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Gap And The Contradictory Leadership Challenge

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Brands face the challenges of optimizing contradictory customer needs. This is because customer do not want to compromise one benefit for another. Leaders face the same challenges. Leaders must figure out ways to maximize seemingly uncompromising views such as focusing on profitability and sustainability. Or focusing on core customers’ views while satisfying other customers’ views.

Another seemingly difficult leadership challenge is being data-driven rather than creative-driven and vice versa. This is the problem that has faced many retailers. Fashion needs data. On the other hand, fashion decisions, are in many cases, creative, gut-driven decisions. And, data-driven versus creative-driven is apparently seen as a challenge that plagues Gap, the once popular, de rigueur clothing establishment.

A creation from 1969, Gap was a store stocked with Levi’s denims. It promised to never be out of stock. The clothing was available in all styles and sizes. An instant hit with the baby boom cohort (the Gap name came from the concept of the generation gap), soon there were stores nationwide. It was not until the 1980’s that a new CEO focused on raising the style level. Gap was great until it was not great. 

In its latest analyst earnings call, Gap signaled a less than encouraging forecast. Reporting indicates that Gap dragged down the overall company (Banana Republic, Athletica, Old Navy and Gap).

One of the problems with brand management and marketing is the mystique of measurement. As business has become more demanding, business has become more defensive. In a world where marketing activities and budgets are being squeezed by limited resources, there is a tendency to over-rely on metrics.  Sometimes, leaders allow the mystical muscle of measurement to take over the role of marketing expertise and experience. Creativity is forced to conform to measures. While there is much that we can measure, there is also much that is not measurable. If the value of marketing and creativity need validation within the organization, then the organization has a bigger problem than can be solved through measurement. 

It is necessary to recognize that data show us what has happened. Data are backward looking. And, in most cases, data do not tell us why customer behavior is what it is, only what it is now and what it was then. 

At Gap, there were CEO’s who leaned towards fixing Gap’s issues by drilling down on what data were showing. Until recently, with the hiring of a creative-style-focused leader, Gap has cycled through executives who, according to The Wall Street Journal, fixed “weak spots here and there but (these) were not the fundamental problem.” Gap’s new CEO is “the first creative-minded leader” in quite a while.

These Gap fixes were important. But, when the enterprise is clothing, creativity is important too. It is possible to maximize creativity and data. All that a brand needs is a leader who is insight-focused acting on informed judgment.

Leadership, regardless of industry, must not allow process to dictate over passion.  Leadership must not sacrifice accountability on the altar of measurement. Leadership must not fear failure. When decisions fail, it is very easy to say, “It is not my fault. The measurement process made me do it.” 

Disciplined research is an important contributor to effective business management. But, research discipline alone cannot be creative; it cannot be innovative. Measurement can evaluate but not create ideas. Creative ideas require creative insight. People provide these insights based on data and judgment.

Real, actionable insight will not come from superior data analysis. Superior analysis provides understanding of where we are and how we got to where we are. Superior analysis does not provide insight into what kind of future we can create. 

Leadership must use their expertise and their judgment. Leadership must use their creativity to make reasoned, informed, and insightful decisions. 

In this increasingly competitive, sometimes frustrating brand-business world, there is a pervasive fear of taking the leap of faith based on informed judgment. Informed judgment is not guesswork. Of course, no one intentionally commits valuable resources to something that is likely to fail.

Informed judgment is critical. The emphasis is on “informed.” Personal judgment can become a hindrance to success. 

In 2011, Ron Johnson, the former star of Apple’s retail stores, took on the CEO role at J.C. Penney. Mr. Johnson had some ideas as to the direction of J.C. Penney. According to the press, most of these ideas went untested. These ideas were not particularly “informed.” The result was a retail debacle.

On the other hand, informed creativity is a formula for success. The Wall Street Journal cites the case of Abercrombie & Fitch. A new CEO made a huge difference using informed creativity. It was clear that Abercrombie & Fitch’s “cool-kids” approach lost its luster. The brand-business’ revitalization changed the target audience and the over-reliance on logos, “to cater to working-age adults who might be searching for tasteful wedding guest outfits.”  This type of rejuvenation relies on creative interpretation of data.

Part of the problem comes from the muddled definitions of information, trends and insights Not only do we tend to use these terms interchangeably but also, we overuse and misuse the word “insight.” 

This matters because there is a relationship between information and trends, and trends and insights. Information happens first. Information leads to the generation of trends, which then lead to the creation of insights. It is a process that sets the context for creativity. 

Information are facts. And, in our data processing world, information are data that are processed, stored and/or communicated. There are massive amounts of data being processed into massive amounts of information. 

A trend is something that is developing or changing. A trend is enduring. A trend is an idea or concept that is happening around us and influencing the way and manner in which we behave.

Trends have implications, of course. And we can generate strategies to address these trends. 

But, trends are not insights.  Trends are valuable because they inform us about the world around us.  But, collecting and analyzing information and turning these into trends are not enough. We must go from information to insight.  

Informed insight is not guesswork. Insight means seeing below the surface of information.  Insight is all about “why?” This necessitates synthesizing rather than only analyzing.  Analysis travels backward. But brand-businesses move forward. Use synthesis. Synthesis means, “the combining of diverse concepts into a new coherent whole.” Analysis leads to understanding what is happening and why.  Synthesis leads to insight into what might happen. 

Trends are general. It is the insight about the trends that is critical.  It means looking under the surface, beyond appearances and seeing ahead. Meaningful insights are more than mere information and trends. 

A consumer insight is not what you always believed. A consumer insight is not driven by what the factory makes. A consumer insight is not just information or facts. A consumer insight is not product attributes. 

An insight needs to meet two criteria: 1) Surprise at what you learned; and, 2) As a result, a change in behavior based on this learning. An insight is a fundamental consumer truth that has the power to open our eyes. It is relevant, recognizable, believable, ownable, adaptable to geographies and capable of building business for the long-term.

Right now, Gap could use some creativity-driven informed insight. The Wall Street Journal indicates that many on Wall Street are pleased with the choice of a creative leader for Gap. As newly appointed CEO, Mr. Richard Dickson stated that it is time to redefine the Gap’s image for consumers. Mr. Dickson also admitted that many problems were self-inflicted. One way to rejuvenate Gap will be to recognize the limits of data-driven only strategies. Data will be key but as a way to inform judgment, allow executives to take that informed leap of faith, and help evaluate ideas. 

Tupperware: Trapped in Tendencies for Trouble

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We may soon have a world without Tupperware. Recently, there have been numerous doom-laden reports on the sad situation for this iconic American brand-business. In fact, a brief Nexis search of Tupperware-demise articles for the past week alone turned up 13 pages of commentary. 

Pundits and analysts identified the many reasons for Tupperware’s dire straits. There is the lack of innovation. There is the lack of focus on the changing roles of women. There are the two-year Covid-19 restrictions on gatherings. There are the supply chain issues created by Covid-19. There are the price increases on materials. And, so forth.

Tupperware has yet to die. But, what is clear is that the brand-business fell victim to several brand-business tendencies for trouble. Not every brand-business enmeshed in troubling landscapes dies. Brands such as Lego, Campbell’s, McDonald’s have all been in trouble and managed to claw their way back to incredible success. Even Toy R’ Us is actively seeking rejuvenation with its stores inside of all Macy’s stores. Unfortunately, others such as Blackberry, Nokia, Sears, Avon, Kodak and Bed, Bath & Beyond have left the scene, are leaving the scene or are shadows of their former selves. Sometimes brand-business decline is a fast, free fall. Sometimes it takes decades. Some observers indicate that Tupperware’s current troubles were years in the making.

Tendencies for trouble are the result of brand mismanagement. Tendencies for trouble must be considered as “stop-now” behaviors and attitudes. When it comes to brand-business revitalization, brand-business teams need to eliminate these “stop-nows” as these are impediments to invigoration. 

Tendencies for trouble have financial consequences. Anything that stops a brand-business from growing customer-perceived brand value has financial consequences. Customer-perceived brand value depends on renovation, innovation and relevant differentiation. Without customer-perceived brand value, there is no shareholder value.

Tupperware is a poster child for several corporate tendencies for trouble. The jury is out as to whether Tupperware will find a pathway back to success. However, in order to do so, Tupperware will need to reverse its engagement with the behaviors and attitudes that have forced the brand-business into its downward spiral.

First, Tupperware became complacent. Complacency is comfortable but it is a hindrance to success.

For brand-businesses, complacency must be avoided. Complacency stops ideas and innovation. Complacency allows brand-businesses to stop focusing on changing customer needs. Complacency permits employees to keep on doing what they are most comfortable doing, lulling people into laziness and inaction. Complacency crushes curiosity and creativity. 

Complacency gives brand-businesses permission to stop looking at the changes in the world and in its specific market segment. Specifically, complacency takes eyes off new entries in your category and in identified segments. Complacency blinds a brand-business to the forces of the changing world. It creates a “staying alive” mentality rather than a “moving forward” mentality. Complacency supports the static mind-set that keeps the brand away from risk. As the Frederic Forrest character Chef says in Apocalypse Now, “Never get off the boat.” 

Complacency is simply brand-business mismanagement. Brands are not passive; they are promises. Brands are active promises of an expected, relevant, differentiated experience. Brands can be soft, quiet, traditional, laid back, and chill. But, they have to move if they want to deliver a relevantly differentiated experience. Complacency is anti-movement creating inaction and, eventually, irrelevancy. 

The more powerful and successful the brand, the easier it is to walk off the complacency cliff. Complacency leads brand-businesses to believe that there is now nothing left to do but live off past success. 

Brand-businesses that fall into complacency due to their belief in their historical power lose because other brands in the competitive set are innovating all the time. Complacent brand-businesses are so enamored with their success that they stop looking outside at new entries and new threats.

Complacency is a culture flaw. Brands need leaders who fight complacency. Complacency is satisfying. But, from a brand-business perspective, it generates inaction supporting the trajectory of continuing to do what has worked in the past instead of what will work in the future. 

Second, Tupperware fell for the belief that what worked yesterday will continue to work today and tomorrow.

Customers change; the world changes; brand reputations change; competition changes. Doing what once worked when the current landscape is different makes no sense. Standing still while changes rage around you is a formula for failure. 

Peter Drucker, the marketing guru, recognized the pitfalls into which so many great brand-businesses fall when it comes to doing the same thing over and over again. His lessons include these: 

  • Environments change. Continuing strategies and actions that created past successes will eventually lead to failure. 
  • Being defensive and unyielding will also lead to failure. Brand-businesses must be willing to (quickly) abandon formerly successful approaches. 
  • Believe that change will happen and that sometimes the change will be revolutionary. Brand-businesses should create the future by making changes even though it means “obsolescing the products or methods of its current and past success.” 

Leadership is critical. Brand-businesses need leaders who are able to change their minds and switch direction when necessary. Leadership must be able to ditch a no-longer-viable strategy. At some point, leadership must be able to say that it knows as much as it can know and is capable of making an informed judgment call, even if it seems to be a leap of faith. 

Markets and customers change quickly. Brand-businesses must be flexible, agile and quickly decisive. This is why it is important to have leadership that is willing to look outward rather than backward. Just think of all the brand-businesses that had to quickly rethink and implement new strategies when Covid-19 restrictions changed people’s lives.

Building a culture that is not afraid of letting go is critical. This does not mean giving up the brand-business’ core values. It does mean being ready to take leadership in a fast-moving, changing world. Staying out of trouble hinges on how willing the brand-business’ leadership is to recognize when it is time to move on and jettison a strategy that is holding the brand back. 

Third, Tupperware disregarded the changing world.

 Not paying attention to core customers and their changing wants and problems means the brand-business is not up to speed. Disregarding the changing world means not understanding and attracting prospective, like-minded potential new customers. Disregarding the changing world means not renovating or innovating a brand-business. This means not thinking about the present or thinking about the possibilities for tomorrow. Disregarding the changing world means the brand-business is looking backward, trying to reproduce the past. The brand-business is not evolving with the changing times.

Tupperware missed adapting its in-home party model when women quit staying home and went to work in an office. Tupperware turned a blind-eye to the behaviors and attitudes of new younger cohorts. Tupperware did not pay attention to people’s lack of free time.  Tupperware missed competitive entries.

Covid-19 was just a fraction of Tupperware’s problems. Tupperware’s problems started a while ago. Like Avon, Tupperware suffered from lack of recognition that women were no longer at home all day. Additionally, Tupperware did not recognize that younger cohorts were less interested in plastic than previous generations. These younger cohorts were interested is more eco-friendly products and services. SodaStream built its business on consumers’ dislike of buying so many bottles of sparkling water. Recently trending is the idea of reusable containers for take-out foods and restaurants.

Tupperware missed the decline of leisure time. Having or attending a Tupperware party carves out precious time from individuals’ time banks. Tupperware parties may be a luxury in a world of time-deficient people. Tupperware time might be the only time a family has for being together. This is a trade-off that most people will not make.

And, then there is the competition. Tupperware missed plastic food-container products from grocery stalwarts in the plastic bag business such as Glad and Hefty. Tupperware missed competitive food container products from take-out deliverers and restaurants. Tupperware overlooked the food containers from delicatessens. 

Lots of brand-business observers believe that there is a natural brand-business life cycle from birth, to growth, to maturation, to decline, to death. This is wrong. Brand-businesses do not inevitably die. They can live forever. Brand-businesses get into trouble due to self-inflicted actions of brand-business owners and leaders. Brand-businesses die from brand-business mismanagement.  Tupperware neglected staying relevantly differentiated. Having the lid make a ”burp” sound when closing is just not enough in today’s world.

And, then, there is the name. Some analysts are saying that Tupperware allowed its name to become generic for the category. It is true that Tupperware has become the category definer. However, other brand-businesses have managed to maintain the integrity of their brand-business while becoming a catch-all name. Kleenex and Scotch Tape, for example, have well-defined, relevant, differentiated positions in customers’ minds.

Bloomberg BusinessWeek ran an article indicating that a transformation at Tupperware will take another Brownie Wise, the woman who inaugurated and ran the hostess parties. Maybe this will work. 

Tupperware has the opportunity to revitalize its brand-business. It will be a challenge. But, it can be achieved. However, in order to do so, the Tupperware brand-business will need to extricate itself from the trap of the tendencies for trouble.

Hermès-NFT Trademark Suit Branding

The Hermès-NFT Trademark Suit Did Not Change Brand Legality

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There is no legal definition of a brand. This is a marketing sin.

Maybe you think the issue of brand legality is not relevant for your marketing efforts. Or, maybe you think that new legal cases testing the limits of trademark law in a techno-digital world are for Intellectual property lawyers, theorists or academicians.

The digital world is challenging the limits of established law. Brand owners should start considering how to protect their brands in this emerging universe.

About a week ago, there was a groundswell of interest in brand, trademark and the possibility that new legal statutes might come into play. Perhaps, even a legal definition of a brand. And, things could have changed. There was a possibility that the Hermès-NFT trademark case could be a catalyst for the legal system to finally generate a legal definition of a brand. The case was a win for established trademark law. Nothing wrong with this. Trademarks must be protected.

But, nothing groundbreaking on the brand front. More than ever, with the power of digital and the pull of the metaverse, brands should not continue to be unprotected.

There are several other trademark lawsuits regarding the creation of NFTs that use well-known brands as part of their art. But, with the ruling in the Hermès-NFT trademark case, the glimmer of hope of a legal definition for a brand will probably turn into a ghost.

One of these unsettled cases is from Nike, a powerhouse brand. Nike filed a trademark infringement lawsuit against StockX. Nike’s complaint states that StockX sold almost 500 Nike brand athletic shoe NFTs. And, these NFTs were sold at exorbitant prices with “murky terms of purchase and ownership.” 

Another test will be the suit brought by Jack Daniels against VIP Products. In this trial, the issue is not a digital one. Rather it focuses on a squeaky dog toy that too closely resembles a bottle of Jack Daniels Bourbon.

Film director, Quentin Tarantino, settled a lawsuit with Miramax last September. The case dealt with the auction of “uncut screenplay scenes” from Pulp Fiction (Tarantino’s 1994 film) as NFTs. Mr. Tarantino along with partner Secret Network, wanted to sell NFTs of Mr. Tarantino’s original Pulp Fiction handwritten script. Miramax, which owns the rights to the film, claimed Mr. Tarantino violated copyright law.

But, the blockbuster lawsuit was the recent Hermès versus Mason Rothschild face-off. Mr. Rothschild is an artist. He created digital images of 100 “MetaBirkins” as NFTs. These NFTs are imaginary fur-covered handbags à la the iconic Hermès Birkin handbag. As an artist, Mr. Rothschild’s position is one of artistic expression which is protected by the First Amendment. His lawyers describe the MetaBirkins as two-dimensional works, which are, by virtue of being a “picture,” not three-dimensional handbags for use in the metaverse or in real life. Yet, a buyer could hang one of these MetaBirkin NFTs on a wall in a digital space. 

Observers, IP lawyers, artists and others connected to NFTs watched this case very carefully. This is because the relevance and power of trademark law is based on “real world” situations. The digital world is different. The question was and still is: how does trademark law work in the metaverse? 

But, importantly, there is another issues that no one mentions. The metaverse is an experiential universe. In an experiential universe, experiences matter. Brands are promises of relevant differentiated experiences. A brand experience is unprotected in law. Anyone can attempt to copy that experience as long as someone’s trademark is not used.

It is necessary at this point to state five critical ideas.

First, here is the definition of a trademark. A trademark is any word, name, symbol, or design, or any combination thereof, used in commerce to identify and distinguish the goods of one manufacturer or seller from those of another and to indicate the source of the goods. 

A trademark identifies the source of a product or service.

In the Hermès-NFT case, Hermès is the source of the Birkin Bag. People might think the Rothschild MetaBirkin bag comes from Hermès. And, therefore, the perception might be that the MetaBirkin Bag has the authenticity and provenance of Hermès.

Second, there is no legal definition of a brand, so here is one: a brand is any distinctive identity distinguishes a specific PROMISE associated with a specific product or service, differentiating that product or service from others in the marketplace. A brand defines a relevant, differentiated experience. 

The concept of brand is not in the law books. The legal cases in which brands play a role are all about trademark infringement and trademark dilution. Hermès is proceeding with trademark infringement in court.

Third, you trademark products.  You brand promises. You brand the promise associated with the product. This means that the promised experience is not protected because a brand is not a legal entity. Keep in mind that a lot of what a Hermès’ Birkin Bag delivers is experiential. Right now, the Hermès’ Birkin Bag experience is not able to be legally protected. Only the trademark can be protected.

Fourth, trademark dilution is not brand dilution.  Trademark infringement is not brand infringement. With trademark dilution and trademark infringement, the source is protected; the experience is not. Trademark dilution is the perceived lessening of the trademark’s uniqueness. Trademark dilution means that there has been unauthorized use of a famous trademark by a third party. 

Fifth, Trademark dilution differs from trademark infringement in that the trademark owner does not need to prove a likelihood of confusion to protect the trademark. Instead, all that is required is that use of a “famous” mark by a third party causes the dilution of the “distinctive quality” of the mark.

With trademark infringement, the trademark owner must show that it has a valid and legally protectable trademark; that it owns that trademark; and that the offender’s use of the trademark likely caused confusion. 

In the Hermès case, Mr. Rothschild created and sold NFTs displaying images of Hermès’ iconic Birkin bag. Hermès successfully argued that Mr. Rothschild’s MetaBirkin NFTs are a case of trademark infringement in that customers could be confused as to the source of the MetaBirkin. Mr. Rothschild believes that people willing to spend five figures for a satchel would not be confused by his artwork.

Hermès believes, as did the jury, that Mr. Rothschild’s NFTs “… may have caused clients to believe that the premium brand (Hermès) is affiliated with his artwork.”

The jury determined that NFTs are less artwork and more consumer product. Therefore, as consumer product, the NFTs are subject to copyright law protection from copycats. The jury also decided that there was consumer confusion, as Mr. Rothschild’s website URL was too similar to the Hermès website. Hermès did provide market research indicating there had been some confusion. Mr. Rothschild’s legal team stated that the data were sketchy and the confusion was “minor.”

Intellectual Property lawyers and creators eagerly followed this case. Going in, many believed that there could be some rulings that might better direct how trademarks, art and trademark law will operate in the digital world.  Pre-verdict, one law professor indicated that there is a strong possibility that for “game-changing” rulings. Another lawyer indicated that digital assets are “revolutionary” requiring new “legal options” with the acceptance of “NFT owners as copyright owners.” Yet another IP lawyer wrote that the Hermès-MetaBirkins case will be a “momentous turning point for Web3 and digital products.”

As it turned out, established intellectual property law won out. Or as one of Mr. Rothschild’s lawyers stated, it was “… a great day for big brands and a terrible day for artists and the First Amendment.” 

All of this legal wrangling is good for trademark protection. But, what about brand protection? Hermès may have won over Mr. Rothschild for trademark infringement. But, its total brand experience still remains unprotected. And, in the metaverse, experience is everything. So, Hermès and the other brands that are cracking down on use of their logos in digital contexts will still own brands that are at risk. Creators may find that although the trademark cannot be used, the brand experience can be digitally replicated without infringing on a trademark. 

Brands must be able to legally own and protect the value they create. This Hermès case demonstrates that now is the time to create and institute a legal definition of a brand.

The End of An Era: The Dodge Challenger And Dodge Charger Are Now Muscled Out

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In July 1965, Bob Dylan went electric at the Newport Folk Festival, abandoning the acoustic guitar for the rock genre that was sweeping through the counterculture. It was a defining moment for music and for a changing society.

The segue to electric vehicles has been at a slower pace; more of an evolution than a revolution. Up until now, drivers have had the option for electric vehicles. Since 2006, there was Tesla. General Motors (2016 Bolt) and Nissan (2010 Leaf) were available. These days, eyeing Tesla with envy, all of the other domestic and international automotive manufacturers have jumped on board with laser-like focus on being the first choice electric vehicle. But, the transition for drivers will not be overnight.

As far as electric vehicles go, there has not been that instant recognition moment that the world has changed… until now. Sadly, or not, the checkered flag has come down on brands that epitomized the gas-guzzling, hyper-powered American automotive dream.

This week was the end of the brand promise of the American-made pursuit of horsepower and performance. This week was the end of powerful gas-powered performance-oriented muscle cars that express the drag-racing, car chasing quarter-mile crushing spirit of the street.

This week was the end of The Dodge Challenger and The Dodge Charger. Good-bye, Dukes of Hazzard (1969 Dodge Charger). Adios, Fast and Furious (1969 Dodge Charger). Never again, Vanishing Point (1970 Dodge Challenger R/T 440 Magnum). Car chases will never be the same.

Car enthusiasts received the news that those American-made, 2-door sports coupes with V-8 engines designed for high performance driving, rear wheel drive, street performing vehicles were giving up life for the electric car. Muscle cars are now officially muscled out.

Stellantis, owner of Dodge, announced that the Dodge Challenger and the Dodge Charger will be excised from the Dodge line-up. Both the Charger and Challenger will be discontinued at the end of 2023. According to The Wall Street Journal, Dodge is hoping that its loyal muscle car buyers “will embrace a new kind of muscle: one that runs exclusively on battery power.”

This new “muscle car” will be an all-electric concept vehicle designed to embrace the memory of the gas-powered Dodge Challenger and Dodge Charger.  The new EV is expected to go on sale in 2024. It will be the Dodge’s first fully electric model.

Dodge hopes that calling the EV concept car the Charger Daytona SRT, “after the vehicle that first broke 200 miles an hour on a NASCAR track in 1970,” will lessen the pain of the loss. To make the transition even more natural, Dodge also created a synthetic “exhaust tone” designed to reproduce the “thunderous roar of its gas-engine muscle cars.” 

It will be interesting to observe whether a synthetic exhaust tone will jump-start sales. The Dodge Charger and the Dodge Challenger are beyond iconic brands in the lore of American automotive. 

The Dodge Charger’s first year was 1966. The car was an attempt to manufacture an upscale, upsized, affordable, highly-styled rear-wheel pony vehicle. A pony car defined a vehicle model that was performance-oriented, compact but with a long hood, either a coupe or a convertible at a reasonable price point.

The Dodge Challenger’s first year was 1970. It is considered to be Dodge’s late response to Ford’s Mustang. The long-gone, but gorgeous Pontiac Firebird and the Mercury Cougar were also in the competitive set.

Muscle cars were hot. But, during the 1970’s, their sales declined as new amendments on emissions from the Clean Air Act had an impact; there was a fuel crisis and insurance costs rose.

However, car enthusiasts kept the flame alive. The Dodge Charger and the Dodge Challenger were vehicles originally manufactured by Chrysler, a brand that underwent a series of mergers and de-mergers, finally winding up in the arms of Italian automotive maker Fiat. 

However, Stellantis will give us one more year to manage our angst. Stellantis tells us that the Charger’s and Challenger’s last model year will be a throwback. The goal is to keep the brands alive in the minds’ of its loyalists so that these buyers will make the segue to the EV version. This is a big bet. Giving us the best of the best for one last time may make us view the electric model as cringe-worthy.

As reported in JALOPNIK, an online automotive newsletter, Dodge will use the last models to “pay homage” to the Charger’s and the Challenger’s past. There will be seven models, colors from the cars’ heydays and an “expansion of SRT Jailbreak models.” The Jailbreak models will include the 717 horsepower Charger and Challenger SRT Hellcat. 

The idea is to connect each 2023 model with some element of Dodge’s 1960’s and 1970’s history. There will be a “Last Call” plaque on each vehicle as well as a nod to the American origin of both brands “Designed in Auburn Hills” and “Assembled in Brampton.”

The CEO of Dodge, Tim Kuniskis said, “We are celebrating the end of an era – and the start of a bright new electrified future – by staying true to our brand. At Dodge, we never lift and the brand will make the end of our iconic Charger and Challenger nameplates in their current form in the same way that got us here, with a passion both for our products and our enthusiasts that drives us to create as much uniqueness in the muscle car community and marketplace as possible.”

This sounds great. But, the reasons for the demise of the Charger and the Challenger brands are more complicated and not as brand-passionate as stated. To stay competitive, Stellantis has stated that it wants half of its portfolio to be battery-operated by 2030. This cannot happen with The Challenger and The Charger in the roster.

The Wall Street Journal indicates that Dodge and other makers of sports cars have the problem that the popularity of their models “mostly resides in the power and performance of the engine. Some, like the Chrysler-developed Hemi engine, have become recognized names in themselves.”

Additionally, “the popularity of gas-guzzling models like the Challenger and Charger are dragging down Stellantis’s average fuel-economy rating, which has long lagged behind competitors. That has resulted in the car maker having to pay fines for failing to meet certain environmental regulatory requirements.”

In July, Stellantis announced that it had allocated $685.5 million in anticipation of fines related to not meeting US fuel-economy standards.

One dealer speaking with The Wall Street Journal said, “The transition to electric is going to be important, and I don’t know that we will still have those same buyers,” said John Morrill, who owns a dealership in Massachusetts that sells the Dodge, Jeep, Ram and Chrysler brands.

He said muscle cars attract a very specific kind of old-school customer and getting the shift to electrics right will be critical because the brand’s lineup is already narrow. Dodge currently sells only three models.” Another dealer agreed, saying that he did not see current muscle car drivers making the transition.

If you are in doubt as to the impact of ending the lives of The Challenger and Charger, please note that these two brands “accounted for nearly 62% of the brand’s U.S. sales in 2021. The third model is the Durango SUV.” Other muscle car competitors have not fared as well. And, Ford has already manufactured an EV version of the Mustang.

Whatever the case, the reality is that the end of The Charger and The Challenger marks an end of an American era. It is unclear whether an EV with a synthetic sound may help. American muscle cars were defining. All you need to do is type into Google “muscle car chase scenes” to confirm how embedded muscle cars are in the American psyche.

Dodge is mindful enough to recognize that its muscle car loyalists may not transition well. But, the exigencies of a changing world, changing consumer behavior and changing regulations require automotive companies to change their ways.

It takes guts to cancel The Charger and The Challenger brands. 

The Phoenix Brand: Toys “R” Us

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Guess what? The iconic world of Geoffrey the Giraffe, Toys “R” Us, is back. 

Toys “R” Us is a Phoenix Brand. 

A Phoenix Brand is a brand that has been burned to death yet attains new life and rises the next day. The mythology around the Phoenix is that it is a symbol of renewal. 

If any brand in the last ten years deserves the Phoenix Brand label it is Toys “R” Us. Toys “R” Us’ rising from the flames with renewed life supports the principle that brands can live forever if properly managed. And, now that Toys “R” Us is in the capable hands of a brand-focused firm, your toy shopping just became easier and more delightful.

It is an extraordinary turn-about. Five years ago, the Toys “R” Us brand was in a conflagration.

In 2017, an extraordinary debt load of $5 billion pushed the storied brand into Chapter 11. Reports are that 33,000 people lost their jobs. The 2017 bankruptcy filing set off a months-long effort to restructure the company in bankruptcy court. But, sadly Toys “R” Us liquidated. 

To make matters worse, creditors brought a lawsuit against Toys “R” Us executives claiming that the executives misled their suppliers about Toys “R” Us’ dire financial condition while the company tried to stay afloat in bankruptcy. Then, executives left these suppliers with more than $600 million of invoices. Furthermore, the creditors allege that millions of dollars of bonuses were dished out to 117 Toys “R” Us executives and managers just prior to the company’s 2017 bankruptcy. The suppliers allege that this was a breach of the former executives’ fiduciary duty. Former Chief Executive Officer David Brandon received the largest bonus totaling $2.8 million. The trial of the former executives is slated to begin now in 2022 after several years of legal wrangling.

The bankruptcy judge’s opinion supported Toys “R” Us creditors because sufficient questions surrounding the payment of executive retention bonuses and advisory fees to the company’s equity sponsors – including Bain Capital, KKR & Co. and Vornado Realty Trust – do appear to require the legal proceedings to continue.  The bankruptcy judge said:

“The evidence submitted by the trust, if proven, is sufficient to establish a prima facie case that the defendants violated their duties of loyalty and good faith in addition to their duty of care,” Judge Phillips wrote in his opinion, referring to the retention bonuses paid to 117 Toys “R” Us executives before the bankruptcy filing.

“Payment of the advisory fees was not endorsed by court order, as the payments were made prior to the bankruptcy filings. The evidence offered by the trust supports a finding that the defendants were not constrained by their contractual obligations to the sponsors and had other options available.”

From the ashes of this ugly situation, the Toys “R” Us brand is currently in revitalization mode. And, in a very clever manner.

The brand’s owner, WHP Global, partnered with Macy’s, another iconic retail brand, allowing Toys “R” Us to place Toys “R” Us shops inside all of Macy’s stores. Press reports indicate that by mid-October 2022, Toys “R” Us will open shops in all of Macy’s stores. When Toys “R” Us closed its stores, Walmart, Target and Amazon saw and leveraged the opportunities. Now, Macy’s sees an opportunity to sell toys increasing traffic and loyalty while Toys “R” Us sees the opportunity to rebuild its brand back to enduring profitable growth.

What both Macy’s and Toys “R” Us are implementing is a Combination Branding strategy; more specifically, a component brand approach to Combination Branding. With the component approach to Combination Branding, both brands maintain their own source of their promises. Combination Branding using a component brand approach is “a brand within a brand” not a brand with a brand. The latter would be a co-brand approach where the two brands share the identification of the source of the promise.

For Macy’s, having an iconic, beloved toy shop brand inside its stores provides the ability to compete for holiday shoppers and year-round shoppers in a retail environment currently led by Amazon for online purchases and by Target and Walmart for brick-and-mortar purchases. Toys “R” Us offers Macy’s (as the host brand) and Macy’s customers an additional benefit of a glorious, enchanting world of quality toys and toy shopping. 

For Toys “R’ Us, the partnership provides instant brick-and-mortar facilities, a reliable stream of shoppers and the ability to reinforce its brand with old and new customers. The benefits of Toys “R” Us do not replace Macy’s benefits; Toys “R” Us just enhances Macy’s with a new benefit. Toys “R’ Us does not delegate its brand management to Macy’s and Macy’s does not delegate its brand management to Toys “R” Us.

The chief merchandising officer of Macy’s told investors, “Macy’s cannot wait to bring the Toys “R” Us experience to life in our stores. We hope Toys “R” Us kids of all ages discover the joy of exploration and play within our shops and families create special memories together. The customer response to our partnership with Toys “R” Us has been incredible and our toy business has seen tremendous growth.”

Since Macy’s has been selling Toys “R” Us toys online and with the cascading in-store Toys “R” Us shops, Macy’s CEO, Jeff Gennette, said during its second-quarter conference call that first-quarter toy sales were 15 times higher than the comparable period prior to the Toys “R” Us partnership.

As for Toys “R” Us, the CEO and chairman of WHP Global, told CNBC, “We’re in the brand business and Toys “R” Us is the single most credible, trusted and beloved toy brand in the world. We’re coming off a year where toys are just on fire. And, for Toys “R” Us, the US is really a blank canvas.”

If all goes according to plan, this partnership should be a boon to both Macy’s and Toys “R” Us. Press reporting indicates that brands such as Hasbro are already stocking up inventory to avoid any supply chain issues this holiday season. Hasbro’s CFO confirmed that Hasbro is “well positioned” this year when it comes to inventory. Very good news for Macy’s and Toys “R” Us.

A component brand approach is gaining strength with retailers due to the pandemic. It does not always work out, however. J.C. Penney had a partnership with beauty brand Sephora. But, that relationship is ending to be replaced by J.C. Penney Beauty, an offering with more “mass” brands.

What is clear is that Toys “R” Us is alive and well and focused on rebuilding itself after years of fire and brimstone. Its partnership with Macy’s has a lot of brand potential. And, finally, the Toys “R” Us brand is being properly managed. Toys “R” Us is a story about a brand that is renewing itself. Toys “R” Us is today’s Phoenix Brand.

Barnes & Noble Brand Books

The Revitalization Of Barnes & Noble

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Recently, The New York Times ran a lengthy story about the revitalization of Barnes & Noble, the last book megastore on the American retail landscape. Although some still question the future of the brand, there is no question that Barnes & Noble has come back from the brink. 

In August of 2019, activist hedge fund Elliot Management Corporation purchased Barnes & Noble for $683 million (including debt), taking the bookstore brand private. At the time, responses from the trade and business presses were interesting. Financial Times called the deal “contrarian” while The New York Times hailed the purchase as “a sigh of relief” for book retailing. Elliot Management already owned a UK bookseller, Waterstones and had been successful achieving a turnaround of that UK brand. The turnaround was led by Waterstones’ CEO James Daunt.

Still, for Elliot Management, Barnes & Noble presented a challenge.  The brand had survived close calls many times over since its inception in 1886. (The name Barnes & Noble did not appear until 1917.) The environment for large mega-bookstores was not particularly favorable in the mid-2000’s. Barnes & Noble’s competitor Borders went belly-up in 2011. To counter the onslaught and inroads of electronic books and Amazon’s online sales, Barnes & Noble added non-book items such as music, children’s educational toys, events, and Starbucks’ cafés. Barnes & Noble created its own ereader, Nook, to compete with Amazon’s Kindle, but gave Nook very little attention. Barnes & Noble found itself in the unfortunate middle between Amazon and small, independent stores catering to specific subjects mirroring either the tastes of their owners or satisfying local predilections. Barnes & Noble’s stores became a jumble of books and merchandise unrelated to books. 

The business press and many readers questioned whether Elliot Management could reignite Barnes & Noble for a future of enduring profitable growth. There were many who thought the Waterstones experience was not transferable to the US.

Elliot Management believed that the strategy used by James Daunt at Waterstones – allowing local bookstores to cater to local tastes providing an in-person experience – would work in the US. After all, localization was, and still is, an important driver of sales. So, Elliot Management asked Mr. Daunt to take the CEO position at Barnes & Noble.

As described in The New York Times, “His (Mr. Daunt’s) theory was that chain stores should act less like chain stores and more like independent shops, with similar freedom to tailor their offerings to local tastes.”

When asked about his plan for Barnes & Noble, Mr. Daunt stated that he was not interested in “remaking” Barnes & Noble as Waterstones: he just wanted to make Barnes & Noble a better bookshop. Along with the localization strategy, Mr. Daunt put power back in the hands of the general managers. Mr. Daunt indicated that he would not dictate to the local store managers and staff. Let the general managers select books of interest to that particular store’s customers. Barnes & Noble’s chain strategy had been to fill stores with the same books regardless of geography and neighborhood. 

Mr. Daunt’s strategy for Barnes & Noble’ rejuvenation rested on three critical factors.  Two of these factors are essential for any retail revitalization (1) “Nothing happens until it happens at retail;” (2) “The General Manager is the Brand Manager.” The third factor is essential for all great brands: 3) “Leveraging A Stellar Reputation.”

  1. Nothing Happens Until It Happens at Retail

Revitalizing Barnes & Noble required revitalizing the brand’s in-store, retail experience. This meant articulating the Barnes & Noble brand promise so clearly that every employee understood what the brand stands for in the customer’s mind.  Everything that happens must be focused on bringing this promise of a relevant, differentiated, trustworthy brand experience to life for every customer, every day, in every store.  

According to its website, the mission of Barnes & Noble “… is to operate the best omni-channel specialty retail business in America, helping both our customers and booksellers reach their aspirations, while being a credit to the communities we serve.” Mr. Daunt counted on the desire for personal, human contact when buying books, in contrast to Amazon, which uses technology to personalize online promotions and servicing its brick-and-mortar bookstores.

As The New York Times pointed out, “Buying a book you’re looking for online is easy. You search. You click. You buy. What’s lost in that process are the accidental finds, the book you pick up in a store because of its cover, a paperback you see on a stroll through the thriller section.

“No one has quite figured out how to replicate that kind of incidental discovery online. It makes bookstores hugely important not only for readers but also for all but the biggest-name writers, as well as for agents and publishers of all sizes.”

The concept of discovery is one key reason stores such as TJ Maxx and Home Goods are so popular.

  1. The General Manager is the Brand Manager

No one knows a marketplace locale and its customers better than the store’s general manager. It is the role of the general manager, along with staff, to deliver the brand’s great experience to customers. The general manager brings the brand to life making sure that each and every customer contact meets expectations. It is the responsibility of the general manager to assure the brand lives up to its promises. 

Whether hotels, restaurants or other retail establishments, the importance of the general manager needs to be recognized. The general manager knows the customer’s needs and problems and how to solve these problems. The general manager knows the neighborhood, community and local business relationships. To localize and personalize the Barnes & Noble brand experience, the chain allowed each store’s general manager to be the real brand manager. Each store manager was, and is, in charge of localizing books for locals’ preferences. 

  1. Leveraging A Stellar Reputation

Just because Barnes & Noble was in crisis at the time of the Elliot Management purchase, did not mean Barnes & Noble had lost its positive reputation. The Reputation Institute’s 2018 US Retail RepTrak® Rankings, cited Barnes & Noble as the: “#1 most reputable retailer in America.” 

Data show that brand reputation can alter customers’ preferences for products and/or services they might consider buying. Brands known for being extraordinary in their market gain customers’ confidence. Exceptional reputation distinguishes a brand from brands in its competitive set. A great reputation allows a brand to potentially secure a premium price, generate positive word-of-mouth support and be a barrier to copy-cat brands.

Reputation is based on perceptions that the brand is able to consistently meet the expectations of its stakeholders. The brand must consistently perform its activity over time in a quality manner.

In a dynamic and uncertain world, people seek familiar touchstones of expertise, authenticity and trust. Trust is an increasingly important factor in customer decisions. A strong, trustworthy business reputation contributes to high quality revenue growth. 

Reputation is a source of confidence. Reputation provides customers with authoritative information and credibility. Reputation provides continuity and consistency across all platforms.

Reputation is the overarching evaluation of past performance. A brand can learn from the past and build on that past. For Elliot Management and its Barnes & Noble’s CEO, James Daunt, the key issue was not what Barnes & Noble had accomplished. The key issue was how these past accomplishments were going to drive the brand’s future. What Barnes & Noble did to move forward was not live off of its reputation, but leverage that reputation as a pathway to a profitable, enduring future. 

By focusing on the individual store to deliver the Barnes & Noble brand experience to its local geography and/or neighborhood, the brand succeeded. Barnes & Noble merged its glowing, solid reputation with two other fundamental principles that drive retail, nothing happens until it happens at retail and the general manager is the brand manager. 

Larry Light in Forbes CMO Network

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Larry Light shares insights to help be a beacon of light for brands struggling in a ever changing world dominated by a global pandemic.

Read some of his latest pieces now by clicking on the titles below!

Retail’s New Approach To Saving Retail: Store-As-Showcase

Retailers see small-format stores as the future of retail. Target led the way with small-format stores. Amazon 4-Star stores sell items curated from customers’ ratings, reviews, and sales data. This retail future makes it easy to choose, easy to use, and provides ease of mind.

How Marketing Can Change American Minds About A Covid-19 Vaccine

Trust in government is at all-time low. Many people will decline to take the vaccine. Their minds are already decided. How can their minds be changed?

2021: The Year Of Living Actually And Artificially

Two conflicting trends are shaping the new normal. One trend is our desire for actual products that provide comfort, coziness, conviviality, and contentment. The other trend is our desire for products and services using artificial intelligence and/or virtual reality. 

Demography Is Destiny: The Marketing Challenges Of Pandemic Demography

Covid-19 is changing the demographics of our nation. Coronavirus has decreased the U.S. birth rate while increasing the U.S. death rate. Brands must address this new future of who will be the customers for products and services. 

Looking for a gift for your marketing peers?

Check out our collection of books by Larry Light and Joan Kiddon. They make a perfect unexpected gift for the marketing leader in your life.

See the collection here.

Cover Photo by Brian McGowan on Unsplash

Larry Light: Brand Insights on Pandemic Impacts & More

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Take These Actions Now Or Lose Your New Customers Post-Pandemic

Packaged goods food companies are performing beyond expectations. Will this sales lift last into the future? For enduring profitable growth, brands must not only build their quantity of sales but the quality of their sales. Here are four actions to help the fortunate sales lift endure post-pandemic.

Personalization Will Change Your Car Dealership Experience Forever

Hyper-personalizing the car purchase experience will be a path to auto dealer success. Personalization is about making the customer feel special. Hyper-personalization is focusing on an audience of one for each and every customer, each and every day.

Harley-Davidson: Adore Your Core

A turnaround strategy is different from a growth strategy. When a brand is in trouble, the priority is to stop the hemorrhaging of the customer base. CEO, Jochen Zeitz is making a radical strategic shift to put Harley-Davidson back on the road to enduring profitable growth.

Coronavirus Spurs Brand Innovation

As a result of the Covid crisis, there are a lot of innovative ideas being tested in the restaurant industry to keep businesses alive. For example, many restaurant brands now provide meal boxes that offer more than just meals – they are cooking lessons.

Guitar, Pet, Bicycle: Our Need For Therapeutic Experiences

Home-based therapy experiences that help us feel better are the new normal. Loving a pet overcomes loneliness, which has been exacerbated by being stuck at home, away from friends and sometimes away from family. Financial Times calls this feeling “lockdown loneliness.”

Environmental Decency Makes Money

Sustainable leadership and business practices influence customers’ brand decisions. In today’s environment, data show that environmental decency “significantly impacts” brand preference and purchase.

The Coronavirus Is Forcing Brands To Change

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Arcature CEO Larry Light has recognized some serious implications resulting from the global pandemic and its impact on consumers, from how they work, eat, live and think. Brands, some of which are too big to react effectively, are struggling to keep up with these societal changes.

Read some of Larry’s latest pieces in Forbes on the epic impact Covid19 is having on the marketing world:

The New Age Of I: Isolation And Inclusivity

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The Great Brand Reset: Coronavirus Leads To Fewer Brand Choices

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The Four Rules Of FACE: The Future For Hotels

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Delivery, Drive-thru And Distance: Welcome To The New Disconnect

Read Now

Larry Light Dials In On Domino’s Success in 2020

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In Larry’s latest piece in Forbes, Domino’s Six ‘Can-Do’ Actions Lead To Increased Sales, he lays out the 6 critical actions to Domino’s 2020 success.

Read his latest thoughts now, here.