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.

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.

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.

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 34^th 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 & 38^th 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.