Archives For January 2013

JC Penney continues to be one of the most talked about stories in retail. I wrote about their re-branding efforts in December. I thought it was important to update my perspective. The company launched an aggressive re-positioning campaign last year that so far has failed to revitalize sales at the struggling retail chain. This week CEO Ron Johnson announced that the company would start holding sales and offering coupons again. This is an evolution of the strategy. I think Johnson has learned that sales and coupons are necessary to engage consumers and to provide a reason to visit the store. You can’t always lead consumers to where you want them to go. Change is difficult. You have to give consumers what they want and what they need. It is difficult for a brand to change perceptions quickly. JCP was slow to respond to consumer feedback.

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JCP has made great strides in their re-branding effort. I am a fan of their logo, simplified website, new graphics, in-store shop presentations, wider aisles and less cluttered stores. I find that their retail store experience has improved. Many wholesale brands are hoping that JCP is successful. JCP is an important point of distribution for many national apparel brands.

For JCP to be successful, they need to quickly experiment and test new product, marketing, merchandising and promotional concepts. They must adapt their tactics based on what’s working and what isn’t. JCP has to become an organization that has the ability to quickly build, measure, learn and respond. Adapting the mindset of a startup as outlined in Eric Ries’ Book “The Lean Startup” is critical. To survive and succeed, JCP will have to respond to consumer feedback at the speed of a Lean Start Up.

Will JCP’s Re-Branding Initiatives succeed?
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Over the past month, I have written about brands that have a compelling purpose and an ideal that positively impacts society. Research has shown that brands who live up to a compelling brand ideal deliver stronger revenue growth than businesses who don’t look to positively impact society. One of the brands that embodies this spirit is Dove Beauty Bar.

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In 2004 Dove commissioned a research study called “The Real Truth About Beauty” to more deeply understand the relationship of women, beauty and well-being. The results of the study were very surprising. Only two percent of women interviewed considered themselves to be beautiful, while the majority placed themselves in the average or below average category. The study found that women felt disconnected from the way culture today describes beauty. The study found that women held different criteria for beauty than popular culture. Women see emotional qualities, character and individuality as equally expressive of beauty as the narrow physical aspects of beauty that currently dominate popular culture.

Dove’s Brand Purpose is to celebrate every women’s unique beauty. Dove is committed to building positive self-esteem and inspiring all women to reach their full potential. In 2004, Dove launched the Campaign For Real Beauty. The campaign was designed to change the conversation about the need for a wider definition of beauty. In 2010, Dove launched the Movement for Self Esteem to provide opportunities for Mentorship. This campaign has had a positive impact on women and generated strong sales increase. Dove’s global sales exceed $2 Billion Dollars annually.

Personally, as a father with young girls, I applaud what Dove has done. I am surprised that more brands don’t take a courageous approach to building an emotional connection with consumers based on a compelling purpose.

In your opinion, can brands have a positive impact on society and generate revenue increases?

Innocent Drinks is a UK company that was founded in 1998 by three Cambridge graduates. It has grown into the number one smoothie brand in England. Their revenue now exceeds 100 million pounds. Richard Reed, Jon Wright and Adam Balon started Innocent after successfully selling smoothies at a music festival. While selling drinks at the festival, they put up a sign asking people if they thought they should give up their jobs to make smoothies. They put up a bin saying “Yes” and bin saying “No” in front of their booth. They got people to vote with their empties. At the end of the weekend, the Yes Bin was full, so they resigned from their jobs and built a brand.

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I became aware of Innocent Drinks last year when I read Jim Stengel’s book “Grow”. The fundamental premise of Grow is that successful companies are organized around Brands Ideals, a shared purpose of improving people’s lives. Companies that organize around a shared goal of improving people’s lives are the fastest growing businesses. Innocent is a brand built around the ideal of trying to make people healthier.

Innocent was formed with the very simple idea that every product contains 100 per cent pure, fresh ingredients and no fruit concentrates. Their brand purpose is to make natural, delicious food and drink that helps people live well and die old. They demonstrated a commitment to a brand ideal, a consumer focused purpose and a culture that encouraged creative thinking. They developed a business based on sustainability and doing the right thing. They donate 10% of their profits to fund rural development projects in the countries where their fruit comes from. They wanted to make it easy for people to do themselves some good. And to leave the planet a little better than they found it.

Innocent is a values driven organization. Their five values reflect what they are, how they try to do things, and want they want to be in the future.

  • Be Natural – Not just our products, but being natural in how we treat each other and how we speak to the most important people – our drinkers.
  • Be Entrepreneurial – innocent began as a small, entrepreneurial company, and nothing much has changed. We aren’t afraid to do things differently, and we’ve never given up on a good opportunity.
  • Be Responsible – We keep our promises, are mindful of our impact on our community and our environment, and always try to leave things a little bit better than we found them.
  • Be Commercial – We wouldn’t be here if we didn’t keep our eyes on the numbers at all times. Ultimately we want to deliver growth for us and our customers too.
  • Be Generous – This means giving honest feedback to one another, taking time to say thank you, and where we can, donating our resources or money to those who need it more than us. It’s that simple.

Is you company or brand organized around a shared goal of improving people’s live?

Ogunquit is a small coastal town in Southern Maine that is a popular summer destination. The name Ogunquit means “Beautiful Place by the Sea”. There are many great places to visit including the beach and the Marginal Way. A couple of years ago on a trip to Ogunquit, our friends introduced us to a magnificent place called the Harbor Candy Shop. It’s worth visiting Ogunquit just to experience the Harbor Candy Shop.

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The Harbor Candy Shop on Main Street is a special place. When you walk in the door you feel like you have entered a small European Candy shop. The smell of chocolate and displays of candy are amazing. Harbor Candy produces fresh chocolates daily. If you love chocolate, Harbor Candy is a must stop destination. They are also many types of non-chocolate candies such as licorice, jelly beans and gum drops. Harbor Candy is a family owned business that has been in Ogunquit for 52 years.
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Personally, I love small independent shops that provide an excellent product and an amazing customer experience. I enjoy businesses with great stories. Every time we visit, we walk out with a bag of tasty treats. We also look forward to our next trip to Harbor Candy. This is my favorite candy shop.

Harbor Candy was founded in 1956 by George Sotiropoulos. In 1960, they moved into their current location on Main Street which had been an old A&P Market. The family takes great pride in the products that they produce. Their ingredients are carefully selected. They utilize superior quality chocolate, pure vanillas, butters, dairy cream and fresh eggs.

Who is your favorite independent specialty retailer?

The North Face is one of the most popular apparel brands on the planet. Worldwide sales exceeded $2 Billion in 2012. It is amazing how popular the brand has become. The North Face has become a must have for high school and college students who wear its products to keep warm in the fall and winter months. When hip hop stars wore North Face jackets in music videos, the brand increased in popularity. The brand has done a great job of staying true to its original purpose of providing high quality, functional innovative products for outdoor enthusiasts. The brand’s purpose is captured by their tagline “NEVER STOP EXPLORING”.

Yesterday I was watching the X Games while working out. I saw a commercial for The North Face. I wanted to know more about the brand’s story.

The brand has an interesting story and unique history. There were times that the brand almost didn’t make it. The origins of The North Face Brand over forty years ago is a classic San Francisco story. In 1966, Doug and Susie Tompkins, two hiking enthusiasts, followed their passion and decided to open a high-end ski and camping supply store in the North Beach section of San Francisco. They named it The North Face because the northern side of a mountain is the coldest and most formidable to climb. Legend has it that the Grateful Dead performed at the opening party.

In 1968, The North Face moved to Berkeley on the other side of San Francisco Bay. The company then began to design its own brand of technical mountaineering apparel and equipment. The brand developed a following among outdoor athletes and began sponsoring expeditions to some of the most remote parts of the world. The brand has always focused on the needs of outdoor athletes. For 20 years, the brand experienced rapid growth. In the late 80s Jim Fitfield a former EMI record executive took over the company. By the time Fitfield left in 1999 the company was on the verge of bankruptcy. By 2000, the company had sales reported sales of $238 million and a loss of $100 million. In 2000, the VF Corporation purchased the company for a bargain price of $25 million. The acquisition by the VF Corporation has helped fuel a rapid expansion over the past ten years.

Today The North Face employs over 400 passionate outdoor enthusiasts in the Bay Area. The company has contracts with over 70 athletes who provide input on product design and testing. The company remains focused on its core purpose of developing innovative products for outdoor enthusiasts. The brand seems poised to continue its success.

How many pieces of North Face product do you own? 

 

This morning it is bone chilling cold in the Northeast. It’s the third straight day of sub freezing temperatures. I am enjoying several cups of coffee this morning. According to the National Coffee Association, coffee consumption increased 7% in 2012. Coffee drinkers consume an average of 3 cups of coffee a day. One half of the population drink espresso, cappuccino, latte or iced cold coffees. Specialty coffee sales are increasing 20% per year. Young people between the ages of 18-24 have increased their coffee consumption.  According to the latest National Coffee Drinking Study from the National Coffee Association, 40% of 18-24 year olds are drinking coffee each day — this is a sharp rise from the 31% of this age group who said they enjoyed a daily dose of java during 2010.

The opportunity for national, regional and local brands is huge. Starbucks, Dunkin Donuts, McDonald’s, Peet’s and Tim Horton are major players in the retail coffee market. Several of these brands have recently announced major expansion plans.

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Independent coffee shops make up a huge segment of the market. People tend to be very loyal to their brand of coffee and their local coffee shop. They value the coffee, service and sense of community. In 2011, Zagat published a list the ten coolest coffee shops in the United States.

http://www.zagat.com/buzz/the-10-coolest-independent-coffee-shops-across-the-us

Personally, I love to discover a new coffee shop when I travel. It provides a great sense of the local community.

Who is your favorite Retail Coffee Brand?

Jockey is an iconic underwear brand that started in 1934 when the company launched the Jockey Brief. The Jockey Brief was inspired by a postcard from the French Rivera showing a man wearing a bikini style swimsuit.  In 1935, the company began selling the Jockey Short in Marshall Fields in Chicago. On the first day, 600 pairs were sold and a legend was born. In 1982, Jockey introduced Jockey Cotton Briefs for women. Today, Jockey is marketed in more than 120 countries. The brand markets underwear, intimate apparel, socks, thermals, sleepwear and activewear. Products are offered for men, women and children. Since 1935, Jockey which is located in Kenosha Wisconsin has been an innovator in the underwear category. Today, Jockey is still a family owned privately held company that values integrity, passion, quality and loyalty.

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I had the opportunity to work as the Vice President of Marketing for Jockey in 1999 and 2000.  At that time, the underwear and intimate apparel category was very competitive. Brands such as Victoria Secret and Calvin Klein were selling sex appeal. Tommy Hilfiger and Ralph Lauren were marketing a lifestyle image. Traditional brands such as Hanes, Fruit of the Loom and retail store brands were aggressively promoting price. My challenge as the Vice President of Marketing was to develop a long term sustainable position for the brand that would help differentiate it from competition and help generate growth. We asked a lot of questions. What was the brand going to be in the future? Would Jockey become a sports brand? Many people still associated the Jim Palmer ads with Jockey. Michael Jordan at the time was promoting Hanes Underwear. Maybe we just needed a super model.

In search of the answer, I talked to everybody in the company who would give me time. I reviewed all the old ads. I looked at the data to see what products we were selling. I read every email that the company received. We conducted research. I partnered with a fashion magazine that invited readers to share their Jockey story. The answer was simple and obvious. For loyal fans, the brand was about comfort. Yes, physical comfort was important but to the brand’s fans, Jockey was also about emotional comfort. All the company’s efforts were then focused on delivering on this purpose.

The company’s purpose is to “satisfy the human need for comfort”. For the past 12 years, the leadership of Jockey has stayed focused on delivering on that purpose.

What products or brands come to mind when you think about comfort?