“Seen in Inagi, Japan.”
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A new installment, for an old form of payment.
This week in Consumed, the layaway plan at KMart and Sears:
Kmart has struggled for years to change its image as the has-been retailer competing with more up-to-date rivals like Wal-Mart and Target, so hyping such a musty, old-school service seems risky, to say the least. But times have changed, Aiello says. “When we talked to customers, they gave us a lot of credit,” he says. “They didn’t see it as tired or a throwback. They saw it as a really great solution.” And not just fixed-budget consumers, he asserts, but also “more affluent people who see it as a risk-free way to get something while it’s in stock, at the price they want to pay.” At Sears, he adds, layaway’s comeback was a direct result of consumers simply asking for it.
Red the column in the November 30, 2008, issue of The New York Times Magazine, or here.
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Honestly I’m too busy to say this well, but just a quick word or two about a recent Wall Street Journal story about improved sales of private-label products as proof that “frugality trumps branding.” (Mentioned also here and here.)
First, private-label sales have been rising steadily for many years. This is not a break with recent trends, it’s a continuation of it.
Second, while many people still describe private-label products as “generics,” the fact is that the broadest trend in the private-label business has been to make such products more brand-like. I get the feeling that some of the people who write about this think you can still walk into a store and find the kinds of totally brand-free generic products, like cereal boxes marked simply Corn Flakes, available in the 1970s (and preserved forever in Repo Man). Obviously, you can’t. Moreover, the familiar tactic of crafting packaging that simply apes brand-name goods, but clearly bears the name of whatever store is selling the stuff, has increasingly been supplanted by strategies that seek to position private-label goods as brands.
It happens that I’ve dealt with this subject in various ways in Consumed:
What unites all of these things is that they’re all very much branded goods. They were simply branded by a retailer, not a manufacturer.
Are they cheaper than manufacturer-branded goods? Often. And yes, that’s partly because, in general (I’ve just noted some exceptions) the brand-building isn’t done by way of traditional advertising, which can be expensive. But they’re also cheaper because there’s no middleman: Stores are dealing directly with production facilities to get this stuff made.
So, sure, private-label goods are probably doing great because more people are being “frugal,” but it’s not just about competing on price alone, or about improvements to the quality of private-label goods. I am certain that the profit margins work out quite nicely for the retailers — and much better than they did back in the days of “generic” goods — precisely because private-label goods today increasingly include something very much like a brand premium.
This looks cool: The Brooklyn Historical Society has an exhibit called Counter/Culture, photos of mom & pop shops around the borough, some of which have since closed, others are still going.
At the Society’s site there’s a series of audio files in which the photographers talk about the project and some of the stores.
The exhibit opened yesterday, and runs through December 28. It’s at 128 Pierrepont, corner of Clinton, in Brooklyn (obviously). Hours here.
Via Gothamist, which has more nice pictures from the show, here.
Well it’s been a long time since I’ve done a Consumed updates roundup, but three things came across the radar that I’ll note here at all at once.
This surprised me: Turns out the mall-based super-discount chain has been in trouble for some months now, apparently owing to a debt management strategy that didn’t hold up in the current credit-challenged environment.
I’d been under the impression that shrewd real estate deals were a big part of the chain’s success. And on my couple of visits to a nearby Steve & Berry’s (admittedly, it’s been a while) consumer traffic was brisk. I guess I would have assumed that its reverse-sticker shock cheapness would have benefited the place in the current slow economy.
I guess not! Debt management is another one of those subjects that gets little coverage because it’s not particularly sexy (and because companies tend not to be forthcoming about it) — yet it can mean a lot more to the success or failure of a business than any amount of press coverage or any number of celebrity alignments.
I’m not sure if this turn of events makes me look bad … but it might. If it does, well, I have no excuses. Mea culpa.
2. Re the February 27, 2005 Consumed on the Victoria’s Secret Pink brand: Ad Age has a piece that says the “thriving” sub-brand is approaching $1 billion revenues. The piece also notes the newest Pink push will be “supported and promoted by a campus tour program and paid collegiate brand ambassadors.”
Pink is, for the first time, hiring two to three brand ambassadors at each of 15 campuses. Hundreds of résumés have been received, and the selected students will go through a training program in August to prepare them for the yearlong assignment.
In doing radio interviews for Buying In, every time the subject of word-of-mouth marketing comes up, either the host or a caller invariably says something like, “Oh, come on, how much of this is really happening?” A lot, okay? It’s routine. Especially (though not exclusively) for brands targeting youth. The “college rep” strategy that was maybe used by record labels a decade or two ago is now used by a wide range of consumer-products and apparel companies, basically signing up students to “get the word out” to their pals about brands. It’s an established tactic. It’s real. And it’ s just one facet of something that, I promise, I’m not making up.
BusinessWeek‘s Michael Mandel has written several pieces highly pessimistic about consumer resilience. This week he assesses retail sales data, up 1.3% in the first quarter even after gas stations and fuel dealers are removed from the figures. (Earlier Murketing post musing on this topic here.) “Nothing,” he writes, seems to stop the U.S. consumer from spending.”
Then he makes an interesting point, something I didn’t know: Online sales from U.S.-based e-commerce sites made to foreign consumers count as part of U.S. retail sales.”
How big a deal is this? Well, e-commerce sales accounted for “roughly 36% of the increase in nonenergy retail sales” in Q1, he says. But there is apparently no data on how much of that came from abroad. Mandel offers anecdotal evidence from Blue Nile, an online jewelry seller: its sales are up 3.8% over last year and “all of that gain came from Internet sales customers outside the U.S.”
I doubt there’s enough of this sort of thing going on to cause a significant difference in overall retail sales, not enough at least to explain why consumer spending hasn’t collapsed — not yet at least — to the degree Mandel’s earlier writings have suggested they will. But he makes a good point: It would be better to have the details on this information, especially given that a weak dollar and other factors are likely to increase overseas sales.
PSFK notes this Japan Today writeup about Muji planning a further push into the U.S. market. Last year the company — maker of many products; the name roughly means “no-brand goods” — got some notice for opening a boutique in SoHo. (It has operated a store within the Moma Design Store since 2004; here’s a Consumed about Muji from January 9, 2005.)
Interestingly they’re sounding pretty ambitious. The president of Muji USA says: “I don’t want to just be accepted by design-conscious people or people who like Asian tastes…I want Muji to be accepted as a generic brand.”
While most brands target a certain segment of consumers, the purpose of being ‘‘a no brand’’ is to appeal to all people by ‘‘simply providing products that are comfortable and convenient.’’
The Japan Today item quotes a number of people who all seem pretty skeptical that Muji can make it outside “trend-conscious” locales like NYC. It also mentions something I didn’t know, which is that Uniqlo closed its three locations in New Jersey. I was really interested in those at the time, partly because I was living in Jersey, but also because I thought it was a really interesting move to test the waters outside of Manhattan, which is really an atypical retail setting. I was briefly in touch with somebody from Uniqlo at the time and my memory is that this was a very explicit strategy on their part, that they didn’t want to just be focused on superconsumers who prowl SoHo.
I guess that testing of the waters didn’t go so well? Or maybe they just shifted tactics. I have no idea what either company’s strategy is at this point, but if Muji is serious about trying to build a more mainstream base in the U.S., it’ll be interesting to see how the company goes about it. Apart from the forthcoming Times Square location, the article mentions “small outlets” in New York airports. Hm.
Peter Schjeldahl’s Murakami writeup in the New Yorker is worth reading, even though, or maybe because, he’s not a Murakami fan. His favorite bit of the show was actually the Vuitton store outside:
The shop is lovely. Shelving units in chrome and white enamel, with recessed fluorescent lighting that sets brass fittings on the merchandise aglint, caress the eye. They provide a haven from the strident grotesquerie of what might be termed Murakami’s fine-art product lines: paintings, sculpture, and wallpapered environments that play off the charms of Japanese traditional and popular arts with close to no charm of their own.
But, then, retail swank is an aesthetic lingua franca today …
The rest here.
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Premium Outlets: How a new-luxury brand manages the dances with the mass market.
There was a time when outlet centers were associated with the grubby matter of liquidating unsold merchandise to unglamorous bargain hunters in a low-rent building in the middle of nowhere. Clearly this image has evolved, and many apparel makers even manufacture products specifically for their outlet channels. About 10 years ago, the Chelsea Property Group (a division of Simon Property Group) recognized an opportunity in this low-end category: branding high-end outlet shopping. Today, Chelsea Premium Outlets operates in dozens of locations in the U.S. and abroad, including the sprawling Woodbury Common Premium Outlets, about an hour north of New York City. Current Woodbury tenants include Jimmy Choo, Tory Burch and True Religion….
Continue reading at the NYT Magazine site.
The savvy modern consumer doesn’t just wander into a store and buy stuff. S/he researches online, taking full advantage of previously unheard-of information-gathering technologies and like that. And then what happens? According to a study underwritten by Yahoo and something called comScore, s/he spends more money than people who don’t “pre-shop” online. Supposedly this is because of exposure to online advertising.
A release says:
Exposure to online advertising is fundamentally changing the way consumers shop, according to new research from Yahoo! and comScore, Inc. The study, which examined the impact of search and display advertising on in-store sales for five major retailers, showed that consumers exposed to online advertising tend to research or ‘pre-shop’ online prior to purchase, and this behavior ultimately leads to increased in-store sales. These highly-engaged ‘pre-shoppers’ spend an average of 41 percent more in-store when compared to consumers not exposed to online advertising.
I’m not sure I believe this, or at least that online advertising has much to do with it. But it’s interesting. Via Retail Design Diva.
The world’s largest retailer on Wednesday is launching the “Roommate Style Match” group on Facebook, a social networking site that has millions of college-age users, in the hopes of grabbing a larger chunk of back-to-school shopping dollars.
Facebook users who join the Wal-Mart group will be able to take a quiz to determine their decorating style and get a list of “recommended products” they can buy at Wal-Mart to mesh their style with their roommate’s.
Via Retail Design Diva.
Pitchfork interviews Debbie Harry, and the conversation turns to CBGB’s, which shut down a while back:
Pitchfork: It’s ironic that it’s living on as a fashion store.
Debbie Harry: Yeah. There’s a double edge to that, too. The girls who started the merchandising and t-shirts for CBGB’s are singers, Tish and Snooky. They used to be my backup singers for a little while. They had a band of their own and used to perform at CBGB’s, so were really a part of CBGB’s from the very beginning. They had a store on St. Mark’s Place where they sold used clothes. They used to buy dresses in these huge bundles form some warehouse. They’d buy these bulk things of old clothes and just make a huge pile in the center of the floor. People would go in there and dig through. That was Manic Panic.
Pitchfork: Could you imagine CBGB’s being better known as a brand than as a punk venue?
Debbie Harry: Well, CBGB’s was always based on finding music. So if you’re actually going to wear the logo, you’re wearing a logo that’s about finding music. That’s kind of nice.
Something I did not know until pretty recently is that Urban Outfitters has a cool-spotting-ish kind of blog. One recent post pointed to the work of Barnaby Barford — “mass produced ceramics get remixed,” the site says.
Another post points to another web project called Free Yr Radio. “Urban Outfitters loves College and non-commercial radio so we’re putting on shows in our stores to help raise money so they can keep their share of the airwaves.” Also mentined is that Free Yr Radio is “crafted” by Urban Outfitters, and Yaris. Yaris is the Toyota car brand that seemed to be trying, a year or so ago, with the DIY/craft asthetic. (Its slogan was “D.I.Y. — Drive It Yourself.”) This got a mixed reaction. Urban, meanwhile, has kind of been a favorite punching bag of indie designers, crafters, and so on, because it’s got a reputation for stealing ideas.
I’ve heard many anecdotal reports of Urban trying to reach out and do damage control with the indie community. I’ve not heard many reports of anyone being convinced. I’m not sure how these online projects will help or hurt those efforts, but I’m quite curious.
Something to monitor.