Go Back
  • Posted by: Bill Chidley on Monday, April 8 2013 05:08 PM | Comments (0)
    Best Buy

    As Brand rivalries go, Apple vs. Samsung has the makings of an epic one to watch. It’s the Ford versus Chevy of the age.

    When I first heard of the Samsung Experience Shops that Best Buy plans to roll out in May, the easy judgment was that it’s yet another “me too” move on Samsung’s part. The comparisons are inevitable and differences will likely vary by degree. That this is a great move for Samsung and a possible shot of adrenalin for Best Buy is also undeniable.

    Brands benefit when they can become experiences and retailers benefit when they get an exclusive leg-up with hot brands. the interconnectivity of mobile devices, TVs and content to a brand like Samsung could be further leveraged, and consumer experiences of aspects of what the brand offers today’s consumer broadened. An immersive experience with trained consultants is fast becoming a necessity to demonstrate innovation.

    But is the bigger story the implication for Best Buy and how consumer electronics brands and retailers thrive together in the future?

    Best Buy began as a category killer for electronics and an antidote for the hard sell commissioned sales experience of the day. When the rest of the electronics retail landscape was literally “showrooming” products, Best Buy was allowing shoppers to buy from inventory on the floor at great prices, with a helpful unbiased staff. There were no three-part invoices, no pick up counters and no salespeople who made you feel stupid. It was refreshing, lots of brands at great prices.

    Bill ChidleyInterbrand Design Forum actually designed the second generation stores with Best Buy and it was an objective to communicate a breadth of brands, because selection was king. Best Buy was a hot concept and well capitalized, opening many stores to cover the market, so manufacturers clamored to get slotted on the shelves. In fact, Best Buy was the retailer where Samsung came into preeminence and ultimately stole Sony’s thunder in the consumer electronics category.

    Brands were merchandised shoulder-to-shoulder and competed on price and features. It was a brand party that Best Buy hosted where the bulk of shoppers decided who was cool and who was not.

    In 10 years local Best Buy stores could look like mini Consumer Electronics Shows. With the advent of Apple Shops, Samsung Experience Shops and likely more shops to come from other brands, what is Best Buy’s role now? The current (old) model provided a shopper experience like a grocery store where shoppers navigate from store, to category, to subcategory, to brand. With the proliferation of branded shops, the shopper experience is shaken up.

    The implication is that shoppers must navigate by brand first and foremost. This means that the role of Brand in the shopper decision is amplified and brands will need to aggressively clarify what they offer and their propositions. Brands will need to divert marketing dollars to retail experiences and Best Buy, likely led by consumer insights, will need to arbitrate and define which brands make sense to have experiences and which do not.

    Ultimately Best Buy could evolve into a confederation of branded experiences with fewer and fewer opportunities to define their own value proposition in the mix, like a convention center for branded product experiences. Traditional retailers too have been playing with the in-store individual brand experience, including Macy’s, JC Penny and Target, featuring celebrity brands such as Martha Stewart and large branded displays for brands such as Starbucks, a retail giant in its own right.

    Best Buy may likely be held hostage by the needs of the brands to use their venue to tell their stories as much as close sales. The implications could be huge for Best Buy and retail. Demand creation will change, shopper experiences will change, business models will change, marketing budgets will be reallocated and retailers will redesign their organizations around this new Brand Experience focus. That is how I see what appears to be a benign rivalry massively influencing the bigger consumer electronics landscape.

    Bill Chidley is SVP, Executive Consultant, Interbrand Design Forum.

    Post a comment

  • Posted by: Bill Chidley on Friday, March 8 2013 05:32 PM | Comments (0)

    Martha StewartAlmost exactly 10 years ago I had the surreal experience of touring a Kmart store in Michigan with Martha Stewart. We were engaged with Kmart doing strategic work on their retail prototype design, and collecting Martha’s input on the current state of affairs was a required part of the process.

    As I read the coverage of her court testimony in the Macy’s/JC Penney/Martha Stewart Living Omnimedia proceedings, I am not at all surprised by Martha’s apparent nonchalance in casting off or minimizing her current retailer relationship. Now, as was 10 years ago, Martha is focused on execution and bringing her brand experience to life in the most controlled way, regardless of the consequences or the retailer's needs.

    Former Kmart CEO Joseph Antonini had “discovered” Martha and enabled her persona and eventual brand to flourish there, yet during our store tour she was not sentimental. Instead she focused entirely on the way her brand was being positioned, merchandised and operationally supported. She was visibly frustrated that she had to abdicate control to Kmart where the experience of her brand mattered most- in the store.

    I can respect why Martha Stewart saw Macy’s as a better fit for retail experience, shopper demographics, margins and overall creative extension of her brand’s potential as a style leader than Kmart. But the pesky issue of control has apparently lingered, and when Ron Johnson offered MSLO a shop concept at JC Penney, this represented the Holy Grail. The opportunity to create an in-store brand boutique, a pure Martha Stewart experience, inside of more than 1000 JC Penney locations wasapparently worth any risk of agitating Macy’s.

    I can imagine the possible creative logic as well; this could potentially be good for Macy’s too. Perhaps if Martha could create a clear vision of her brand idea and grow demand for her merchandise, both JCP and Macy’s could benefit long term. The ends justify the means: better brand experience and brand clarity, with equal or maybe even additional points of distribution.

    Regarding brands, it seems that Martha and Macy’s are misaligned on a core view of their respective businesses that is not uncommon at retail. Martha Stewart (and MSLO) thinks fundamentally as a brand and Macy’s thinks fundamentally as a merchant. One focuses on creating demand and the other on fulfilling it. Is Macy’s a brand? Absolutely. Is Martha Stewart a merchant? Sure. This is about bias, not polarity.

    Martha Home

    Retailers see brands such as Martha’s as potential assets that drive traffic, or share of wallet, in highly brand-driven categories like fashion and home where style authority is important. Unique merchandise and exclusive brands can tip the scale with shoppers and add up to retailer preference at holidays and other peak selling seasons.

    On the other hand, brands see retailers as points of distribution that ideally align with their target audience, delivering a steady stream of shoppers who will recognize their value, appreciate their design, and are willing to pay for it. But alas, over time each party desires more from the relationship.

    Retailers want to leverage the traffic-driving power of the exclusive brands to expose shoppers to their own private label variants to maximize margins. Brands seek more control of the experience and merchandising to differentiate and sustain a premium. Brands such as Martha Stewart’s, which need the initial distribution that an exclusive deal promises, ultimately desire more distribution and, in Martha’s case, more control of their brand experience to create value for investors.

    Often a brand’s desire for distribution results in an erosion of the brand’s value and accusations of being a “sell out” from its fans. Other times a brand that aggressively seeks additional retailer distribution will see a once friendly exclusive retail partner turn on them and introduce new competitors, or private label alternatives that co-opt their unique brand propositions.

    For those of us in the branding world, Martha Stewart’s plight is a conundrum. It appears that her desire to move to JC Penney is not necessarily about distribution, but about being a better brand marketer and potential revenue.

    Unfortunately Martha’s public profile and a society quick to judge via the media may do more damage to her brand than just a punitive settlement on the balance sheet. This could be one of those rare situations where a desire to drive brand could backfire dramatically.

    So the plight of Martha Stewart and her brand leave us with a great illustration of the tension point between the need of a business to get distribution and the need of a brand to successfully manage the retail experience. Martha Stewart and her larger than life public persona is certainly a polarizing factor in this particular case and will cause a temporary setback for the brand that it will need time and commitment to overcome.

    If this same scenario was playing out for a Brand like Calphalon, Swatch or Coach, would we be as focused on the ethics? Or would we be applauding them for trying to better manage their brand experience?

    Bill Chidley is SVP, Executive Consultant, Interbrand Design Forum.


    Post a comment

  • Posted by: Nicole Briggs on Tuesday, July 3 2012 08:52 AM | Comments (0)

    As America gets ready for 4th of July festivities, planning picnics, fireworks, backyard grilling or a swim in the ocean or pool, have you ever noticed how cool the trademarks are that surround this glittery holiday? Let’s take a walk down trademark lane, Independence Day Edition.

     4th of July

    Macy’s Independence Day fireworks display in New York City is one of the best known Independence Day shows in the world. It’s so big Katy Perry will be performing this year. The event is called Ignite the Night and I love the name. Although it’s short and sweet, it does the job. It grasps your attention. It leaves you hoping your night will go up in flames, in a good way. Macy’s has not filed for a trademark application for the tagline, maybe because it will be short lived.

    Macy’s Ignite the Night Independence Day celebration is not to be confused with Ignite Your Night owned by GoAmerica, Go Beverages, LLC for alcoholic beverages. Even though some may ignite their night with alcoholic beverages, there’s no confusion here. Similar trademarks may exist at the same time, if each one is assigned to different classes of goods/services, and provided that there is no likelihood of confusion.

    Crazy Exciting on Steroids 

    Have you ever reflected on how awesome some of the fireworks names are? My favorite trademark is Crazy Exciting on Steroids owned by Jake’s Fireworks. Registered in 2010, these showery sparks are sure to be on shelves (where they are legal of course).

    A few more names that have made me giggle: Sky Bacon, filed late 2011 by Spirit of ’76, LLC; Poopy Pooch (very curious to see how it works), pending application filed by fireworks powerhouse B.J. Alan Company; and a name that warms the heart, Christmas in July, another pending application filed by B.J. Alan Company.

    Black Cat 

    Oldies but goodies: Do you remember Black Cat firecrackers or smoke bombs? Black Cat firecrackers and parachutes are owned by Li & Fung (B.V.I). They have a date of first use of 1952 and have been registered since May 16, 1967.

    Happy Independence Day!

     

    Nicole Briggs is an Associate Trademark Consultant.

    Post a comment

  • Posted by: Bruce Dybvad on Monday, March 15 2010 05:29 PM | Comments (0)

    Friday’s announcement by the U.S. Commerce Department that retail sales unexpectedly grew in February comes as a surprise. And yet, it didn’t catch America’s top retail brands off guard. Interbrand Design Forum’s 2010 ranking of the top 50 retail brands revealed that the top 25 increased significantly in value—although one would assume the Great Recession might have had the opposite effect, since the consumer stayed away from retail in droves.

    Rather than over-reliance on price cuts to lure beleaguered shoppers, companies such as the top three–Walmart, Target and Best Buy—spent the downturn refining their brand. That is, investing in the things that matter and abandoning those that don’t.


    Target, for example, maintained differentiation through high-fashion apparel designers, intensified focus on its new up & up private label line, and is remodeling hundreds of stores to give customers a better shopping experience. Now that consumers are spending just a little more freely, Target’s customers will have their brand choice reinforced with new product and a fresh environment.

    Even in downturns, the most valuable brands make decisions that get the most out of their store base, because they understand what they are trying to be. With this clarity of purpose comes a detailed understanding of how operational actions influence customer behavior and choice.

    February sales surged across all categories, including department stores, which Macy’s for one is poised to leverage, having spent the past three years holding to a strong strategic brand direction through thick and thin. All through the downturn, Macy’s was busy rebranding 330 regional stores operating under ten different banners, and fine-tuning its local assortment program.

    Furniture stores, consumer electronics, and hardware stores saw big gains as well. For example, Lowe’s hasn’t waited idly for home values to recover. It has upgraded its website to showcase its brand as a source of inspiration. It has been encouraging DIYers to turn to it for ideas, how-to videos, and project calculators.  Lowe’s is also partnering with HGTV, and launching a magazine called Lowe’s Creative Ideas. Again, keeping shoppers dreams alive in the downturn has them well positioned to take the lead in the upswing.

    Even though the unexpected sales rise is hitting all the big chains, those retailers that waited too long to surround the purchase with something relevant—besides cheaper prices—might not be creating value for their brands going forward.  You can still get the American consumer to trade up and continue spending if the value equation and brand differentiation is right. And if you’re managing your brand for value, like the powerful asset it is.

    Post a comment