brand as business bit:  A couple of sound bites connected for me recently.

In a recent Bloomberg BusinessWeek piece entitled, “Has CNN’s All-News Strategy Become Old News?,” Alex Sherman writes about the cable networks’ reliance on “the story” to drive its audiences, unlike other networks that balance breaking news with opinions and personalities.  Phil Grffin, president of MSNBC, observed:

“CNN is the place for breaking news.  Unfortunately you become totally dependent upon it.”

Then this week’s announcement about J.C. Penney’s disappointing first quarter results, CEO Ron Johnson, explained “Our No. 1 issue is traffic.” Acknowledging the transition to “Fair and Square” pricing was tougher and taking longer than they had estimated, WSJ/Market Watch’s Andria Cheng reported. Johnson said:

“Coupon is a drug…We got to learn to drive traffic in different ways.”

Both of these laments are commonplace among organizations that rely on a single lever to drive traffic – news in CNN’s case, deals in J.C. Penney’s.  For other companies it’s new products, advertising campaigns, sales incentives, or external factors like school schedules or holidays.

Such reliance is like an addiction, producing high highs (sharp sales spikes) and low lows (deep sales valleys.)  And like addictions, the consequences of such volatility are far reaching, wreaking havoc on supply chain and staffing, and trying shareholder patience.

A strong brand can offset dramatic swings by sustaining consistent purchase consideration levels.  Just look at Apple stores – consumers pack those houses day in and day out.  Certainly lines form and sales jump when a new product is released and stores are more crowded during holiday season, but the company isn’t dependent upon news or any other single lever to drive traffic.  Instead, the brand has formed such a rich bond with customers that they will make a visit just to soak in the brand experience. For companies like Apple, their brand is their drug – it’s one addiction that’s actually desirable (well, that and chocolate!)

For me, Tiffany Shlain is a source of great insight and hope on culture, communication, technology, and life, so I’m pleased to share my recent interview with her:

Honored by Newsweek as one of the “Women Shaping the 21st Century,” Tiffany is a filmmaker, founder of the Webby Awards, and co-founder of The International Academy of Digital Arts & Sciences.   Connected: An Autoblogography about Love, Death & Technology, her feature documentary about the good, bad, hope of connectedness, launched last year.  This year, she is working on a new film series which is paving the way for a new kind of collaborative filmmaking she calls “cloud filmmaking.”

She talks with me about:

• why this is the most exciting time of our lives
• how it’s a human desire to be a part of something
• how companies can join in the participatory revolution

So take a listen.  Also check out Tiffany’s website, Twitter feed, and Facebook and YouTube pages — and be prepared to be challenged and inspired!

other interviews:

• Peter Fader on Customer Centricity
• Martin Lindstrom on Marketing Manipulation
• John Gerzema on Connecting with Today’s Consumer

What makes a store more than a store?  What makes a breakthrough brand experience at retail?

These are questions that companies with brick and mortar assets wrestle with as they continue to lose share to online competitors or to those with mobile capabilities (smart phone-enabled mobile commerce as well as IRL roving mobile units and other non-traditional formats).  I’ve been tackling these questions through the last six months as I’ve audited over a dozen new and interesting retail and restaurant concepts.

I’ve been cataloguing my insights from my audits in a series of Brand Experience Briefs.  As I survey my reports so far, I find that the concepts which create memorable brand experiences in their stores have some things in common.  Here are nine criteria of breakthrough brand experiences:

1. a clear and compelling brand story and/or brand promise that’s brought to life. Stores need to embody the essence of the brand and make their differentiation and value clear and compelling.  The brand history and values are conveyed clearly in the design, signage, and lounge area at Patagonia’s Tin Shed store, while The Habit Burger Grill restaurant fails to express a distinctive brand platform or attributes.

brand mural in Patagonia's Tin Shed store

2. target appropriateness.  We’re all attracted to people who are clear about who they are. We respond naturally to their self-confidence. Brands are no different. Brands with integrity and clarity are attractive because they don’t try to be all things to all people or to be something they’re not.  The 77Kids NYC Style Lab is a great example. Everything about the store is targeted squarely to fun-loving kids.  Subway Café, on the other hand, aspires to offer an upscale coffeehouse ambience but that’s not what its customers want, and it doesn’t execute on the concept very well.

3. brand-right assortment.  Some of the strongest concepts are filled with tens of thousands of SKUs, while others offer very tailored assortments.  There’s no single “right” assortment size or scope – it really depends on the brand strategy.  Central Market aims to be a place for foodies, so it makes sense for the store to feature over 700 types of hand-cut cheeses.  Starbucks’s new concept stores use local wines and beers to convey the personal, intimate attributes that the company desires for its brand.

4. interactivity.  Although emerging technology has enabled websites to become more entertaining and engaging, brick and mortar still has the upper hand on interactivity. And the concepts that breakthrough are those that use interactivity to make the shopping experience unique, exciting, and memorable. The LEGO store stands out with features like its Pick-a-Brick wall for kids to dig their hands into cubby holes filled with LEGOs of all different shapes and colors.  However the Walmart.com store misses important interactive opportunities since many products were not available to try or play with.

Pick-a-Brick wall at the LEGO store

5. overt promotion of product quality.  Retailers should stage experiences and use store signage and displays to promote the quality of their products.  The REI store in SOHO sets the standard for this with its areas that enable customers to try products (like an incline walkway in the hiking boot area); Uniqlo uses eye-catching signage to highlight features of its products; and messages about product freshness are sprinkled throughout the Pie-o-logy location.  Steak n’ Shake Signature could learn from these examples, since they have great burgers and shakes but haven’t figured out how best to merchandise and present them.

6. passionate and well-trained employees. Staff who are disengaged (employees at the Walmart.com store seem more interested in figuring out the products themselves than in interacting with customers) or clueless (an order-taker at Subway Café doesn’t know the menu) detract from the experience and damage any hope of brand integrity.

7. distinctive design and décor.  The most memorable brand experiences use design and décor to create a sense of place.  They take a fresh approach to layout and architecture to create a brand world of sorts, they employ interesting materials for surfaces and fixtures to appeal to all the senses, and they use details and decorations to express the brand personality.  REI integrates the historic features of its unique location (the historic Puck building) with digital signage and other contemporary design elements, while Pie-o-logy created its distinctive environment, including mod furnishings and a wall of fun quotes, from the ground up.

Pie-o-logy's distinctive design and decor

8. attention to detail.  The devil is in the details when it comes to retail brand experiences.  Details like Starbucks’s hand-written welcome message incorporating its wi-fi service communicate volumes – so do the plastic utensils at ihop express and the drab dressing rooms at Uniqlo.  Breakthrough retailers sweat the small stuff.

9. extension beyond the four walls.  Retailers that extend their brand experience outside their store make a bigger impact and create longer-lasting relationships with their customers.  A couple of examples:  REI’s active involvement in its community through service projects provides authenticity and personal engagement; the content in Uniqlo’s magalog connects people to its brand attributes and values.

Uniqlo's matalog

I’d love to hear your feedback.  What other criteria contribute to breakthrough brand experiences?  What new and interesting restaurant and retail concepts should we take a look at?  Comments are open!

Also if you and your team need to re-think your brand experience, sign up for a Brand Experience Day.  We’ll head out into the field to experience concepts like these, and then regroup to identify and apply the new insights to your business.  Learn more.

related posts:

• would you like a coffee with that wi-fi
• 12 truths to guide retailing in 2012
• six best practices in retail

brand as business bit:  I got a response to my last “brand as business brief“, Value and Values, that I just have to share with you.  It’s from Kevin Knight, who along with his wife Heather, run Anjou Bakery, a “a thriving incubator of good taste in food” in Cashmere, WA (about 2 hours East of Seattle.)  Kevin writes:

“I am currently re-reading “Setting the Table” by Danny Meyer and at the end of the introduction he says ‘Business, like life, is all about how you make people feel. It’s that simple, and it’s that hard.’  He defines Great Service as delivering on your promise, steps 1 – x, a monologue, what your company sets out to do, etc. Great Hospitality on the other hand is a human dialog that makes people feel good. It’s thoughtful and creative, customized and intelligent.

To achieve all you can be (in life and business) you must be good at both…In our business I try to tell everyone to think of each customer as if they were their grandmother. A bit corny perhaps, but for me that idea sets the stage for a positive interaction.”

It’s because of retailers like Kevin and the hundreds of thousands of others out there who “get it,” that I believe retail is far from dead.  Long live retail!

P.S. (My next “brand as business brief” on brand experiences is coming out next week — don’t miss out — subscribe here.)

brand as business bit:  Last month we lost a great political thinker, James Q. Wilson.  In a tribute to “the pre-eminent political scientist of the last 50 years,” The New York Times described Wilson’s groundbreaking analyses of political behavior.

His work on how organizations offer incentives for people to join and support them seemed an interesting way to think about how brands attract customers:

“He distinguished three types of incentives — solidary (that is, incentives that promote solidarity), material and purposive — and he theorized that the specific type of incentive distributed by a particular group both shapes and constrains its behavior and effectiveness.

Thus, the Junior League provides solidary incentives by emphasizing the social status of and personal interactions among its members, while companies provide material incentives — i.e., money and other economic value — which buy them more tactical flexibility.

In contrast, the Sierra Club’s incentives are purposive, attracting members through its programmatic and visionary ideals. But such incentives also constrain purposive groups, which may lose support if they compromise those ideals by being too pragmatic.” [emphasis] mine

Brands attract people either through social status and community (solidary), value (material), or shared values (purposive) – perhaps the strongest brands use all three incentives?!

brand as business bit:  “Do well by doing good” has become the ultimate rallying cry for corporate social responsibility (CSR) – and case studies from Walmart to Nike to Timberland prove it is possible to benefit society and the bottomline. What’s more, CSR programs can make companies more innovative:

According to research featured in April’s Harvard Business Review, “CSR engagement broadens a company’s access to outside knowledge, market preferences, and new technologies.”  And that in turn helps firms come up with dramatic innovations.  Out of 128 firms studied, companies in the top third in terms of CSR activities brought out, on average, 47 new products a year, while companies in the bottom third brought out only 12.

Glad to see further confirmation of the integral link between values and business growth.

(Here’s my newest Brand Experience Brief — insights and analysis from my audits of new and interesting retail or restaurant concepts.)

It’s always interesting to see how product companies create retail experiences for their brands.  That’s why I’m eager to share my download on the LEGO store.  It’s a solid experience for the LEGO brand, but they missed some opportunities to make it even more engaging.  Take a look and let me know if you agree:

other brand experience briefs:

• Pie-o-logy
• uniqlo
• 77kids

Change is good.  It’s more than good – it’s necessary for growth.  Companies need to evolve their offerings in order to keep things fresh and their customers interested.

But what happens when a company changes its business model in a way that strips away a valuable element of its brand equity?  Is it able to recover lost equity and maintain its appeal?  We’ll find out, given the recent announcement that ShoeDazzle is scrapping its monthly subscription model.

background:  Just three years ago ShoeDazzle made a grand entrance to the e-commerce scene.  The company’s innovative approach was based on offering a personalized selection of shoes, handbags, and jewelry curated by Kim Kardashian to members who paid $39.95 a month.

The company was founded by two attorneys (including Robert Shapiro of OJ Simpson trial and LegalZoom fame) and Kardashian.   Backed by Polaris Venture Partners and Lightspeed Venture Partners, the company turned heads in the tech, retail, and fashion sectors.  Last year it secured $40 million in a financing round led by Andreessen Horowitz.

ShoeDazzle now has over 10 million members.  When you join, you fill out a taste profile which enables the site to curate a selection of products and present you each month with a personal “Showroom.”  Over time, the site’s recommendation algorithm gets more sophisticated as it takes into account your actual purchases and so you end up feeling like you’re shopping from a collection of items handpicked just for you.

That, plus the inexpensive price tag, free shipping both ways, and phenomenal in-box presentation (see below), has generated legion of fans who serve as ambassadors for the brand (recent love tweets include “ShoeDazzle is the greatest thing since sliced bread.  No joke.” “OMG, shoe addiction” and “Just got my first pair of shoes from ShoeDazzle.  IM IN LOVE.”) and recruiters of new customers (members get points and discounts for every friend that becomes a member.)

now:  Given how successful ShoeDazzle has been, it’s no surprise it has spawned a throng of copy cats including Kimora Lee Simmons’s Just Fabulous and Rachel Bilson’s ShoeMint.  And as a result, there’s been some buzz about “subscriber saturation” and questions about the viability of the concept.

Enter Bill Strauss.  The cofounder and former CEO of ProFlowers, was recently named CEO at ShoeDazzle “because of his experience retaining high levels of customer satisfaction at a booming consumer Internet company,” reports an analysis in Fast Company.  “He’s very heads-down and focused on operational execution and delighting the customer at a large scale,” Andreessen Horowitz partner John O’Farrell told the magazine.

Strauss has decided to nix the company’s subscription model.  No longer will customers be required to make a selection each month; everything on the site is simply $39.95.

The move is not surprising, given Strauss’ background.  After all he built Proflowers into an e-commerce powerhouse by leveraging sophisticated technology to dominate search engines and build a highly productive customer database.   And at first blush, loosening the requirements and making purchasing easier would be a no-brainer for any website.

But, ShoeDazzle is more than an e-commerce site.  The brand is about more than getting good product to lots of people for a decent price.  In fact, Fast Company reports that Strauss calls the ShoeDazzle experience “akin to one you’d receive at a high-end boutique, where salespeople know your name and your tastes…ShoeDazzle believes consumers are ready for the more intimate shopping experience they get at real-world boutiques.”

This makes his elimination of the subscription model a curious choice.  It’s a move that seems to have stripped the company of important brand equity levers.  No doubt the change will bring some initial growth, but it represents some risky trade-offs:

- trading status for scale – Strauss explains that “what will differentiate ShoeDazzle in the next phase is building the company out to a gigantic scale.“  Scale may be good for your brand if you’re Amazon or Walmart, but not if you’re trying to serve up an experience akin to a “high-end boutique.”  By no longer requiring a subscription, the company has democratized the experience. The monthly commitment had served as a signal of status and brand exclusivity — now there’s little barrier to entry.

- trading connection for choice – “Some people liked the model,” Strauss says, “but a lot of customers told us they’d like to buy two or three times in one month and then maybe not for a few more months.“  So the new model gives customers more choice.  But it also allows for customers to slip away for months at a time, perhaps even forever.  Even though the subscription model had offered customers the option of skipping a month, most customers still visited their showrooms at least once a month.  Without the monthly commitment, there’s no foundation for a regular connection.

- trading urgency for ubiquity – There’s also no reason for a timely customer response.  Opening up the purchasing model will allow the company to “capture as much of that demand as possible,” Strauss says.  But is getting to a large prospect pool that may or may not be interested in buying at some point in the future better than engaging with a smaller customer base that has committed to buying something that month?

Sure the brand still has the cachet of celebrity – and the personalization aspect is a draw.  But as a writer in New York Magazine observed, “It’s probably only a matter of time before all retail websites follow this practice of automatically recommending things to you based on your size, brand preference, and past purchasing history.”

Last year, Andreessen Horowitz’s O’Farrell explained his company’s position with ShoeDazzle saying, “Like their 1920s counterparts, [founder] Brian [Lee] and his team realized the appeal of serendipity and anticipation.  ShoeDazzle members await the first of the month with its new selection with the same avid excitement Book of the Month Club members must have felt as they awaited the mailman with their latest monthly title…The result is a new and genuinely exciting approach to ecommerce that is transforming the way fashion products are marketed and sold.”

Now, it seems, ShoeDazzle is just another website with inexpensive products.

related posts:

• radical differentiation at lululemon
• retail tensions

What happens when a 125 year old $35BB company wants to get entrepreneurial?  When the company is Coca-Cola, it starts a new business unit, Venturing and Emerging Brands whose mission is to discover “the next big thing.”  It’s the force behind the company’s recent acquisitions of Honest Tea and a new product at Whole Foods, Cascal an all natural fermented soda.

Here to brief us on the group’s efforts is Mary-Ann Somers, VP, Strategic & Operational Marketing, who’s been a dear friend of mine for many years.  Prior to Coke, Mary-Ann held various leadership positions at Colgate-Palmolive, Unilever, Merck and General Mills, as well as being a founding member of an internet health and wellness start-up, so she contributes a unique perspective to her role as an intrapreneur.

In this behind-the-scenes interview, Mary-Ann tells us about:

• why Coke prefers to take positions with brands that are narrow and deep (vs. wide and broad)
• how her team works with user-entrepreneurs
• what “boom-splat” means (!!)

Learn more about Venturing and Emerging Brands at www.vebatcoke.com – and follow them on Twitter at @vebatcoke.

other interviews:

• Justin Mccarthy on Crossing the Chasm at Garmin
• Tiffany Vandemark on Chobani Fit
• John Costello on Behind the Scenes at Dunkin’ Donuts

brand as business bit:  In my contribution to OPEN Forum this month, Why Brand?, I lay out what strong brands do for small businesses.  Although I usually work with larger companies/brands, I believe a brand is any business leader’s most powerful tool for accelerating and sustaining growth.  And so, small businesses should invest in brand development from the start.

In the piece, I explain how a brand can help establish trust with risk-averse customers and how it can help build critical business relationships. Please let me know what you think.