branding cars vehicles

Lincoln Channels 1989 Infiniti Debut

Once upon a time, someone at Ford Motor Company may have known what the Lincoln brand stood for in the customer’s mind. But, that was then. Over the years, defining Lincoln has been a challenge.  In 2019, Lincoln decided the brand would be American Luxury. That was an undefined title. It was left to the potential customer to fill in the blanks. Today, American Luxury is Sanctuary, as in a refuge or a sacred place.

Cars are for driving. It is wonderful to drive a car that is luxurious on the inside. It is wonderful to drive a car that is quiet inside, shutting out all of the street and highway noise. It is wonderful to drive a car that has all the appurtenances of class and status. These are benefits – functional, emotional and social – that we may look for in a vehicle.

But Lincoln does not tell us about these benefits. Lincoln as Sanctuary is left up to the customer to imagine. A brand must own a promise. A brand must have a relevant, differentiated promise that is created by the brand owners. A brand promise relevantly differentiates a brand from competition.  Vague Sanctuary can easily be understood as a benefit of a competitor, Lexus, for example.  The brand promise describes the relevantly differentiated experience that customers can expect time after time. 

Brands that have opted for letting the customer decide what the brand stands for tend to regret that stance. 

Take Infiniti.

In 1999, Nissan began advertising its new luxury vehicle, Infiniti. The ad campaign was gorgeous photography of the car in the woods. The lighting was exquisite. The door handles were remarkable. The feeling was one of, well, sanctuary. There were no words about the benefits of the vehicle. There was just the beauty of the design in a beautiful setting.

At the same time, Toyota’s new luxury vehicle, Lexus, was also introducing itself to the American public. Unlike Infiniti, Lexus focused on the vehicle’s sanctuary-like ride. One of the ads showed champagne classes on the car’s roof never wavering even over a rough road. Another referenced its quiet interior.

For all of the amazing market research at Infiniti, its lack of focus on the actual benefits of driving an Infiniti put the brand at a deficit relative to Lexus. Lexus took off; Infiniti languished. At one point, almost a decade later, there was consideration given to eliminating the brand.

Back to Ford Motor Company, owner of Lincoln.

In the mid-2000’s, Ford Motor Company created a campaign for Mercury – the now defunct brand, a relative of Lincoln. You bought your Mercury at the Lincoln-Mercury dealership. Ford was not able to articulate what exactly Mercury stood for… so in its campaign, the tag line was “Imagine Yourself In a Mercury.” If Ford could not tell you what Mercury was, at least you might be able to create some fantasy. Mercury faded away into automotive history. People may have loved the vehicle, but not even Ford could articulate what Mercury stood for in the customer’s mind.

Why is this history important?

With the current Lincoln campaign, Ford is channeling the same approach as Infiniti and Mercury. Let the customer imagine what driving a Lincoln is like based on beautiful photography, serene-hip music and lofty, resounding, yet amorphous wording. Sanctuary sounds wonderful.

For example, we hear:

The legacy continues. Innovative design is in our nature, and we can’t wait for the road ahead

We’ve shaped one century. Let’s define the next.

The power of sanctuary…

Here is a truism. You know a brand has no idea what it stands for when the words, “the power of…” are used. It is one of those catch-all phrases that ad people use when ideas escape them.

So, what is a Lincoln? A visit to the Lincoln website tells us that the power of sanctuary is elevated peace while driving. The definition ends there. It is up to you to imagine just what peace-while-driving is all about. There is a heavy focus on peripheral services called membership such as Lincoln Access Rewards, Lincoln Access Rewards Visa Card, Travel Benefits, Roadside Assistance, Concierge, Insurance. There is an app – Lincoln Way App – and pick-up/delivery for service visits. 

But what about the vehicle? How does it drive? What exactly is a peaceful interior experience? Are small children part of this peacefulness?

Does this mean that the cars themselves are not unique? Does this mean that because designers and marketers could not articulate the Lincoln brand essence they decided to focus on non-vehicle services? Does a focus on the inside of the vehicle mean that the actual vehicle itself delivers benefits and features that are not relevantly differentiated from competitors?

Features can be copied. A relevant, differentiating brand definition can be owned. Brand features are the key service and product elements that make the brand promise credible. But what is the brand promise? 

Lincoln’s provenance is a business built on quiet, honest, affordable classic beauty. There was no ostentation. Originally, the Lincoln vehicles were practical prestige with luxurious functionality. Although its drivers appreciated the cachet and status, they did not want to feel embarrassed or guilty while on the road. With subtle, classic elegance and a contoured grace, these affordable luxury vehicles were impressive and distinct. 

Somehow, in today’s world, this provenance is missing in Lincoln’s brand articulation. There is no reference to Lincoln’s classic beauty expressed in a contemporary manner either in its public design description or in its articulation of its reason for being. Leaving the brand promise up to the imagination of the customer creates a brand that has multiple, individual meanings. Hoping that this approach will rev the engine of enduring profitable growth in a highly competitive marketplace is a lot of gas.

whirlpool branding

Whirlpool And The Need For Ease Of Mind

Whirlpool makes home appliances. A lot of these home appliances are “smart.” This means the appliances can be connected to your in-home WIFI and stream your behaviors and your appliances’ “health” back to Whirlpool. 

Unfortunately for Whirlpool, it appears that customers are not buying into this “relationship.” Customers have either disabled or not synced the connection. This worries Whirlpool. 

Whirlpool believes the disconnectedness is due to education. Clearly, customers do not understand how beneficial it is for Whirlpool to know what you are doing when you do the laundry. This is a manufacturer’s POV. It is always a problem when the brand believes customers care about your strategy.

As reflected in The Wall Street Journal, Whirlpool wants to reinforce customer bonds with the brand in a category that sees repurchase about every 12-15 years. Whirlpool believes that if the brand messages you with advice or recommends a new part be installed, you will be a customer for life and will consider other products and services from the brand. 

There is nothing wrong with this idea. It is good brand management. But, the connectedness that Whirlpool has created perhaps crosses the privacy line. The lack of “attachment” to the brand could be the uneasiness of knowing that you are being continuously monitored by your washing machine. Recent third-party research indicates that people do weigh the costs of loss of privacy relative to the benefits of being an open source of personal data.

Trust plays a role. People expect the brands with which they do business to be vigilant with personal information. Perhaps customers trust Whirlpool to do the laundry but do not trust Whirlpool with their in-home behavioral data. It is a possibility. People are willing to accept risks up to a point. Data show that only around 30% of consumers believe brands take personal data protection very seriously. Additionally, 58% of people fear they will be a victim of a data breach.

Further, even when people are willing to provide some personal data, they are less willing to do so when it involves their children. And, laundry involves children, albeit indirectly.

Whirlpool is asking their users to keep the channel of information open 24/7. This is like having a security camera from Walmart in one’s home. Except in this case, the data are not for safety purposes but are being sent to a brand that seemingly wants to use it for their own advantage. Consumers do not see the benefits of having this unwavering eye spying on them all the time. Not hooking up the system is the user saying, “You do not have my permission.”

But, there is possibly more to this story.

Part of what drives this disconnect is how we perceive ease. Ease is a multi-dimensional concept. Brands such as Whirlpool must deliver against all three dimensions of Ease: Ease of Choice, Ease of Use and Ease of Mind. 

Whirlpool may do well on Ease of Choice and Ease of Use, but its failure with 24/ machines is 7 monitoring may be due to overlooking the power of Ease of Mind. 

Ease of Choice

Choice should be easy. We want more choice, and more personalization. But, we want choosing to be simple. Making a choice should be easy. It should require a minimum effort, and not take a lot of time. We do not want to spend a lot of time on a choice that should not take huge amount of energy to make.  In other words, we do not want increased mental and physical effort.

To understand the quandary of choice, stand in front of the snack food aisle at the supermarket. Unless you already know your favorite brand, size of package and variety, you will probably become overcome and dazed.  There are potato chips, corn tortilla chips in blue, red yellow or white corn, cheese snacks in puffs, twists, baked or fried, and pretzel sticks, nuggets, twists (tiny or large, cheese or peanut butter filled) along with the chickpea, soy, lentil, gluten-free and black bean chips. There is popcorn – kernels or already popped – in a variety of salts and flavors next to nuts, also in a multitude of flavors. 

Forget trying to make a quick confident choice in the pet food aisle. For cats and dogs, it used to be just wet or dry, bagged or canned. But, now you can purchase food in pouches, fresh food in the chill-case, food by age of pet, breed of pet, size of pet, health of pet, weight of pet, bad breath of pet, mental health of pet and combinations of these ingredients.  There are snacks for pets, fried, soft or filled.

As for appliances, washing machines have differing and multiple menus of cycles, fabric care, water temperatures, times or sensors. How does one choose what is best? We all wish to make the best purchase decision. Too many options can lead to making a satisfactory decision over making the best decision.

Ease of Use

We want to live in a user-manual-free world. Service options should not require a lot of explanation. Once we easily choose, use of the product or service should be easy. People have enough happening in their lives: they do not need to waste precious time and energy on learning how to use or navigate a product or service. It is the role of the provider to take the complexity out of choice as well as the use. Further, overly complicated products and services cause us to feel inept or inadequate, and, sometimes, cause us to feel stupid.

Something as simple as a washing machine can cause a user to feel unintelligent.  The rinse-soak-wash choices require too much thinking. There are multiple temperature options. The options for the wash cycle do not match my natural language.  In attempting to provide rinse-soak-wash options for all sorts of fabrics and levels of dirt, the washing machine beomes too complicated. The more complicated, the more stupid the user feels. Why am I having trouble with this? Yet, with fewer options, the user believes the machine is not doing a good job. The question became, “Is it better to have multiple options or a simple one-button machine?” 

Ease of Mind

It is not enough to be easy to choose and easy to use. People want to feel comfortable with their decision.  They want to feel reassured that they made the right choice. “Am I comfortable with the decision? Now that I am using this product or service, am I satisfied with the choice?” Am I doing the right thing for me? Am I doing the right thing for my family? Am I doing the right thing for my pet? Am I doing the right thing for the community? Am I doing the right thing for future generations? 

People want to feel right about their decisions rather than feel regret. And, people want to know that the brands and organizations with which they do business are doing the right thing. Are employees treated properly? Is the company a good global citizen? Is the brand or the company a decent contributor to my communities? Are the brand and corporate leaders making ethical decisions?

As for the connectedness of the appliance, people question whether the brand has their best interests in mind. Is the brand-business managing my information with care? Do I trust this brand as a data manager of my personal life? How are my data used? Do I approve of how my data are used? Does the brand use my data for my personal advantage or to theirs?

Not understanding and implementing against Ease of Mind is brand-business mismanagement. Research indicates that people believe brand-businesses will take advantage of the public if the brand-business believes is unlikely to be found out.

Whirlpool is not alone is its problems with consumers and connections to smart machines. LG faces a similar problem. As The Wall Street Journal points out, Whirlpool and others continue to seek “new lines of revenue” due to weakening demand. Users may not be comfortable with the brand’s revenue desires coming from perpetual peeping. Statements such as “We want to continue to leverage the technology in the product,” do not help users feel comfortable about the day-in-day-out monitoring of their behaviors.

Looking at this issue from the manufacturer’s perspective will only exacerbate the issue.  The manufacturers think this is all about educating users. Sure, users need to know the benefits of this behavior monitoring. But, manufacturers also need to do some soul-searching. 

Brands must understand the emotional and social ramifications that can violate the user’s ease of mind. Gaining permission depends on users feeling that the data collection is justifiable. Unless the user feels comfortable and implicitly trusts the brand, there will be no further “leveraging of the technology.” 

Success with the customer is not like a horse race. There is no prize for being second or third. Brands must win on all three dimensions of ease. when it comes to the three dimensions of ease, brands must win, place and show. Not marketing against all three dimensions of ease is perilous for brands.

stitch fix marketing branding

Stitch Fix Continues To Find Itself In A Serious Brand Fix

Stitch Fix, the online personal shopper clothing brand, has a problem. The brand is losing active customers, closing warehouses, laying off staff and is bringing back its founder as CEO to right the ship. Data indicate that since the height of pandemic shopping, Stitch Fix lost 95% of its value. The Wall Street Journal states that the huge decline in Stitch Fix’ valuation is due in large part to becoming a brand that is “everything to everyone.” In other words, Stitch Fix’ dilemma is due to serious mission creep.

In marketing, mission creep is the expansion of a brand beyond its original vision, promise or ambition. Mission creep is when a brand expands while losing focus on its core. 

Regardless of whether the brand is healthy or failing, it is essential that the main core business be protected and cultivated. Keep the heart of the brand alive and restore it to health. When the heart stops, the business dies.  With Stitch Fix, the main core business was an online, subscription, personal shopping service where anyone could have their own personal shopper to select and organize their wardrobe. A subscribed customer filled out a questionnaire, an algorithm kicked in. And, then, a human “stylist” curated a personalized box of clothing. Once delivered to the customer, the customer could keep (buy) all or some of the clothing or send back what is not wanted.

Somewhere post-PO and post-pandemic, Stitch Fix took its eye off of the brand’s core identity. Stitch Fix did not figure out how to make the core newly relevant and differentiated in a new era of shopping behaviors. Instead, the brand’s focus wandered away from the core.

Brand management is an ongoing process. Leaders must continuously focus energies on communicating, implementing, nurturing, developing, enhancing, and reinforcing the brand’s core purpose. Stand up for something special or you stand for nothing. Be the best at something relevant and differentiated. Never compromise quality in the name of efficiency or availability. 

Losing focus on the core happens more frequently than you might imagine. Thinking the grass is greener with different brands and/or different market segments is death-wish marketing.

For example, when McDonald’s business started to decline in the late 1990’s and early 2000’s, the brand expanded by buying a host of other restaurant brands: Donato’s Pizza, Boston Market, Pret A Manger and Chipotle. It was a “BOB” strategy – Believe in Other Brands. Additionally, the brand increased the number of restaurants by 50% over 10 years. At an analyst meeting in 1998, then chairman and CEO, Michael Quinlan’s plan for new stores was equivalent to opening a new store every four hours. 

Another, more current example is Meta. Meta is focusing more on the metaverse and less on Facebook. 

There is no doubt that Stitch Fix implemented a mission creep approach to profitability. When brand-business was losing steam, the CEO looked everywhere. In 2016, Stitch Fix expanded to men’s wear. In 2018, Stitch Fix expanded to children’s wear. In 2019, The brand expanded into the UK. And, in 2019, Stitch Fix created Stitch Fix Freestyle, an a la carte service now open to new customers. According to The Wall Street Journal’s “Heard On The Street” analysis, none of these expansions did anything positive for the bottom line.  When the brand wants to be for everyone, it becomes a brand for no one special.

But, not only has Stitch Fix lost its focus on its core, Stitch Fix continues to have a branding problem that is exacerbating its ability to manage. Stitch Fix must figure out how all of its offerings – men’s, children, Freestyle – relate to each other within the Stitch Fix brand portfolio while continuing to enhance and relevantly differentiate the Stitch Fix core brand promise. What is the Stitch Fix brand corporate brand architecture? 

Brand architecture is the brand identity approach used to define the relationship of each Stitch Fix brand offering to another in a portfolio. The Stitch Fix corporate brand expresses the authority (quality, leadership, trust, expertise) of Stitch Fix as a personalized online shopping experience. What are the relationships of each of these additional “brands” to one another and to the corporate promise?

This really matters. 

How you manage your brands is how you manage your business. Brand management is business management and vice versa. Brand architecture provides a framework for job descriptions and assignments, resource allocation, communications, market research, media, brand loyalty and brand power. Brand architecture helps customers sort out if a particular brand is for them. When there is more than one brand, customers want to know the benefits to expect from each brand. Customers do not care about the strategies; they just want to know about the expected experiences.

Brand architecture is significant because it dictates how resources are allocated. It also provides clarity of brand management. Brand architecture provides a strategic framework. 

Analysts are worried about Stitch Fix’ forward strategy. Is the plan to focus on Stitch Fix? What will be the relationship between Stitch Fix and Stitch Fix Freestyle, for example? What is the future of this pioneering brand? How do these other offerings relevantly differentiate Stitch Fix from other retail options, whether online or brick-and-mortar? Is the original Stitch Fix proposition still viable?

The Stitch Fix mission creep has rendered the brand more of a commodity than a relevant differentiated experience. Walking away from its core promise of providing anyone with a clothing stylist, curator and personal shopper left Stitch Fix at parity with any department store or clothing provider. Additionally, among the strategic plans that need to be articulated is this: Stitch Fix must adopt and manage its portfolio against a desired brand architecture. The brand must decide now what the offerings will be in the future and how these offerings will be managed. How you manage your brands is how you manage your business.


Spark by Hilton: Hotels Must Focus on Need-State Occasion-Driven Segments

Hilton just introduced a new hotel brand in its Elevated Essentials group of hospitality offerings. The Elevated Essentials category comprises Hilton Garden Inn, Hampton by Hilton, Tru by Hilton and the latest entry, Spark by Hilton. The overarching description of the Elevated Essentials group is “Signature amenities and services in all the places you want to be.” 

In describing Spark, Hilton’s Chief Brand Officer said, “In looking at the economy category, we saw a segment that has grown dramatically but lacks consistency, providing us an opportunity to deliver on the needs of this underserved segment of travelers. True to its name, Spark by Hilton signifies the start of something great – a moment of ignition as we add energy and momentum into the category and deliver the most reliable and friendly stays. This breakthrough premium economy brand will deliver the essentials done exceptionally well for every guest, every time along with friendly service – ensuring all travelers can enjoy a great hotel experience where they feel truly cared for.” 

There are a couple of take-aways from this statement that have consequences for brands.

First, segmenting by price. The hotel industry tends to segment by price. The underlying thought is that there are expensive hotels, less expensive hotels and inexpensive hotels.  Amenities and services are designed according to the price point. This is why the hotel industry market segments are usually labeled Luxury, Upper Upscale, Upscale, Upper Midscale, Midscale and Economy. And, now, Hilton has segmented Economy with a Premium Economy. 

Price segmentation is not customer-centric. Price segmentation makes things clear for the industry, but is of not help to a customer making a decision. Price segmentation is designed for the hotel owners not their guests. Customers do not say “I am looking for a premium economy hotel.” It is doubtful that a customer knows what Upper Upscale is relative to Upscale in terms of services and amenities. Customers want to know that the brand will satisfy their needs, solve their problems and be correct for their situation. No matter how the hotels spin the labels, price segmentation is generic marketing. Perpetually focusing on price is a pathway to commoditization. 

Second, price segmentation leads to the mistaken mismarketing idea that there is a value segment. Low price and best value are not the same thing. Focusing on low price reinforces this unfortunate idea that there are “value conscious” customers versus “non-value-conscious” customers. This is simply not true. Everyone is value conscious. Customers buying a Mercedes S-class believe the vehicle is a good value for them. Considering their situation, these drivers believe the vehicle is the best value to satisfy their needs. Likewise, the Kia customer think Kia is the best value to satisfy their needs. The customers shopping for an engagement ring at Zales think the value is excellent as do the customers shopping for an engagement ring at Tiffany’s.

Persistent focus on low price at the expense of great brand can quickly demean the brand. 

Third, relevant differentiation is more than features or attributes of a brand. A brand is a promise of a relevant, differentiated trustworthy experience. A brand experience consists of functional, emotional and social benefits. The brand experience also reflects the users’ values and their perceived, appealing brand personality. A brand’s features are the proof of the functions, benefits, customer values and brand personality. Focusing on features alone is death-wish marketing. Features can be copied. The brand experience cannot. 

Furthermore, in the hotel industry, a focus on features creates mystifying relevant differences among brands. The brands in the Elevated Essential group tend to just restate the same features.

Spark by Hilton

Spark by Hilton has this brand promise: “Practically inspired. Simply delightful. A budget-friendly stay offering the best of everything you need, done just the way you want.”

Spark by Hilton’s elements are: thoughtful simplicity, reliable service, unexpected touches and consistent quality.

Hilton Garden Inn 

Hilton Garden Inn: “Offering upscale accommodations and unexpected amenities to open up the brighter side of travel and out the best in you.”

“Our goal is to make your stay better and brighter. If something isn’t just the way you like it, simply let any hotel team member know, and we’ll make it right. Guaranteed.”

Hampton by Hilton 

Hampton by Hilton: “Always delivering an exceptional experience you deserve with thoughtful service, free hot breakfast and a warm, friendly smile. Every time.”

Every Hampton Inn and Hampton Inn & Suites is committed to the 100% Hampton Guarantee providing an exceptional guest experience and consistent, high-quality accommodations and amenities.”

Tru by Hilton 

Tru by Hilton: “With free pancake breakfast, a playful lobby packed with games and cozy nooks, and fun-sized rooms, you’ll get true comfort and more value.”

“At Tru, we’re rethinking hotel design to deal in trade-ups, not trade-offs. That means more space to spark creativity, more opportunities for connection and thoughtfully redesigned guest rooms that concentrate on comfort. Add in a must-see lobby and you’ve found your favorite cost-conscious hotel.”

Hilton believes that Spark by Hilton reimagines the economy category. And, maybe it will. But, the best way to reimagine the brands is to develop brand positionings that are meaningfully differentiated across a need-states occasion-driven landscape where everyone is viewed as value-conscious and price is a strategy.

electric vehicle brand loyalty

The EV Challenge: Brand Loyalty Is More Than Trial

Let’s discuss brand loyalty.

It used to be a principle of marketing that a brand needed trial and repeat before you had brand loyalty. In fact, at the haven of marketing, P&G, the concept was three tries before you could feel comfortable that a customer had become a loyal customer.

And, this makes sense. Brand loyalty is purchase behavior based on actual preference for the brand. Brand loyalty is behavioral and attitudinal commitment over time. Brand Loyalty is based on customer conviction that this one brand is the superior alternative for satisfying a particular want in a particular occasion.

More than just repeat behavior, brand loyalty is like a ladder. There are degrees of commitment to the brand. A marketer’s goal is to move a customer up the loyalty ladder from commodity consideration to short-list brands to preference and, ultimately, to true brand loyalty. It is rare, even with durable goods products, to have true brand loyalty or even preference after one trial. Of course, it is possible, but loyalty, which includes a trust factor, is earned over time. And, in new categories, such as electric vehicles (EVs), where there is learning and where there are many new options across many brands, trial can be expected.

However, somehow, this idea of building brand loyalty is being tragically tossed into the trash. This is a huge mistake. Not a good omen for brand owners.

This is why The Wall Street Journal story titled, “With New EVs Arriving, Brand Loyalty Goes Out The Window” is so unfortunate. The article’s premise is that drivers of EVs have been switching brands. It turns out that first time EV buyers who are now looking for a replacement are selecting from a different brand. 

So? This does not mean that brand loyalty is dead or “going out window.” It may mean that the driver was not “loyal” in the first place. It may be that when the first EV was purchased, the selection was limited so the driver opted for what was available. Or, as in the case of the Chevy Bolt, the model was recalled and sales halted due to battery fires.

The Wall Street Journal did point out in a subsequent story that there is a lot of “jockeying” happening among the auto brands. The hope is to attract those early EV adopters. Ford CEO Jim Farley said he hoped that this activity in EV would throw all brand preferences up into the air. Clearly, he is hoping that drivers move away from Tesla.

Data cited from Edmunds indicates that 80% of people who bought a Kia EV6 early this year have traded in that vehicle for another brand. Perhaps the Kia EV6 did not live up to expectations. Bloomberg’s Green Rating put the KiaEV6 below many other EV brands. To turn over a vehicle within a year means that the brand probably did not deliver on its promise or had “issues” with maintenance. Or that a competitive brand appears very attractive.

Other Edmunds data show that people who purchased a Ford Mustang Mach-E traded in a non-Ford vehicle. OK, so perhaps that driver really craved an electric Mustang. A Mustang is an iconic vehicle. The data cited do not indicate whether the trade-ins for EV Mustangs were electric or hybrid or gasoline powered. People wanted the Mach-E.

JD Power research among 2000 car shoppers revealed that “only 3 in 10 customers were able to find an EV that works for them in terms of price, vehicle type and other factors.” For example, General Motors introduced the pricey EV Hummer and the EV Cadillac Lyriq SUV. Neither did much for GM’s bottom line nor for its expertise in EVs. The EV Hummer sold 854 vehicles. The much-hyped Lyriq sold 122 vehicles.

One customer interviewed told The Wall Street Journal that he was a Chevy Volt plug-in hybrid owner who wanted to trade in his 10-year-old vehicle. He said that he had once owned a VW so he looked at the ID.4 from Volkswagen and he looked at the Kia EV6. He found it difficult to find either vehicle so he purchased a Hyundai Ioniq 5. He said, “I was definitely still partial to Volkswagen, but Hyundai won me over. I love it.” He also indicated that “if all things went well” he might consider buying a Hyundai for his next purchase.

Why is this brand loyalty going out the window? This is the opportunity to build brand loyalty. 

What The Wall Street Journal gets correct is that in this relatively new category with options beyond just Tesla, drivers are shopping around. Yes, drivers are learning the category. And, yes, drivers are trading in their current models which may not be the same brand as the new EV being purchased. After all, the data indicate that currently there are 53 EV models available now. That was not the case for the early adopters when Tesla, Volt and Leaf were the only vehicles. (By the way, there were 625 vehicle models sold overall in 2022.) And, EV sales were 6% of the market in 2022, up from 3% in 2021.

Other JD Power data show that on average only 50% of new car buyers buy from their current brand. The idea that a driver purchasing a brand of vehicle will buy that same brand next time is only true half the time.

The EV category is beginning. And we should expect a lot of “jockeying.” But, the automotive industry also has a problem regarding customers and loyalty: its persistent belief in the Allison-Fisher Funnel approach to a car purchase. The Allison-Fisher Funnel is an outdated marketing approach. With this model in minda potential car buyer is in a funnel moving through various stages from awareness to familiarity to opinion to consideration to make-model intention, shopping and purchase. The dealer wants to own the customer through the process and capture the sale at the end of the funnel. The dealer believes that once the driver is through the funnel, the driver is now a committed customer. But, just because a driver purchases a vehicle does not mean instant loyalty.

They call this Conquest marketing. 

Conquest marketing is about seizing, catching, capturing, vanquishing or triumphing over prospects that are shopping at rival dealers, convincing them to buy from your dealership. With conquest marketing, every sale is a singular event. With conquest marketing, every sale is an in-the-year-for-the-year sale. Brand loyalty is disregarded. 

In conquest marketing, a conquest sale is a term describing a sale to a particularly hotly contested customer, who does not have a specific reason for shopping at one store over another or for purchasing a particular item or service over another.

Another problem with the Allison-Fisher Funnel is that there is little or no place for brand and dealership loyalty. Every customer is a new customer to be won over. 

A primary goal of marketing is to create, reinforce and broaden the base of customers who are loyal to the brand and/or dealership. EV dealers and their manufacturer brands must change their perspective on brand loyalty. Winning new customers is important. But, building, maintaining and reinforcing brand loyalty are critical. And, the current marketplace, where shopping around and trying new vehicles, does not reflect the last days of automotive brand loyalty. This is the beginning of EV brand loyalty not the end.

Do’s and Don’ts for 2023

It has been a wild year for marketers. Based on events of 2022, here are some do’s and don’ts to keep in mind for 2023.


Do know the business in which you do business.

Please be specific. For example, you are not in the restaurant business; you are not in the fast food business; you are not in the casual dining business, you are not in the burger business. These are generic categories. These are not markets. A market is a specific group of people who have a specific need in a specific context. You are in the business of delivering an exceptional, relevant, differentiated, consistent eating experience time and time again. Brands are a promise of a relevant differentiated experience. CVS does not see itself as being in the drug store or pharmacy business. CVS sees itself as a provider of quality, affordable, convenient, wide-range health care services to help you feel your best.

Do create and deliver your brand-business’ Brand Promise. 

Having a Brand Promise means that you know the brand experience you intend to deliver. A Brand Promise summarizes the special contract that exists between a brand and its users. A Brand Promise describes what a brand is intended to stand for in the mind of a specific group of guests and/or prospects. By consistently living up to the Brand Promise, you ensure that your brand(s) will be relevant and distinctive. Peloton has a great brand-business promise but it seems as if this promise is only for Annual Reports. Build your brand-business around your Brand Promise and let your customers and prospective customers know.

Do be willing to abandon practices that do not yield the results you want.

Just because you have been successful doing something one way for years does not mean that it will continue to be a successful approach. If the holiday Southwest Airlines debacle has shown us, anything it is that with climate change generating ferocious, frequent weather events, a hub-and-spoke system may be more successful than point-to-point. Also, technology changes rapidly. Assuming that an outdated technology system can survive a crisis is brand-business mismanagement.

Do continue to build Brand Power.

Powerful brands make money The goal must be to become the identity that is most familiar, the highest quality and most trustworthy source of a relevant, differentiated promised experience. Example: Apple. Apple always tops the lists of most powerful brands. This brand power provides Apple with a pervasive perception of quality, leadership, innovation and trust. So much so that this year an automotive survey among 200,000 new vehicle owners with a list of 45 brands showed that 26% of these new vehicle owners would “definitely consider” purchasing an Apple vehicle in the future. Toyota came in first for “definitely consider” (at 38%) followed by Honda (at 32%). As of yet, Apple does not make cars.

Do focus on customer problems.

Please ask your customers what problems, worries, concerns they have with your product/service category, with your specific product/service offering. Asking customers what they want is not productive: you will receive generic answers. Asking people to complain and then finding a solution is the best way innovate and renovate. One of the biggest problems that Southwest Airlines customers complained about was the lack of communication. Of course, their flights were cancelled. But, Southwest’s lack of direct communication and inability to answer the phone was as serious as the flight disruptions and the lost luggage.

Do create and implement a Brand Architecture for your brand portfolio

Brand Architecture informs how the brands within your portfolio interact. Without an agreed Brand Architecture, brands compete with each other internally rather than compete with competitors externally. There are 5 types of Brand Architecture: Hallmark, Solo, Extended, Family and Combination branding. Remember that it is not necessary to use the same branding approach across the portfolio. Marriott uses the Family branding endorsement approach for many of its brands: Courtyard by Marriot. But Marriott treats its Ritz Carlton brand as a Solo brand.


Don’t reject your heritage.

Your brand-business was built on something important. Your provenance is critical. You can be contemporary and still leverage your past. Old can be new. Brands such as Chanel, Gucci, Louis Vuitton and Tag Heuer, for example, are considered adept at maximizing their genuine, authoritative heritage with an emphasis on the future. Car brand Jeep has four Willys models. The descriptor says, “Inspired by the original. Willys rakes inspiration from the very first Jeep Brand vehicles built by Willys Overland in the 1940s. Willys today combines heavy duty Trail Rated component upgrades with classic Jeep Brand styling.”

Don’t be generic.

Being generic, offering generic category benefits leads your brand-business to become a commodity with no relevant differentiators. When you stand for everything general, you stand for nothing special. Patagonia does not make outdoor clothing. Patagonia wants to be a brand-business that inspires and implements innovative solutions to our environmental crisis.

Don’t focus communications solely on price.

Selling the deal instead of selling the brand cheapens the brand. Rather than saying “Great price” say, “Great brand at a great price.” Peloton spent a lot of marketing dollars on deals and price advertising. The brand-business’ core values were never articulated. Once the leader in indoor fitness, after years of price-based marketing, Peloton is struggling to maintain relevance in its fast-changing market. 

Don’t rely on results to decide for you.

Data do not decide. People decide. Data do not speak. People speak. Use the data to understand and prioritize the decisions that need to be made. Please do not find yourself bogged down in the paralysis of analysis. When Dyson first came on the vacuum scene, competitors were convinced that fledgling Dyson would fail. Why? Data showed that noise was a problem and Dyson vacuums made a lot of noise. One global competitor even manufactured and sold a silent vacuum. The data were not correct. Noise was not the problem: it was the type of noise. Dyson’s noise helped people believe that the Dyson vacuum was powerful and had the strongest suction. The silent vacuum failed because no noise told consumers there was no suction.

Don’t behave inconsistently.

Customers want consistency. Inconsistent behavior erodes trustworthiness. Erratic behavior and changing values confuse customers. Familiarity does not generate contempt: it generates comfort. During the pandemic, familiar brands such as Campbell’s and Kraft saw vastly higher sales. Clearly, Twitter’s daily changes matter to users and advertisers.

Don’t be complacent.

Complacency stops ideas and innovations in their tracks. Complacency stops your brand from keeping up with its customers. Complacency lulls employees into inaction. Complacency crushes curiosity and creativity. When brands and their leaders become complacent, the brands suffer market share loss and under-performance. Complacency leads to brand irrelevance. Complacency stops brands and their leaders from looking outside at what other brands are doing and what are the threats. In 2016, Bloomberg Businessweek pointed out that complacency was at the heart of Levi Strauss’ struggles. The brand-business focused on churning out blue jeans missing the fact that yoga pants and leggings were alternatives for casual wear.

Who knows what this new year will bring for marketing. We cannot predict the future. But, we can prepare by futureproofing our brands. As strategies are generated and tactics defined, please keep this list of Do’s and Don’ts on hand as a guide for enduring, profitable growth.

dollar general market segmentation

Dollar General Chooses Market Segmentation

Market segmentation is fundamental to brand-business building. When creatively and intelligently managed, market segmentation can provide insight into:

  1. Superior understanding of the customer so the brand-business can provide outstanding competitive advantage;
  2. Strategic focus that is essential for effective marketing;
  3. Identifying market priorities that can drive brand-business strategies.

Dollar General applied market segmentation to generate its two-year-old pOpshelf brand-business.

Without altering its brand promise, Dollar General is leveraging market segmentation to expand its footprint with pOpshelf. Dollar General is not alienating its core customer base but has created pOpshelf for a new customer base. And, to prove the relevant differentiation of Dollar General and pOpshelf, in some Dollar General stores there are mini pOpshelf stores inside.

After the pandemic, Dollar General noticed a new market segment. But, this new market segment seemed to have different needs than Dollar Generals’ core shoppers. Dollar General understood this customer as an affluent bargain shopper who is inflation weary. The affluent bargain shopper is a suburban shopper with a couple of children and an income between $50,000 and $125,000.  

The affluent bargain shopper is more interested in general merchandise than food. This shopper wants buy basics at a good price (such cleaning products or toothpaste) but also wants to buy fun items as well. A pOpshelf store has that “treasure hunt” vibe that makes shopping interesting. (The treasure hunt experience should never be underestimated: it is also part of what makes TJ Maxx so popular.) Shopping at a pOpshelf store allows affluent bargain shoppers to treat themselves without a sense of guilt, according to Dollar General’s Chief Merchandising Officer. She added, “pOpshelf continues to positively resonate with customers through our fun shopping experience, on-trend merchandise and relevant price points.”

In a Goldman Sachs Retail conference in September 2022, Dollar General described pOpshelf’s shopper as follows, “… it’s a different customer. We’ve gone to school on that customer and made some changes accordingly, but it’s the same basic need of value and convenience for an underserved customer that other retailers can’t get to. So that makes us extremely excited. We serve a different customer and it’s a different occasion.”

Dollar General executives described pOpshelf this way, in its 3rd quarter 2022 Earnings Report, “pOpshelf aims to engage customers by offering a fun, affordable and differentiated treasure hunt experience delivered through continually refreshed merchandise, a differentiated in-store experience and exceptional value with the vast majority of our items priced at $5 or less.” 

According to CNBC, at a pOpshelf store, many of the items are ones that are available at higher-end markets such as Mrs. Meyers soaps and Amy’s frozen foods. The pOpshelf shelves are filled with a mix of holiday-themed party platters, home goods, crafts, toys, party supplies and seasonal décor with most items priced at $5 or less.

One industry observer wrote that while most of pOpshelf’s shelves are filled with “… decorative accessories and consumables, its home textiles assortment includes towels, kitchen textiles, decorative pillows and throws”. pOpshelf avoids utility items such as sheets. This allows pOpshelf to “make it all about fashion.”  All these items are own brand.

According to Dollar General, pOpshelf differs from a Dollar General in that a Dollar General is mainly anchored in small towns or rural areas. Dollar General customers tend to have household incomes of $40,000 or less. And around 20% of items are offered at $1 or less. Executives at Dollar General tell us that they constantly speak to their core customers. These core customers need the $1 price point to survive from paycheck to paycheck.

Because pOpshelf focuses on general merchandise over food and has a $5 or less price range, pOpshelf is not just a retail establishment for a different segment; it is a retail establishment that has higher sales and higher profits.

The purpose of market segmentation is identifying and understanding a brand’s customers. A brand-business may have different customers with different needs. Or, the same customers who have different needs due to different situations or contexts.

At its core, market segmentation is the idea that what people want is a function of who they are, why they need the product or service and how, when and where (context) they use the product or service. So, a market is particular people with a particular need in a particular context. The goal is to profitably satisfy customer needs.

Satisfying customer desires and understanding occasions in which these occur is the key differentiator between marketing and selling. Selling is convincing people to buy what we know how to make. Marketing is providing what we know customers want or what solves their problems. This is how brand-businesses leverage competitive advantage for success. This what Dollar General is doing. And, market segmentation is at the core of its growth.

beyond meat marketing branding

Beyond Meat: A Brand-Business Needs a Relevant Differentiated Brand Promise

In its latest earnings call, Beyond Meat articulated a three-step turnaround plan.

Observers, investors and analysts agree that Beyond Meat is a troubled brand-business in need of a turnaround. In yet another analysis of Beyond Meat on CNN, there was the familiar litany of issues. As CNN points out, Beyond Meat is facing a “waning” of interest in plant-based meat products. Part of this is due to price points and customers’ desires to fall back on less expensive alternatives. With prices high, people have been cutting back on dining out. This impacts Beyond Meat’s non-grocery channels. There have been some C-suite resignations. And, there has been a recent report on the hygiene of a processing facility in Pennsylvania. Adding to these woes is the fact that McDonald’s has not added the highly touted McPlant burger to its menu in the US, while Dunkin took its Beyond Sausage breakfast sandwich off its menu.

CEO, Ethan Brown reiterated most of these issues in the earnings call. Mr. Brown stated, “As consumers intensify (their) focus on making ends meet, health and environmental considerations take a back seat. This phenomenon makes it more difficult to broadly convey our core value proposition to the consumer.

“To summarize the current situation, we face an economy where blistering inflation pressure is shifting consumer behavior in the grocery store, category where competition has dramatically increased despite a broad and precipitous category slowdown and a consumer base whose focus understandably turned to fulfilling immediate basic needs of pursuing the broader benefits that represent our core value proposition.”

In a turnaround plan, the first step is to stop the bleeding. Mr. Brown stated Beyond Meat must “…significantly reduce operating expenses, while focusing on a more narrow (sic) set of strategic partner, retail, and food service opportunities and utilizing lean value streams across our beef, pork, and poultry platforms.”

Second, Beyond Meat will “… aggressively manage down inventory and rationalizing our production network..” This is due to “…more moderate volume assumptions to improve overhead absorption, address underutilization fees, and support margin improvement.”

And, third, Mr. Brown indicated that Beyond Meat would apply “…a laser focus to our sales and marketing activities, emphasizing those opportunities that we believe strike the right balance between restoring near-term growth and nurturing our most valuable long-term opportunities.” This means “restoring growth in retail and food service, through a series of targeted innovation, sales and marketing execution.”

All of these are important strategies. When a brand-business is in trouble, focusing on Financial Discipline, Operational Excellence and Leadership Marketing are critical for a turnaround. 

Financial Discipline is priority number one. Make money. Get back to profitability. Eliminate waste. Improve productivity. Every brand needs to earn the right to continue to grow. Financial Discipline is more than cost cutting. It is also a focus on building brand value. Cost cutting takes you only so far. Brand value contributes to quality revenue growth.

Operational Excellence means focusing on delighting customers so that an increasing percentage of customers look forward to purchasing more often. Operational Excellence involves creating an efficient and effective balance between meeting customer expectations and minimizing waste. When managed properly, Operational Excellence both decreases costs and improves customer satisfaction. And, this in turn helps generate quality revenue growth leading to brand value.

Leadership Marketing means focusing on building the relevant differentiation of the brand. Innovation and renovation are important. But, so is clarity of the brand’s Purpose and Promise, both internally and externally. Articulating the brand’s Purpose and Promise help to increase brand value.

Thus, here is what Mr. Brown’s turnaround plan lacks. There is no mention of the brand-business’ Brand Promise. Mr. Brown does suggest that there must be better communications of the health benefits of Beyond Meat. And, there must be a better connection between the brand-business and its role in sustainability. These are about the brand’s Purpose. But, there is nothing about the brand-business’ Brand Promise. And, the CEO of Impossible Foods is saying exactly the same thing. 

Beyond Meat has not created a relevant, differentiated brand promise. Without a relevant, differentiated brand promise, a brand tends to fall into commodity corner.

A Brand Promise summarizes in a brief statement the special contract that exists between a brand and its customers. A Brand Promise describes what the brand is intended to stand for in the mind of a specific group of customers or prospective customers. By consistently living up to and delivering the Brand Promise, a brand will be relevant and distinctive. A Brand Promise is something that a brand continuously strives to achieve. It is a future-focused description because it states what the brand will do for its customers. 

A Brand Promise has three components: the Brand Claim, the Brand Character and the Brand Support. The Brand Claim is the combination of functional benefits, emotional and social rewards: that is, “what does the brand do for me?;” “how do I feel when the brand does this well?” and “how are my social interactions and connectedness enhanced when the brand does this well?”  

The Brand Character reflects the values of the customer (that means, who is the person we wish to have as a loyal customer?) and the brand’s personality (if the brand were a person, what would be those traits most compelling to the target customer?). 

The Brand Support is the combination of relevant, differentiated features that are necessary to bring the Claim to life for those with the articulated Character. Identify the Brand Support only after the Brand Claim and Brand Character are identified.

The role of the Brand Promise is multidimensional. First and foremost, it defines the brand. Brand Promise defines the parameters for all development, communications, innovation and renovation on behalf of the brand. Brand Promise must be a motivating, relevant, differentiated description of the brand experience that you want the brand to deliver. Consistently living up to this Promise is the way customers perceive the brand’s performance quality. 

The Brand Promise is an internal force as well. All employees must know and understand the Brand Promise. They must be able to define it and deliver it, day after day, for every customer. Regardless of function, employees must know what they need to do to live up to the brand’s Promise to its customers.

Beyond Meat has had and still has many operational issues and retail challenges.

It is a mistake to believe the Brand Promise can fix everything. But, it is also a mistake to believe that Brand Promise is a mere marketing construct. Not only does Brand Promise define the total brand experience, it is a galvanizing force within the brand’s organization. 

A brand is a multidimensional, multilayered, multifaceted relevant differentiated idea. That idea is the Brand Promise. And, since a brand is a promise of a relevant, differentiated experience, the Brand Promise is key. This is especially true for new brands and for brands in intensely competitive market spaces.

Beyond Meat has never clearly differentiated in a relevant manner from its original competitor, Impossible Foods. That was a mistake. Now, that quality plant-based meat and chicken alternatives are taking up a lot of grocery refrigerated and frozen spaces, being known for something special is a make-or-break necessity.

Being first in a category does not matter if entries that follow are relevant and differentiated and high quality. Beyond Meat could have an amazing relevant differentiated Brand Promise. If the brand-business’s management team starts to focus on brand-business revitalization, let’s hope this time the focus is on the brand.

Macy's brand marketing

Macy’s: A Mall Within A Mall

Is the rejuvenation of retail going to be the idea of a mall within a mall? 

While some retail establishments bit the dust after years of overwhelming debt and pressures from coronavirus, some surviving stores are giving up the old “department” store approach for the idea of a store within a store. And, logically, as more retail establishments give their space to other retail concepts, the old department store is becoming more like the mall it anchors. 

Macy’s is leading the way.

Just this year, Macy’s decided to offer prime space in all of its stores to Toys R’ Us. According to the recent press, this brand within a brand has been successful. Macy’s states that the customers who visit Toys R’ Us are younger than Macy’s core customer base. And, these toy shoppers are cross-shopping by visiting other parts of Macy’s and buying. Now, Macy’s is offering space to Claire’s, a tween fashion-and-accessories store, in 21 of its stores. The hope is that even younger shoppers will frequent Macy’s to visit Claire’s.

The department store has been an American fixture since 1824 when Lord & Taylor opened its doors. Soon after in 1825, Arnold Constable opened. Marshall Field’s and Wannamaker’s followed. The department store offered a wide variety of goods in different areas of the store, hence departments. In 1858, Rowland Hussey Macy founded R.H. Macy & Co.

Macy’s first New York store grew by expanding its footprint into neighboring buildings to accommodate all of its departments. In 1902, Macy’s moved into its new building at Herald Square. Through all of its ups and downs, Macy’s proved it was a survivor. Macy’s outlasted its neighboring department store on Fifth Avenue and 34th Street, B. Altman’s. B. Altman’s, like Macy’s a high-end retailer, went bankrupt in 1990. Macy’s also outlasted Lord & Taylor, again a nearby Fifth Avenue & 38th Street establishment. (Lord & Taylor is now reincarnated as a digital-only department store.)

The difficulties in navigating the fast-paced changing retail environment have sapped the energy from many stores including Macy’s. Amazon’s digital super store changed shopping. Discount stores changed shopping. And, of course, coronavirus changed not just shopping but the supply and variety of items in the store. Many stores, such as Bed, Bath & Beyond, had either too little inventory or the wrong inventory or both.

Some of the current retail winners are stores that have figured out the successful marriage of brick-and-mortar and digital. Behemoths such as Walmart and Target have been able to offer the best of both brick-and-mortar and digital.

Macy’s, however, appears to be experimenting with a different approach to relevant differentiation of its brand. Rather than opening a new “department’ or a new channel, Macy’s is allowing existing retail brands to become those new departments: a store-within-a-store, turning Macy’s into a mini-mall.

The idea is not new. Sears tried this when it offered financial services through Dean Witter and real estate services through Coldwell Banker, brands that Sears owned. Unfortunately, these brands were not a good match with its core customer base. Furthermore, the focus on these peripheral brands took management attention away from the Sears brand, hastening Sears’ decline. (Interestingly, Sears created Allstate Insurance in 1931 and placed Allstate insurance agents in the stores. Allstate was spun off in 1993 and became completely independent of Sears in 1995.)

Macy’s approach is component branding. Component branding is when a brand is inserted into a host brand, in this case, Macy’s. The main benefits of the host brand do not change. However, the perceptions of the host brand are enhanced. The component brand – in Macy’s case, brands Toys R’ Us and Claire’s – is given the space to generate familiarity and sales within an established brand.

Basically, this is a modern version of the department store. But, unlike Sears, the brands within the Macy’s brand are not owned by Macy’s. These brands within the Macy’s brand are already well-established retail brand names. And, these are brands with loyal followings.

Macy’s appears to be doing something bigger than remaking the idea of a department store. Macy’s also appears to be remaking the idea of a mall. What if the mall were within the store instead of the store being inside the mall? It is an intriguing question. Malls have been facing hardships as anchor stores and smaller stores closed during the last recession and then recently during the coronavirus lock-downs. 

Imagine, people might stop saying, “Let’s go to the mall and shop the stores.” People may start saying, “Let’s go to Macy’s and shop the stores.” What if Macy’s became the draw rather than the mall? It used to be that way at Wannamaker. People would meet under the eagle in the main court area. What if Macy’s becomes the center of the retail experience rather than the mall itself? What if Macy’s itself becomes the hub for conversation, conviviality and connections? That would be a return to the ancient Greek concept of the agora. The agora was the heart and soul of the city.  It was the meeting place; the place where people gathered, listened, spoke and shopped. 

Whatever the case, Macy’s has a good idea. Making Macy’s a destination for shoppers looking not just for Macy’s items but for toys and accessories adds relevant differentiation to the Macy’s brand without changing Macy’s core brand. Relevant differentiation is the name of the game. Macy’s brand-business game plan seems to be a winner.

bed bath and beyond brand

This Should Not Have Happened: Bed, Bath & Beyond Entered Black Friday With Empty Shelves

In June of 2011, a retail sea change occurred. Storied brand, J.C. Penney, hired Ron Johnson, who led the success of Apple’s brick-and-mortar stores. Mr. Johnson decided that one of Penney’s problems was that the brand was damaged due to its consistent focus on deals and low prices. Without any Penney core customer insight, the pricing at Penney’s was changed. Using Apple as a model, the overhaul of Penney’s was something that turned off core customers. There were brand management lessons to be learned from the Ron Johnson tenure.

Fast forward to April of 2019. At another retail giant, Bed, Bath & Beyond hired Mark Tritton from Target. Mr. Tritton developed a turnaround plan for Bed, Bath & Beyond. Using Target as the model. Mr. Tritton’s alterations were not focused on core customers. So, the changes were startling for Bed, Bath & Beyond’s core base loyalists.

By February of 2022, it was clear that the strategies designed by the CEO of Bed, Bath & Beyond were not working. To complicate matters, Covid-19 had messed up supply chains and altered customer buying habits leaving stores like Bed, Bath & Beyond with limited merchandise or the wrong merchandise.

Now, we have just experienced Black Friday shopping day. Going into Black Friday, the business press indicated that of all the big box stores, Bed, Bath & Beyond was suffering from empty shelves. 

According to analytics firm DataWeave, and as reported in The Wall Street Journal, Bed Bath & Beyond continues to struggle with keeping its shelves stocked ahead of the holidays.  More than 40% of Bed Bath & Beyond’s inventory were unavailable in October 2022. This is nearly twice more than October 2021.

The report added that Bed Bath & Beyond had higher out-of-stock rates in October 2022 in comparable items than other retailers.

There is nothing more dismal and off-putting than empty shelves. If you need proof of that, step into one of the remaining Sears stores. Empty shelves are not just depressing but they are just dreadful for a brand’s customers’ perceptions and the brand’s value.

While many stores suffered from supply chain issues, at Bed, Bath & Beyond, these were severe due, in part, to the new Tritton strategies.

First, Mr. Tritton focused on limiting the number of price deals.  In 2021, Bed, Bath & Beyond decided to stop a lot of its print circulars that generated store traffic. Similar to the switch to everyday low prices instituted at J. C Penney during the tumultuous tenure of ex-Apple store maven, Ron Johnson, Bed, Bath & Beyond stopped coupon-generated and flyer-generated deals. The idea was to become less dependent on dollars-off shopping.  Mr. Tritton also wanted price parity with its competitors. 

Retracting circulars was a minor disaster. As with Penney, knowing the customer base could have avoided this kind of crisis. Bed, Bath & Beyond customers did not see the deals as brand degradation. They saw the deals as part and parcel of the brand. The deals were things they loved about the brand. 

Print circulars and mailers were mainstays of the brand for decades. Customers missed the circulars; store traffic dropped. When Mr. Tritton’s team finally recognized that circulars needed to be reinstated, Covid-19 paper supply issues along with labor constraints meant the brand could not print the circulars fast enough.

Second, Mr. Tritton, following the Target playbook, began a program creating own brands

Although an initial expense, private label brands are money-makers if handled properly. The Wall Street Journal has pointed out that private label brands, “… are no longer the cheap knock-offs you keep hidden in the back of the cupboard, but quite possibly the tastiest deals on the shelf.” Referring to Whole Foods’ reincarnation of the 365 brand and Target’s innovative private label creations, The Wall Street Journal stated private label brands are “… casting off their bland reputation and transforming themselves from dull to desirable.”

Mr. Tritton’s Target experience was that own brands are an essential, profitable revenue source. Adding more private label brands became a priority for the Bed, Bath & Beyond brand. In addition, Bed, Bath & Beyond created a partnership with Kroger Co. whereby Kroger will sell some of the Bed, Bath & Beyond private label offerings.

Mr. Tritton indicated that the own brand portfolios would consist of products in home décor, laundry, bathroom and kitchen, according to a Bloomberg BusinessWeek report. 

Own brands require manufacturing and supply. Manufacturing and supply were hard hit by coronavirus. It became nearly impossible to have these private label brands on the shelves. At the same time, the national brands were gone.

Third, Mr. Tritton focused on updating Bed, Bath & Beyond’s technology.

New technologies are always a winning issue as these technologies can make life easier for shoppers. 

At the time, reported that Bed, Bath & Beyond’s technology upgrade program was designed to “… support improvements in merchandising and inventory management, product lifecycle management, retail space planning and optimization, the launch of additional private-label brands and real-time tracking of merchandise fulfillment with the supply chain.” The technology changes were also designed to make shopping easier for customers.

One of the lessons of Covid-19’s supply chain problems is that real-time inventory practices create empty shelves and deficits in other critical items necessary for manufacturing. In an earnings call at the time, Bed, Bath & Beyond admitted that its poor quarterly performance was due to a “… compromised customer experience” when customers could not find what they wanted on its shelves. As Mr. Tritton said, there was demand but limited availability.

Bed, Bath & Beyond stated that the supply chain issues cost the brand $100 million at the November 2021 end of quarter. The December 2021 results were equally bad. Upgraded technology focused on pandemic-fueled customer needs such as e-commerce, curbside services, in-store pick-up and same-day shipping. Of course, if there is limited product availability, these services become moot.

Finally, Mr. Tritton made a classic marketing mistake by not focusing on the core customer base. 

Keeping core customers happy and loyal is essential at all times, and, most especially, during troubled times. The changes that were instituted were not based on core customers’ problems and needs. These changes were made based on Target customers. 

Further, the changes at Bed, Bath & Beyond did not match the changing behaviors of core shoppers.

One of bright spots in post-coronavirus marketing has been the Penney ads with core customers saying what they love about the brand.

Hopefully, this iconic retailer will have made it through the holidays with its brand intact. The problems at Bed, Bath & Beyond were self-inflicted. With Bed, Bath & Beyond’s Board of Directors recognizing the missteps, Mr. Tritton is now gone from Bed, Bath & Beyond. Of course, the supply chain was a disaster for many retailers, but from a brand standpoint, the brand mismanagement at Bed Bath & Beyond was extremely damaging. Brands can live forever, but only if properly managed.