DON’T PAY LESS FOR BRANDING!
KEN BANKS’ BLOG APRIL 2019
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DON’T PAY LESS FOR BRANDING!
By this time next month, the last of the former 4400 Payless Shoe Source stores will be shuttered and another retail brand will disappear from the marketplace…and no one will notice. Since the company announced its closing a couple month’s ago, I’ve been asked a few times for my opinion on why this once aggressive retail chain that had remodeled and re-positioned most of its stores not long ago, failed.
Of course, my simple answer is BRANDING…or the lack thereof. Having worked in the discount shoe industry for the agency handling the Pic n’ Pay Shoes chain, based in Charlotte several years ago. There certainly seemed to be a lot of opportunity for success for a chain like Payless. A closer look, however, showed that it was a tough challenge despite the growth of athletic and casual shoes and rapid changes in fashion shoe styles in the past several years. The problem with a brand like Payless was that the name said it all. It was a brand based on low prices and not much else in the customers’ minds. As I’ve said many times, low prices only get you in the retail ballpark and it’s all the other things that you need to do to form a customer relationship that builds a brand that resonates and makes a difference when someone chooses a store or service. With the intense competition from the discount chains, off-price designers shoe stores, and off-price stores like Kohl’s TJ Maxx, SteinMart, etc., just having your own brand of low-priced shoes wasn’t enough to keep a loyal customer. Add to that the warehouse clubs that feature name brand shoes consistently at least half off the regular retail. Don’t forget the outlet malls that always have a number of shoe outlets and it’s more than a challenge.
I recall a campaign that we did for Pic n’ Pay for their line of athletic shoes. The message was yes, this is a good price but when you compare the features and construction to the same shoe from Nike in a more convenient location, you had a brand statement that made a difference. Pic n’ Pay has long faded from the scene due to being acquired and merged into other brands.
However, Skechers has developed its brand of casual shoes with a brand statement that focuses on comfort and style and lets the retailer do the price promotion. I’ve noted that they have now opened over 3000 free-standing outlet stores and they’ve successfully created a brand selling over 170 million pairs a year and generated over $4.5 Billion in sales. It’s a brand based on comfort, but it has aggressively established itself as a strong citizen of the communities they serve and a sustainability program as well. Then, they market their shoes with effective creative that focuses on the comfort benefit, even if you have big feet like Howie Long. Click on this link to view one of the spots: https://youtu.be/CGhUEYvz8zI
Payless, to me, never seemed to have any other message than price. Its stores were updated but not exciting and their free-standing locations helped build a convenience attribute but they just seemed to be just another retail location with little consumer appeal. Additionally, their marketing never seemed to provide any other reason to buy your shoes there regularly. Price only gets you on the playing field, a relationship builds a successful brand.
That’s what branding is all about. Building a relationship and then providing a reason for being that resonates with your target customer. Unless, a store invests in the product, the outlet, and the experience to differentiate it from increased competition (both in stores and online), it hasn’t much chance. Then, if you can’t make the investment to create a marketing message that reaches your target customer, the store is doomed to become another of the several empty stores dotting our marketplace…and a brand we’ll soon forget
Bouygues Telecom is the French leader in internet and cellular communication and they realize that the real benefit of their technology is enabling their customers to not only share holiday greetings but also to be able to relive the memories of Christmas’s past with their family. This spot translates well using a pop standard with scenes that bring a smile to everyone. Click on the link below
lot of that is due to forgetting to brand themselves in the midst of all the promotion. Macy’s is no exception to that diminishing trend. However, the store continues to maintain important traditions that are memorable part of our Christmas traditions. The Thanksgiving parade, the wonderful Herald Square store windows, and the Believe campaign continue to separate the stores from all the other retailers. Take a look at this video that captures the unveiling of the store window on a snowy night on Broadway. Click on the link below.
Publix has long been my favorite for branding and setting the standard for holiday creativity in advertising. This year is no different. Yes, you can get Turkeys for 99 cents a pound, but you can welcome home your son to a dinner that makes the food special to every family. Click on the link below for this great spot?
this video “spot” Apple creates a new animated special that highlights the importance of Christmas wishes that need to be shared. I didn’t quite grasp the message in the commercial but this is worth the 3 minutes to tell the whole story of what technology can do to help a young girl share here holiday wishes. Click on the link below:
While in my home town, Detroit, for a high school reunion a couple weeks ago, I took a trip down to my undergrad alma mater, Wayne State University, to visit the new Mike Ilitch School of Business Building which was dedicated about a month ago. I was impressed by the building and by its location which was about a mile from campus and right next to the new Little Caesar’s Arena, home of the Detroit Red Wings (which Ilitch owned) as well as the Pistons NBA team. I was impressed by the new arena as well as nearby Comerica Park (home of the Tigers, which is also owned by the late Ilitch’s family). My first impression was “Wow, that’s a lot of pizzas to build these mammoth, modern facilities! Indeed, it is and it’s particularly amazing given the competitiveness of the pizza industry in the US.
and local Detroit favorite Buddy’s for a share of the pizza market. Little Caesar’s established itself years ago by marketing the fact that not only are its pizzas really delicious but that you get two pizza pizzas every time you order one at the same prices Don’t forget the take and bake stores as well which includes Papa Murphy, Straw Hat, and the Sam’s and Costco Warehouse stores). Of course, we all have our favorite local independent pizza places which help make up the over 62 million pizzerias who spread mozzarella and pepperoni in every corner of the US (and the world for that matter). So, what make one pizza shop succeed in such a competitive market place? Sure, there are the multitude of coupons that flood our newspapers, mailboxes and on-line every day. And there are the thousands of delivery cars and vans that deliver hot pies to our front doors (and don’t forget Uber and Lyft as well). However, I believe it’s branding that continues the growth of this popular staple to our diet.
I recall my first pizza job when I was in grad school at Pizza Hut which was a regional player at the time. The key to Pizza Hut’s brand was its special sauce which was confidentially delivered to each hut weekly. We made all the rest of the pie like any other but when we added the herbs and spices to the sauce, the brand took on its uniqueness. Since then, Pizza Hut strengthened its brand with innovative offerings like personal pans, stuffed crust, pan pizzas and unique toppings and amenities.
insure it still gets there hot whether you order delivery or pick up at their state-of-art system stores.
Papa John’s went even further with its “Better ingredients, better pizza” by building on its owner as an icon (although that’s been tarnished lately).
Jet’s built on its Detroit roots by offer a square pan with a crispy crust just like Motown Buddy’s (which was included in my reunionvisit as well).
sheer size of the boat that took all those animals two-by-two according to the Book of Genesis. It’s the same awe that I have experienced as I gazed at cruise ships at the Port of Tampa, San Diego, Miami, and Sitka, Alaska over the years. I just can’t imagine how those mammoth ships with 3000-5000 passengers and crew and all that food manage to stay afloat and weather the storms of the sea day after day. More significantly, I’m still amazed at how the cruise industry—and the brands that make up the fleets—continue to grow every year despite the intense competition from planes, trains and automobiles.
Now, I’ve never been a big fan of ocean cruisers, having only taken two in my life (although the Disney Cruise could make me change my mind). I have taken four European river cruises in the past few years and really have enjoyed that experience immensely and expect we’ll be on a few more in the future. I like the idea of being with only 100-125 other passengers, never being more than 100 yards from shore, having excellent dinners in a first class restaurant, and being able to go ashore to see great cities easily and comfortably.
During the ‘80’s, I never was that concerned that Walgreen’s would beat us in advertising. While they were aggressive with weekly promotions and multi-media budgets, their ads were pretty mundane and repetitive, and they never scored highly in the ad research that we conducted. However, where they excelled was in their expenditure to develop the digital systems that would provide them with more timely sales and inventory data than we could only hope to imagine. This insured that they would have the right items in the right stores in the right quantities. As we learned in our own strategic research, this would be a dramatic competitive advantage as they matched Eckerd store for store and their market share reflected it was working. As Walgreen’s grew and Eckerd dissolved, this capability also enabled them to communicate more effectively and more directly with their customers on an ongoing basis and that has paid great dividends in building loyalty and increased sales per store and per customer.
Industrials companies. However, it is more than just significant revenue growth. Walgreen’s has built its brand on an understanding of what has happened to the US economy and to the country’s consumer buying habits.We are becoming a service-oriented country and with the increased demand for health care products, it has served as a perfect storm for Walgreen’s to grow its market share despite even more competition than ever before.
It was reported this week that Eddie Lampert, CEO of Sears Holdings, was pushing to 
have his separate company purchase the Kenmore and Sear Home Improvement brands/businesses from his troubled retail operation. This is yet another step in the demise of what was once one of the premier brands in American business and certainly one of the legendary brands in the retail industry. The beat continues to go on. Sears and its other struggling retailer have been on a slippery slope ever since Lampert bought the companies several years ago. The only news from the stores has been how many are closing in our markets on a regular basis. It’s long been known that the only value the company has are its real estate holdings. Customers have long forgotten them as a viable option for their shopping dollars and certainly as a place to shop (period).
What is really sad is that the company, in addition to having two of the strongest retail brands for decades and 
millions of loyal customers, also had some of the strongest product brands in the country. Kenmore set the standard for home appliances and when I was at Circuit City a couple decades ago, it was the number one choice for homeowners in appliances and also at the top of mind awareness for most appliance categories. The quality of the brand still is one of the best according to Consumer Reports (thanks to Whirlpool’s manufacturing expertise) and it has expanded distribution beyond its parent company’s stores. However, the lack of branding has certainly taken its toll in the past few years.
Sears was once the place for the things you need for home improvement projects and for the service before and after installation. That, too, has faded away as Home Depot and Loew’s continue to flourish and be the first choice in product and reliability. The company has already sold of its Craftsman Tool Brand (to Stanley/Black & Decker) and it continues to have a strong brand loyalty but was so tarnished by Sears that the private label brands on the big two DIY stores (and Harbor Freight) that the demand has diminished. DieHard batteries became the replacement of choice for auto batteries and flourished when Sears automotive service was a preferred choice. Bad decisions and dishonest practices killed the business and hurt one of the top brands in the industry. I could go on, but suffice it to say that putting a financial person at the top of most retailers is (as the late guru Peter Glen used to say) the first step to failure, while putting a marketer at the helm can bring success.
really a case of having, updating, and maintaining an effective brand strategy that led to the lack of interest by so many customers over the past couple decades. Most big box category-killers (like Toys, Circuit City, Office Depot etc.) opened up to the “wows” of customers who had never seen so much of one category in one place. Unfortunately, as successful brands know, you have to consistently strive to improve and react to the customers in order to maintain their relevance. Price alone only gets you on the playing field. Selection improves on getting trial. But becoming and maintaining a brand that people love, that’s what builds an enduring brand.
Toys R Us had lots of toys, for sure. But their price image never seemed to keep up with their inventories. Nor did the customer service. Nor did the operational excellence as the stores became worn down and tired. There are always new innovations in the toy market and yes, TRU always had the latest trends. However, they never seemed to create an excitement that was present in the department stores during the holidays in their hay day. The company built a destination store near Times Square in New York that rivaled the excitement of FAO Schwarz around the world, but never was able to translate that excitement in its hundreds of branches in the suburbs of American cities. It’s marketing never went beyond it’s original “I don’t want to grow up. I want to be a ToysRUs kid” campaign. Despite efforts to revive the theme over the years. There was no enticement for parents and grandparents to come back and not much youthful excitement of the kids to convince them to go back as well.
I was speaking recently with a long-time advertising colleague and friend and we were talking about the state of retail marketing. He indicated that he thought that all of the hype about Amazon was exaggerated and that brick & mortar retail was still the foundation of consumer selling. I agreed that “no, retail stores were not going to completely disappear anytime soon”, but I felt that the retail landscape had been changed forever. And, I pointed out that Amazon was probably the biggest factor in this retail revolution. Granted, the internet in total was the reason that shopping patterns had dramatically changed, but Amazon has been the leader in the changes in the way people shop more than any other single marketer in the world.
package with those smile symbols on the side should be evidence enough that Americans are shopping more from their laptops and phones than we ever imagined just a few short years ago. And the pattern crosses all demographic and economic profiles with male and females, young and old, rich and poor, etc., etc. and there is no turning back. The disappearance of shopping malls personifies the changing shopping habits, but the delivery boxes demonstrate how we have become a nation of purchasers instead of a land of shoppers more than ever. I have to admit that we receive on average 2-3 Amazon deliveries a week and we don’t consider ourselves online junkies at all. The reason this is so common is simple. Amazon has created a brand that means convenience, time-saving, and savings for just about anything that you want to buy.
I’ve purchased everything from pool pumps to green tea, from auto wheel covers to protein shakes, and more and more. The reasons are simple. 1. It’s easy. I can buy just about anything we need with one click with Prime. 2. Not sure what you need? Search in general topics and you’ll find what you need quickly. 3. Not sure what to pay? You can compare prices at conventional retailers, online, catalogues, you name it…and the savings are usually significant enough that it’s a no brainer.
recognition service has Siri running and fostering a number of other in-home voice service like Google and Home Pad growing at a hectic pace. The other big news recently was the launch of Amazon Go, a check-out free food store that is a game changer in the grocery industry using technology being developed for other high-tech innovations. Over 15 years ago, I attended the National Retail Federation’s annual convention in New
A TRIBUTE TO A GREAT AD MAN AND FRIEND
John Lewis consistently sets high standards for Christmas creativity that reflects their unique partnership strategy for their stores and online business. This year they feature Mox the Monster in a fairy-tale-come-true spot that hits home. The Beatles’ classic tune sets the pace and completes the engaging message.
ALDI has been a leader in food retailing in Germany for over 40 years and it’s making aggressive inroads in building market share in the US. The chain has grown to over 1700 stores in 35 states serving over 40 million customers each month in their simple, streamlined stores and product assortments. Their advertising here reflects that organization but when it comes to branding, the company hasn’t exported its creativity as seen in this spot featuring carrots. Not your most typical Christmas product (unless you’re Frosty) but the veggie makes sense in these UK spots. Take a look by clicking on this link 
M&S (Marks & Spencer) was founded in 1884 as a single-stall retailer that has grown internationally as a multi-channel retailer with 914 stores serving 32 million customers in the UK. It does it successfully by providing a unique British shopping experience and by tying in with a favorite in Britain—Paddington bear. Take a look by clicking on this link 
McDonalds may not be the first place you think of when it comes to carrots (yes, carrots again for Christmas…maybe a new trend in the UK) but the company has always set the standard for great campaigns here in the states but this year the US has seen nothing but breakfasts and burgers while overseas the company remembers that McDonald’s is the #1 convenient fast food store.
NFL Shops may not be the first place you think of at this time of the year, but their merchandise becomes more relevant as the playoffs near. Usually, the branding is tied only into the weekly televised games but this year they have a special holiday message that scores a touchdown in my branding offense.
Coke is a part of many Christmas celebrations and gatherings and its awareness continues to grow each year. This year in Europe Coca Cola gives a whole new meaning to sharing the Christmas spirit not only with your neighbors but good old St. Nick as well.
I hope you took the time to click on and watch these commercials. Not only is it a great example of holiday branding, but they surely will bring the Christmas spirit to you as well.
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