Small Business Saturday 2014

Four years ago, American Express jumpstarted the very first Small Business Saturday--the Saturday of Thanksgiving weekend, directly after Black Friday, a day on which customers consciously buy from small and local businesses wherever possible.

Fast-forward to 2014: Small Business Saturday's Facebook page has 3.3 million likes, 38,000 Twitter followers, and its own hashtag (#ShopSmall). American Express continues to offer cardholders financial incentives to buy local on Saturday, November 29th. Word of mouth is strong and positive, and social media marketing is creating a buzz.

Thousands of small businesses across America are gearing up to participate with special promotions and merchandising support. I've seen signage and ads in my local area, and have set aside time for buying from small businesses this Saturday. With the economy improving, 2014 promises to be the best year ever for Small Business Saturday.

Big marketing for shop small!

Intel + Big Bang Star = Smart Brand Marketing

Intel is about to launch a clever campaign featuring Jim Parsons, known for playing the part of super-nerd Sheldon Cooper on The Big Bang Theory since the TV show's debut. 

Parsons is a well-liked, high-profile sit-com star with Broadway chops. This is congruence of the highest order--pairing a smart guy who plays a smart character with a brand that has a cutting-edge image. Since Parsons has no other big-brand endorsement deals, his involvement with Intel will have more resonance.

Intel's RealSense Technology is part of the company's drive to power the future of computing and mobile devices. Rather than bore audiences with technical stuff, Intel wisely decided to let likeable Jim Parsons be impressed by the amazing things the technology can help users accomplish.

Intel has a lot of experience with "ingredient branding," from its many years of "Intel Inside" marketing to get consumers to ask for PCs with Intel microprocessors. This newest campaign will have all the usual social media components, YouTube and Twitter and beyond. Can't wait to see what else Intel has up its sleeve for Jim Parsons!

Macy's Woos In-Person and Digital Shoppers

With 20 million visitors every year, Macy's sprawling Herald Square flagship store is a massive (2 million + square feet) retail location. Fifty years ago, this venerable store carried anything and everything a growing New York City family might need. Today, US department stores no longer stock fabric by the yard, needlepoint supplies, or paint-by-number hobby sets, but back then, Macy's had it all and a lot of choices--at a variety of price points from bargain-basement to couture-level!

Now this 34th Street flagship has emerged from a multiyear makeover, shined up, modernized, and remerchandised with an eye toward local/tourist shoppers. This is worth blogging about, because it represents the way merchandising was accomplished before computers.

Decades ago, buyers had offices in the main store and roamed the aisles to observe shopper behavior and ask questions about preferences. With input from department managers, merchandise managers, and store managers, the buyers would then tailor each branch's inventory allotment to the needs and buying patterns of shoppers in the local area. In this case, Macy's flagship is a tourist magnet, attracting shoppers from all over the planet. Therefore, Macy's must consider local shoppers (mid-career men and women, Millennials, families, etc) and the tastes of tourists from Europe, the Americas, Asia, and beyond. In fact, Macy's welcomes international shoppers by hosting a tourist bureau on its mezzanine level and offering a discount to shoppers who show a foreign passport.

Given the sheer size of the Macy's retail empire (nearly $28 billion in annual revenue derived from Macy's and Bloomingdale's stores), localizing merchandising is no small feat. This competitive effort has been going on since 2008, a way to distinguish Macy's from rivals and make the Macy's name represent a meaningful advantage in each local market. But the benefits outweigh the challenges, as the company understands. Having the appropriate mix of brands and products, in sizes and styles that fit local or tourist shoppers, will satisfy shoppers from near and far--and help Macy's top line and bottom line. Not to mention all the digital marketing initiatives undertaken by Macy's in recent years.

P&G Cuts Brands to Focus on Four Categories

Procter & Gamble's long-term marketing strategy is to focus on its core brands, and divest as many as 100 others that aren't as profitable or don't fit with the categories it wants to dominate: (1) global beauty, (2) global baby, feminine, and family care, (3) global fabric and home care, (4) global health and grooming. Currently, P&G has 25 brands that each ring up more than $1 billion in annual sales worldwide.

Today P&G sold Duracell to Berkshire Hathaway in a complex financial deal. Earlier, it had divested 2 dozen other brands, including fragrances (Naomi Campbell, Iman, Avril Lavigne) and laundry products available in limited geographic markets (Lavasan, Essex, Magia Blanca, Rol, Perla, Neoblanc).

You can follow P&G's strategy announcements here and see P&G's comments on its core strengths (consumer understanding, brand-building, go-to-market capabilities, and innovation) here. What other brands will P&G divest? Stay tuned.

Crowdsourced Product Ideas = Engaged Customers

Sarah Barmak, writing in Canadian Business posted on Marketing, makes a very important point about crowdsourced product ideas.

You know, like PepsiCo's Frito-Lay "Do Us A Flavor" contest (2014 winner: Kettle Cooked Wasabi Ginger flavor) and Tim Hortons' "Duelling Donuts" vote (2014 winner: Love Reese's to Pieces, shown at right).

The contests draw lots and lots of ideas: Hortons received more than 76,000 entries.

Will these crowdsourced flavors become perennials on grocery shelves? Unlikely. They're new and they're different, which is much of the appeal.

For variety-seeing consumers, they'll be fun to try and talk about. For stores, they'll build traffic and attention. For a limited time.

The real value is in engaging customers, generating excitement, and revealing how and where customers prefer to interact and communicate with brands.

The head of PepsiCo Food Canada explains: "As we evaluated last year’s [Do Us a Flavor] program, we found that consumers want to engage on other channels as well." As a result, PepsiCo expanded voting platforms beyond Facebook to include Instagram, Twitter, even text messaging.

The more platforms, the merrier--more ways to reach out to consumers, more ways to hear from consumers, more brand awareness, more excitement.

Costco's Value Equation and Metrics

The December Consumer Reports has a one-page interview with W. Craig Jelinek, CEO of Costco. With 664+ warehouse stores worldwide, and annual revenues of $110 billion, Costco has earned high marks for providing good quality at great prices (not to mention paying its employees a living wage and providing benefits). The newest Costco will open near South Bend, Indiana, this week--just in time for the holiday shopping season.

The CEO interview confirmed details that Costco has released over the years. First, it limits its merchandise markups. The average is "in the 11% range," Jelinek told Consumer Reports. I've seen estimates of the markup as high as an average of 15% but that's still quite reasonable. Costco understands that members who pay for the privilege of shopping expect tangible value--meaning real cost savings reflected in the price tag. So one of the metrics it holds dear is markup, aiming for an average that fits with the target market's value equation.

Another part of the value equation is quality. Jelinek explained that its leading private label, Kirkland Signature, must have quality equal to or better than a comparable manufacturer's brand--at a price that's 20% or more below the competing item--more metrics. Today, roughly one-fifth of the products sold at Costco are Kirkland Signature. So while customers are happy to find top global brands like Sharp and Michelin, they're also pleased by the value equation of Kirkland Signature.

One more point Jelinek makes in his interview: New products get about 9 to 12 months to prove themselves. If they don't attract a solid following in the product adoption phase--if after introduction, weekly metrics show they don't meet sales projections set in the marketing plan--they're gone.

What's the Role of Stamp Marketing?

The U.S. Postal Service is working hard to come up to marketing speed. It needs revenue, and it provides direct-to-door delivery at a competitive price. In fact, given the price of postage around the world, U.S. first-class stamps are a relative bargain.

Now the USPS is being criticized for, well, marketing. Specifically, for issuing stamps with particular commercial value, rather than mere commemorative value. In part, the point is to encourage purchasing and in part, to encourage a revival in stamp collecting among a new generation.

In the bottom row left, the Batman stamp that has been a lightning rod for criticism because it represents an ongoing partnership with Warner Bros. and DC Entertainment. In limited edition, it was released at New York Comic Con. Commercial? Definitely, as was a Harry Potter stamp series and other pop-culture stamps.

In the top row right, the Rudolph stamp for 2014. Issued 50 years after the animated Rudolph special hit TV screens, the stamp evokes nostalgia with a commercial angle--and has provoked comments like this one from a former Postmaster General, quoted in Bloomberg Businessweek: "They have really ruined the stamp program. They have prostituted it in an effort to make money."

What is the role of stamp marketing? One former member of the committee that sifts stamp ideas and recommends subjects says the USPS should avoid issuing stamps "with the same profit motives as Big Macs, Slurpees, jeans or neighborhood tattoo parlors."

Given the financial situation of the USPS, stamp marketing must take profitability into account. Yet tradition has a definite place: Last year, the USPS issued a new version of the "Inverted Jenny," a stamp famous for the airplane (the Jenny) being mistakenly printed upside down. The originals are rare and celebrated.

Issuing a new version was more than a way to stimulate purchasing: It also put a smile on the faces of ordinary buyers and collectors alike, because of the back story and the decades of history involved in the Jenny mistake. Reinforcing a positive attitude is certainly a valuable role for stamp marketing.

Skechers Races toward Higher-Profile Marketing

Skechers, the shoe company, is racing toward higher-profile marketing. It just signed rock star Ringo Starr (the Beatles' drummer, remember?!) to appear in an ad campaign for its Relaxed Fit line of footwear. Other ongoing endorsement deals are with veteran football quarterbacks Joe Montana and Joe Namath and other athletes.  

Earlier this year, Skechers got a huge recognition boost among serious runners when Meb Keflezighi won the Boston Marathon--wearing Skechers shoes, which he endorses. Tomorrow's New York City Marathon may give Skechers the same kind of boost if the social media-savvy Meb Keflezighi races over the finish line first.

In fact, Skechers is going for even more publicity with a limited-edition running shoe released especially to coincide with the NYC Marathon. The supporting campaign includes the #haveafastday hashtag to tie in with the Marathon. Skechers' Twitter account today, on the eve of the race, shows its two elite running endorsers: Meb Keflezighi and Kara Goucher. Same for its YouTube channel.

All this publicity and social media mania can only help Skechers in the heated race for market share, competing against Nike, Adidas, and other big-name performance shoe marketers with mega-buck marketing budgets.

UPDATE: Meb finished fourth in the NYC Marathon, Kara finished fourth among US women (14th overall).