Wednesday, August 24, 2016

Marketing Private Brands

Private brands--also known as private-label--are created or owned by retailers and other channel intermediaries.

Supermarkets are heavily into private brands, as are many general merchandise retailers like JC Penney (which owns Arizona, shown at right). Why? Because these are exclusive to the store and, just as important, they have higher profit margins.

Twenty years ago, an article in the Harvard Business Review said:
... private-label strength generally varies with economic conditions. That is, private-label market share generally goes up when the economy is suffering and down in stronger economic periods.
Today, however, the economy is strengthening and so are private brands. For example:
  • Kohl's is seeking a turnaround based on private brands such as Sonoma, Croft & Barrow, and others that are or have been mainstays of its revenue base. However, how will this resonate with shoppers seeking well-known national brands?
  • JC Penney is also putting more emphasis on private brands such as St. John's Bay and Arizona as it seeks a turnaround. In 2015, private brands accounted for 52% of Penney's sales--but by 2019, the marketing goal is to have private brands contribute 70% of Penney's sales.
  • Target wants shoppers to prefer its private-label food products, marketed under brands such as Market Pantry and Simply Balanced.
Private brands are here to stay. The question is, how much emphasis is too much emphasis?

Thursday, August 18, 2016

Apple Pay Competes in Contactless Payments

Apple Pay continues to expand its reach in the US and abroad. Above, Apple Pay is accepted in a New York vending machine, as contactless payments gain ground little by little.

According to Apple's CEO, Apple Pay accounts for 3 out of every 4 contactless pay transactions in the US. By the end of 2017, Apple Pay will be honored by an estimated 76% of US retailers.

The mobile payments world is not only highly competitive, it's still fluid as the technology evolves and consumer behavior evolves. Some consumers are trying Apple Pay but not adopting it as a payment habit.

So Apple Pay and its competitors continue to try to influence consumers' payment choices and brand preferences. Stay tuned.

Monday, August 15, 2016

Brands Pin, Pin, Pin on Pinterest

A growing number of brands are doing more on Pinterest to promote new products, cast a wider net, strengthen relationships with brand fans, and reinforce brand associations.

Pinterest, and its Promoted Pins, have attracted interest from L'Oreal, Burberry, La Mer, and other established brands.
  • L'Oreal studied one of its Pinterest campaigns and find gains in new product awareness, message associations, and purchase intention. 
  • Burberry is partnering with Pinterest for a personalized campaign starring its new Cat Lashes mascara.
  • La Mer is seeking to stimulate Pinterest word-of-mouth for its skincare products.
Oh, and that old "Buy It" button? Goodbye--now Pinterest users can simply click to "add to bag" and shop their way across boards and platforms.

Monday, August 8, 2016

Marketing Nordstrom in Canada: Customers First

Based in Seattle, the upscale fashion specialty store Nordstrom sums up its marketing purpose this way:
Since 1901, we've been committed to providing our customers with the best possible service—and to improving it every day. 
Nordstrom has three full-service locations in Canada and three more on the way. First to open will be the new store at Toronto Eaton Centre in September, followed by the new store in Yorkdale Shopping Centre.

At left, one of the ads paving the way for these full-service store openings. You First is the message, reinforcing Nordstrom's marketing positioning and a key point of differentiation.

Nordstrom has a well-deserved reputation for service--which will help it compete in the increasingly crowded Canadian retail market. The company is also opening additional Nordstrom Rack stores with off-price/discount merchandise, adding to its strength in relatively affordable fashion.

Thursday, August 4, 2016

Reinventing JC Penney -- Again

Yet again, JC Penney is reinventing itself.

Back in the 1960s, JC Penney was battling archrival Sears and decided to stock household appliances as a way of attracting customers seeking a wide range of merchandise.

That strategy lasted for about 20 years. Early in the 1980s, JC Penney pivoted to get out of appliances and focus on soft goods, which have higher margins, faster turns, and lower inventory investment.

Fast-forward 30 years, and JC Penney was fighting to keep customers as department stores launched one price promotion after another. Penney tried "fair and square" everyday low pricing, and bulked up on higher-margin fashion items.

However, customers really liked promotional pricing, having grown accustomed to endless price cuts or coupons or both during the long recession. "Fair and square" wasn't an effective competitive strategy as the recession ended. So JC Penney had to reinvent itself, again.

Today, it's back to the future--with appliances. After a pilot project early this year, JC Penney now is rolling out appliances to hundreds of its stores.

This gives shoppers more options for where to buy a dishwasher or stove, as well as other items for the home. And it expands JC Penney's merchandise and brand mix in a way that invites "one stop" shopping in its stores. But it also is an expensive merchandise move that may or may not pay off, IMHO.

Tuesday, August 2, 2016

U.S. Companies Feel Impact of Brexit

Five weeks ago, a U.K. referendum resulted in the forthcoming exit of the country from the European Union. The timetable isn't yet known, but the country is preparing plans for an orderly exit and the simultaneous negotiation of new trade pacts with European trading partners.

Across the pond, U.S. companies are feeling the impact of Brexit. First, the currency issue is changing profit and cost projections--because of the see-saw value of the pound sterling versus the U.S. dollar. When the value of the pound drops, the dollar is stronger, a concern for U.S. companies (like Carnival cruise lines) doing business in U.K. markets. Currency fluctuations change the cost of supplies purchased by U.S. firms from U.K. sources--uncertainty that affects not just the bottom line but the marketing plans for the remainder of 2016.

Multinational banks based in the U.S. are watching to see whether London will remain a financial center and gateway to Europe. All have contingency plans for dealing with the challenges if they decide to relocate for better access to European customers (commercial customers as well as consumers). Some mergers and acquisitions between U.K. firms and others outside the country are being postponed or taken off the table due to the uncertainties and the financial repercussions of Brexit. Airlines are reevaluating routes to and from (and within) U.K. destinations.

A lot of U.S. companies buy and sell in the U.K., and Brexit appears to be dampening the economic climate in Great Britain and beyond as firms try to determine a way forward during this transition period. Consumer confidence is down in the U.K. and the result is likely to be slower spending, which will hurt marketers that target consumers.

How will U.K. and international holiday spending be affected? What about "affordable luxuries" that tend to do well despite economic ups and downs? And global travel?

Sunday, July 24, 2016

Hotel Chocolat's Very British Brand

Now that the UK-based Hotel Chocolat has gone public, it has additional resources to support an expansion strategy. The company began as an online retailer of luxury chocolate gifts, targeting UK consumers and businesses.

A decade after establishing itself on the web, it opened a physical store. Now the company has more than 80 shops across the UK plus an actual hotel adjacent to a cocoa plantation on Saint Lucia.

At one time, Hotel Chocolat had a handful of US stores but closed them a couple of years ago. It retains its online presence selling to US customers, however.

Eyeing another round of international retail expansion, Hotel Chocolat has a franchise presence on Gibraltar and is also opening company-owned chocolate boutiques in Copenhagen to assess the opportunities for this very British brand.

Hotel Chocolat has more than 100k likes on Facebook, 52k followers on Twitter, and more than 3k followers on Pinterest, among other social media activities.

Tuesday, July 19, 2016

Background on Brands

 B R A N D  R E S E A R C H

Researching a brand for your marketing plan? Search the Web for research about that brand and its main competitors.

As you click through the results of your search, pay attention to where/when/how each research study was conducted. Also look at research results over time--how has the brand's ranking changed? What issues affect the brand's standing year by year? These clues can help you better analyze the brand as you continue your marketing planning.

Here are just a few resources focusing on brands, branding, and public perceptions:
  • YouGov BrandIndex. "Tracking public perceptions of thousands of brands across the world every day." That's how YouGov describes this site, which covers many brands in many markets through ongoing interviews with millions of consumers.
  • InterBrand Best Brands. Interbrand ranks brands within and across countries, with both global and national lists of the best brands.
  • Fortune's rankings. In addition to the Fortune 500, the magazine presents rankings of "most admired" companies, fastest-growing companies, and other key lists to consult.
  • Gallup research on brand engagement. Research examines multiple aspects of brands and customer involvement, including reactions of Millennials.

Thursday, July 14, 2016

Marketing With Pokemon Go

The Pokemon Go phenomenon might be a summertime spike or something more lasting, but while it's popular, marketers are jumping on the bandwagon.

Pokemon Go is a new smartphone game based on the old Pokemon characters, with the special twist that players wander in the real world looking to "capture" characters in various locations. Here's what the Pokemon website says about the game:
Get on your feet and step outside to find and catch wild Pokémon. Explore cities and towns around where you live and even around the globe to capture as many Pokémon as you can. As you move around, your smartphone will vibrate to let you know you're near a Pokémon. Once you've encountered a Pokémon, take aim on your smartphone's touch screen and throw a Poké Ball to catch it. Be careful when you try to catch it, or it might run away! Also look for PokéStops located at interesting places, such as public art installations, historical markers, and monuments, where you can collect more Poké Balls and other items.
Local businesses are excited about the number of potential customers coming to their premises in search of wild Pokemon characters. Several restaurants and bars reported super increases in sales after investing about $10 for "lure" packages. Businesses can become "poke stops" to boost the user's stock of balls, attracting foot traffic in the process. It's a matter of harnessing high interest and engagement to shape customer behavior, at least increasing awareness of the brand or location and at best, gaining trial and purchasing.

Nonprofits are also part of this craze. From nature preserves to museums and beyond, organizations are taking the opportunity to invite visitors to catch Pokemon characters with them. Although not all places are happy about being involved without first being asked, some nonprofits are suggesting that advocates organize Pokemon Go walking tours to raise money for charity.

Go Pokemon Go!

Tuesday, July 12, 2016

Today Is the Second Annual Amazon Prime Day

Partial screen shot of Amazon Prime Day home page
Today is Amazon's second annual Prime Day--a shopping day designed to rival Black Friday with low prices and speedy shipping exclusively for members of the retailer's Prime program.

One goal is to attract new Prime members, who pay an annual fee for benefits such as free two-day shipping, access to audio and video entertainment, early notification of bargains, and more. As always, consumers are invited to enroll in Prime for free to try it for 30 days. The more people who try, the more who are likely to remain members after the free trial.

Another goal is to increase interest in and usage of other Amazon offerings such as Alexa, the virtual shopping assistant who's the voice of the Echo speaker. This year, the retailer is offering a number of Alexa-related specials.

Of course, Walmart is taking aim at Amazon by offering its own special deals today. Actually, some of the deals began yesterday and will continue for the week, with free shipping thrown in to combat Amazon's shipping deals for Prime members. Like Amazon, Walmart is relying on sale-priced electronics to catch the eye of shoppers, mixed in with other low-priced products.

How will Walmart do? Will Amazon Prime Day surpass the 2015 sales record? How many new Prime members will sign up--and how many will stay after the free period is over?