WSL from the Edge: October 2007

Martha @ Macy’s: Everyday or Exclusive?

Macy’s department store “relaunched” itself last month. The relaunch advertising campaign features a cast of celebrities and their brands sold at Macy’s. There’s Sean Jean, Tommy Hilfiger, Donald Trump, Usher, Kimora Lee Simmons’ Baby Phat, Emeril,amongst others, and…drum roll… Martha Stewart.
The new Martha Stewart Collection is interesting for a number of reasons. First, her 2,000 items for bath, bed, kitchen, tabletop and furniture put Macy’s back into the Home category in a big way. Second, she/her brand is the focus of the new national Macy’s message, the linchpin for all the other designers/celebrities featured. And third, and most interesting, Macy’s is using Martha Stewart at a time when the Martha brand has become ubiquitous. The collection may be “Only at Macy’s” but the brand/name is certainly not exclusive. You can now find Martha’s craft products at Michael’s, furniture at Bernhardt Katonah, food soon at Costco, wines at Gallo, and home products still at Kmart. As well, she continues to offer products on her website and in her catalog.
The Martha Stewart strategy of taking her brand name everywhere is, in many ways, a necessary 21st century retail strategy. Today’s retail world is fragmenting dramatically. Shoppers sashay seamlessly from one retail channel to another to buy anything and everything. So, in order to succeed, a brand needs to be in lots of places if it’s to catch shoppers’ attention.
However, this approach raises the question how much expansion is too much expansion? How far can you take a brand before it looks/feels/is commoditized? From a retailer point of view, what does it mean when your big exclusive (Martha) is everywhere at different price points?
The question really hit home when Kmart ran a television commercial for Martha’s Everyday line of bedding during the same program as the new Macy’s TV commercial ran. You have to take your hat off to Kmart for riding on Macy’s coattails. However, I’m sure Macy’s executives had a conniption!
What about from a shopper point of view? American shoppers are very savvy about what’s worth paying a premium for and what’s not. So the key for Macy’s, and Martha for that matter, is to ensure not only that the Martha products at Macy’s are different, with discernably better quality, but also that the store experience is too. Otherwise, shoppers may opt out.
Isn’t it just amazing how quickly this retail world keeps spinning?

KioskKiosk: Retail in a Web 2.0 World

In a world of big boxes, the smaller, innovative ones with an intimate, personal feel really stand out. Consider Kiosk, founded by Alisa who loves to travel and shop. In her mini store in SOHO, NYC, and at (KioskKiosk.com), she sells well-designed, simple products she finds as she travels around the world.
Her view is that in an over-designed, over-hyped world, people really appreciate simple things presented well. Which she does.
There are usually no more than 20 products per trip featured and for a limited time only. All are presented on simple wood shelves or in whimsical displays. There are handwritten signs and messages throughout the space. The story of each product is told on a simple card, as in a museum or gallery. Each story is very personal. For example, in July she featured products from her German trip. One was a white dishtowel for $19.00 (really), an alternative, she notes, to the more garish ones usually available in U.S. stores. “It reminded me of starched aprons and well-mannered waiters…and a delicious meal I had of trout, cabbage and potato…”
She’s just back from a trip to Finland with her usual eclectic offering of everyday goodies—a bike reflector, a carpet beater, honey, colorful notebooks and cards, a fishing line, soap, a kettle, a vintage baby vest, gym shoes. And that’s only half of it. The collection is available until February. Then she’ll move on to another country.
Most products sell out quickly in spite of the fact that they’re not cheap. What makes them worth the price is that you feel as if your friend has gone on a wonderful trip, has come home and shared her experience and goodies she found along the way.
Her website enhances the intimacy. She features places she ate, places to stay, galleries, etc.
It’s retailing in a Web 2.0 world.

Happy Ever After

Have you noticed the uplifting messages some retailers are now sending shoppers? The best example is Target’s new advertising campaign, “Live Long. Happy” where everyday products provide everyday good health and cheer. Also worth noting are JC Penney’s “Everyday Matters” and Wal-Mart’s “Save money-Live better.”
Each has responded to a key trend we identified in our 2006 How America Shops Mega Trends report: We are living and shopping in a “Never Normal World.” We noted then that consumers would respond to retailers who provided emotional certainty, who were trustworthy, who understood that shoppers wanted an emotional connection, an emotional lift beyond the deal.
U.S. retailers were actually slow to get this message. Not so in Japan. Two of our favorite “happy” retailers are Japanese, both convenience stores. We saw Three Minutes Happiness in Tokyo a couple of years ago. It captured our hearts with its promise. How believable. No attempt to over promise that life would be transformed by shopping here. Just simply recognizing that getting chores done in a pleasant, easy, rewarding environment could make you happy. Very 21st Century.
Last year, another “happy” C-store opened in Tokyo. Like many American women, most Japanese women are not comfortable in the typical C-store. So, convenience store operator am/pm Japan opened HAPPILY, Lady’s Convenience. It takes a feminine approach to convenience, offering an extensive selection of cosmetics and beauty products, nutritional and dietary supplements, fresh juices, and a water bar. The store has a large, clean bathroom, with free beauty samples and a full-length mirror. (So simple to be happy.)
The big happy message here is that in a “Never Normal World” a little happiness, goes a long way. But… it needs to be delivered beyond the media message, right into the store.

Building Loyalty: Even the Mighty Can Stumble

Once upon a time in recent retail history, a very loyal customer heard about a new product to be launched by one of her favorite brands, and decided to be one of the first in line to buy it. Let’s call her “Lola Loyalist.”
Lola Loyalist had purchased many products from the company for both business and personal use, even in the days that said company was struggling to stay in business. A real loyalist.
One late summer day, Lola Loyalist went off to the company’s store and purchased the new product at $599 + tax. She liked the product a lot. It simplified her life—she had less to carry, it was easy to use—and was cool, a badge of honor. Worth the price of being an innovator.
Then, one month later, the company announced it was cutting the price of the new product by $200. Yes, $200. Yes, only two months after she had purchased it. Not to be naive, Lola and all shoppers know that the price of most new innovations is reduced over time. Flat screen televisions are a perfect example. But rarely does this happen two months after the product is launched.
After many complaints from Lola and others, the company did offer a $100 in-store rebate to those who had paid the launch price. If you’re wondering why it was only $100 and not the full $200, rumor has it that this was all about helping offset the cost many had to incur to switch from their current telephone carrier to AT&T. By now you’ve figured out this is about Apple’s iPhone.
By now you’ve figured out that there are actually lots of Lolas—also Lloyds and Larrys—who are not very happy with the way Steve Jobs, co-founder and CEO of Apple treated his brand loyalists.
To add insult to injury, there was no “sorry” or “by your leave” offered to Lola, Lloyd and Larry, et al. It was even left up to their ingenuity to know when and where to get their rebate. An Apple store employee said, “Uncle Steve hasn’t told us anything yet. So just keep coming back, or check the Website.” In the meantime, unfazed, unrepentant, Apple brilliantly marketed its new iPod touch and announced extraordinary financial results.
What’s the moral of this long, sad tale? Well, we’ve learned from 20 years of our How America Shops research that loyalty is a difficult and intangible concept to sustain, especially today when there are so many things to buy, so many places to buy them.
Shoppers tell us the top four factors that build and retain their loyalty are: 1) Customer service; 2) Treats customers with respect; 3) Has a well-trained staff; 4) Values my business.
On those measures, Apple failed with its launch of the iPhone.
If there’s one thing we know about Lola, Lloyd and Larry, and all brand loyalists, it’s that they have long memories. Even the best brands in the world are vulnerable when they disappoint.

The Pet Opportunity Continues into 2008

We know, we know… you’re tired of hearing us talk about how pets are such an important opportunity for retailers and manufacturers. But they truly are.
At the Gottlieb Duttweiler Institute (GDI) Retail Conference we attended in Zurich, Switzerland, in September, pets raised their sweet little heads again. According to Torsten Toeller, managing partner, Fressnapf, “Every trend that works for people will work for pets…aging, weight loss, organic, indulgence, efficiency….” Consider, the Spa Bath for $35 vs. Wash N’ Go for $9.99. Rent a Pet for older communities that need companionship. Gourmet pet food. The dog walker (i.e., fitness trainer). Etc. Etc.
Obviously, Target believes this. It just delivered a pet-exclusive, direct-mail piece featuring everything from food, clothes and home décor to Halloween costumes and treats.


Oct.
2007
Posted in Bitz
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