t have time to stroll the mall anymore. I just heard that Macy’s was going to be open 24 hours this weekend. Hooray. I always wanted to go to Herald Square at 3am to get my wife’s gift!
Wishing you a Merry Christmas and Happy New Year all through 2008.

Ken

Click on PLAY arrow to view this month’ 90 second video welcome.

So, another Thanksgiving weekend has come and gone (quickly I might add). I remember my department store days when working the day after was as challenging as my first day of Army basic training…only a lot more exciting. Now that Black Friday has become such a media event, it’s hard t believe that anyone wants to shop that day—especially at 4am or 5am. I was surprised to see that there were people camped out in front of my local Best Buy on WEDNESDAY afternoon just to be first in line for the bargains two days later. So much for a nice family holiday on Thanksgiving Day! The advertising in general over the weekend was non-descript. The two department store competitors (successful ones, that is) Kohl’s and JCPenney literally bombarded the media with more preprint pages and spots than I can remember. More surprising was how identical their print ads were. Almost like they knew what the other was going to do not only the vehicles and style, but also the merchandise and prices. It reminded me of Doner CEO Alan Kalter’s description of the disease plaguing today’s retailers—“emulitis”. Of course, he said this over a decade ago but the copycat strategy is alive and well. Overall, there were more bargain shoppers this past weekend, but they spent less thanks to the continuing decline in prices on flat screen TV’s, mp3 players, and laptops. It will be difficult indeed to achieve even the predicted 2% growth for the holiday selling season.

Now, we are infatuated by Cyber Monday. So all of us who have something better to do than stand in line on Friday (or Wednesday night) can wait and get bargains online by just loggin in on Monday morning. And it seems to work there as well, with significant increases even with retailers who are in a slump (like Circuit City and Sears). The growth on line continues to amaze analysts. Yet, it should be no surprise given the over 80% of consumers who go online prior to visiting a store to make a purchase these days. The integration of the store and online marketing efforts is more critical today than ever. By the way, I “elfed” myself on Office Max’s site (http://elfyourself.com/) and it was as much fun as watching Bob Thacker’s examples of last year’s big success stories. The whole extended family is now dancing in their green costumes this year online.

Now it’s back to reality. With all the effort and spending toward getting the bargain hunters this weekend so we can clear inventory and reduce our margins, isn’t it time for stores to devote a day to making sure that there brand is alive and well…or at least existing? With the exception of Zale’s and Kay Jewelers, I have not seen much effort to do great advertising and give customers a reason to choose your store for any reason other than super values and 75% discounts. What happened to giving the customer a reason to be loyal and have a preference for your store so that you don’t have to wait for the next big sale to give a reason to shop. The print ads that I received from Sam’s Club were the closest thing to holiday advertising that makes you want to visit the store for the merchandise and not just the discount. Great photography, great design and great prices make the store look better than any conventional department store advertising that I reviewed.

In broadcast, it’s pretty much the same. Seldom is there a brand message that positions the retailers as a preferred choice for the holidays. Sure, with the economy, price is as important as ever. But with the amount of competition and the growing lack of shopping time or interest, wouldn’t one want to be the preferred store going in to the weekend and make holiday shopping a special occasion like it once was. I was in Saks a couple days after the Thanksgiving holiday and it seemed like it was no more exciting than a random weekend in July. We blame it on the Internet, or the economy, but we ought to look into the mirror and pick a day to promote our brand to our customers and to our employees so that there is a reason beyond price to come to our stores all year round.

By the way, don’t forget to sign in above to insure that you receive each month’s articles.

Press Play >> now for a 45 second video message from Ken.

It seems like it’s the same old story when the monthly retail sales reports come out. The chains that have been doing well (like the new Kohl’s that I just visited) continue to maintain their comp sales growth and the others (like most department stores) can’t figure out what’s happening in the marketplace.

A couple of reports this month pointed out what’s wrong with these stores. It’s the brand, stupid! An article in the New York Times talked about Macy’s strategy backfiring and that the new consolidated brand had forgotten about what made May Co. and Marshall Field’s so successful. It went on to say that the reason customers weren’t going to the stores as much was because there weren’t enough “deals” (as in coupons and promotions) and therefore the customers were opting for other chains (like Kohl’s and Target). CEO Terry Lundgren stated that Macy’s moved “too far, too fast” from the promotions and basic merchandise (like Dockers) that the previous chains built their volume on and that they would have to “backtrack” to get some of those customers back. I don’t think that’s the problem and those customers that only shopped because of a coupon only accelerated the downfall of the previous department stores. Wouldn’t it be much better to give people a reason to shop at your stores other than the “stars” (like Martha Stewart and P Diddy?) have stuff there to sell? The new campaign for the “global Macy’s brand” really fell short in creating any reason to shop there or to expect a better experience than the specialty and discount chains have been offering. Department stores, when they were the heart of retailing, made shopping an exciting experience or at the very least a place for special purchases. As they have expanded and consolidated, there simply is nothing special about the stores. And a discount coupon or loads of 50% off Dockers or Liz Claiborne isn’t really special, particularly when they are always on sale. Who shops for regular price at a department store anyway? I happen to agree with the consolidation of all the former store names under the Macy’s logo. It is a legendary brand with a lot going for it. But all of these stores aren’t on Herald Square and the experience is nothing special. What Macy’s needs to figure out is what the brand should be so that it can have a special relationship (aka a brand) with its new and future customers. Until they define the brand better, all the coupons in the world won’t reverse the downward trend and the disgruntled customers of the former stores.

Another report came out that after 20 years, the Bombay Company’s new owners were abandoning the US and were just going to operate the Canadian stores. I knew the dollar in Canada had grown in value, but not that much! The articles generally stated that Bombay’s demise was due to its (and many other smaller stores’) failure to compete with the big box and larger specialty chains. That may be true but it’s not all a matter of size that matters. For the 20 years, I could never really figure out what Bombay’s reason for being (a key element to a successful brand) was and why anyone would shop there. Sure the stores were neat and the merchandise was nice, but why should I go there? They never developed a brand that was based on the customer and the result was that the chain was always “just there”. Maybe they will do better in Canada, but I am surprised that they lasted as long as they did. There are plenty of smaller sized chains (like Coach, Christopher and Banks, Hollister) that do very well because they have a great brand strategy and they execute it very well in the store, everyday.

Without a great brand strategy, a retailer can blame poor performance on a lot of other reasons (like the weather) but what they really need to do is take a good look inside and find out what they really stand for with the customer and then communicate that more effectively.

Press the PLAY arrow to view a 60 second welcome video.
The past several months have been pretty much a wasteland for new creative on the retail advertising front. Not that there haven’t been new spots and new ads on the scene, but nothing has stood out as break-through creative or really spot-on branding.

Recently, however a few campaigns have broken that have caught my attention and, I think, the attention of the consumer as well. Additionally, I think these are examples of campaigns that reinforce the stated brand strategies for these stores. Let’s take a look at three of them.

1. Stein Mart. Always a great off-price alternative to the traditional department stores, Stein-Mart has never really differentiated itself with a strong brand message. As a matter of fact, their advertising, in my opinion, has been a non-entity. Great brand strategy but they kept it a secret. The new campaign, however, from Devito-Verdi, really breaks through with a tongue-n-cheek slam on the main floor piano players that so many department stores think are important.

With the pianist (kind of a Will Farrell look-alike) slamming the competition and their policies that ignore what the customer wants, the spots drive home a positioning that makes a lot of sense to today’s smart shoppers. Stein Mart’s business has not kept up with its former pace in recent months. Maybe now that they are taking their brand proposition to the consumer, more will visit the stores. Check out all the spots at their site at:
http://steinmart.com/

2. Kohl’s. The store has been a real success story and their latest campaign featuring their Vera Wang collections is not just another “we’ve hooked up with a designer” series. The spots are creative, contemporary and drive home the personality of Vera and Kohl’s at the same time. Another example of how these specialty stores have taken a position that has made them favorites with customers in all demographic and psychographic groups with the money and the smarts to know they don’t have to spend too much for good style and quality. The spots from McCann are not just fashion and they certainly are a lot more effective than the new Macy’s spots.
3. Wal-Mart. After more than a year of fumbling around with more problems than just some new creative, the world’s largest store broke its first spots since naming the Martin Agency its new AOR a few months ago. It’s interesting that most of the news around the agency change and the new campaigns focused on the fact that it was time to replace the long-standing smiling happy face “Price roll back” spots. From what is written, one would think this is has been Wal-Mart’s only advertising message for years. In fact, the smiley-face campaign was never the majority of the spots that have run for the store. Spots featuring employees, customers, suppliers, charities, and events were extremely well-done and which built the trust of the customer were one of the big reasons that the company has grown to be the most successful retailer in the world.

The new campaign gets back to building that trust while still driving home the fact that Wal-Mart saves you money for the things in your life that you like to do. They are well-produced and targeted and I think it’s time for the company to focus its messages on building the trust and quality of the company while saving its customers money. (”Save Money. Live Better”) I’m not sure what they changed with the media plan, but I used to be hit by at least 4-5 messages a week (and I’m not a high television watcher) and now I have only seen these spots in advertising trade publications and video links. Maybe that’s why the performance has been so poor the past several months. You can check it out in Bob Garfield’s column at www.adage.com.

I’ve said many times that retailers tend to think that branding is nothing more than coming up with a new ad campaign and then wonder why nothing happens with the consumer. In these cases, the positioning is right, the stores get it, and the message is creatively succinct.

PUSH PLAY TO VIEW THE SHORT WELCOME VIDEO FROM ALASKA

There isn’t a company in the world today that doesn’t emphasize the importance of customer service. Their annual reports always focus on their commitment (and the commitment of their outstanding associates) to meeting the needs of their customers. Their mission statements, while generally hard to understand, somehow insures that customer service (usually in some other ubiquitous terms) is an important part of the company’s vision.

This week, the New York Stock Exchange released its third annual survey of CEO’s from around the world. It wasn’t surprising that these company leaders believe that meeting and exceeding customer expectations is the key to driving sustainable growth in the future. The survey, as reported in USA Today, said that with so much product (and store) parity it was customer service that could be the key differentiator in the marketplace. Sounds like branding to me! The CEO’s also said that they would budget more dollars for customer relationship management in 2008 to reflect that they are serious about serving the customer. This made me wonder if they were as committed to building and strengthening their brands at the same time. If providing great customer service is exceeding customer expectations at the store, and if branding’s job is defining those expectations, then, why do so many companies feel that customer service and branding are two separate functions? Why do HR and Operations determine the service standards and how to implement them while Marketing is charged with developing a brand strategy that will communicate to the customer what to expect when they come to the store? In fact, everyone should work together to insure that the service standards and the brand promises are in synch with each other.

We see so many fast food retailers put a sign up on their marquees or in their windows saying “Now Hiring, Smiling Faces”. Sure we all would rather a smiling face on the other side of the counter or drive-thru window, but what we really want is someone who will get our order right, get it to us fast, and all the time speak a language we can understand. Efficiency is a lot more important in this industry than a gleeful employee (to the customer that is), Looking at last month’s retail sales results, I noted that the stores that did well in an otherwise slow month, were those who are doing a great job with their brands and exceeding customer expectations at the same time.
Stores like Costco (+7.0% comps), Target (+6.1), JCPenney (+11.0) and Nordstrom (+9.4) all have great brands, and they all provide different levels of customer service. But these levels are consistent to what they are promising to their customers via their brand strategy. Costco provides a different level of service than Whole Foods even though they are in similar businesses. Nordstrom promises more service when they sell a pair of shoes than does Payless. JCPenney has gone very promotional, yet still offers a better experience than most department stores out there.

It’s proof once again that when the brand strategy is developed, all of the departments must agree to it and make sure that they live up to it. “Customer Relationship Management” is popular today and a lot of money is being spent to keep existing customers and geting them to spend more. Don’t make it harder than it is. Branding is about the relationship with the customer and it starts with providing customer service that consistently meets or exceeds our marketing promises