July 2012 - To Be A Great Store Brand, You Must Take A Stand
There are some prominent brands we want to take a look at (with a critical eye) because we feel there is a lot to learn from their struggles for stores of all sizes and types. Each of these retailers has a story to tell and a brand image that should be communicated to its target customers. When this is done right, it connects consumers to the products and helps to improve the store experience. As we always stress, branding strategy and implementation are essential to long-term retail success.
This store came within a few days of bankruptcy this spring and now we are awaiting the announcement (by new owners) of the tenth turnaround plan the company has had in the past ten years. First Talbots got younger, then older, and then more fashionable, then more classic.
The problem really was that they lost their merchandising skills and became infatuated with artificially high mark-ups. This model of designing and controlling the production of all the store's merchandise was considered innovative and game changing when done by the Gap in the late 1980's. Many specialty store chains (Limited, Ann Taylor, Talbot's, A&F, American Eagle, Coach and on and on) followed in becoming "the store is the brand" type retailers.
However, in recent years, "fast fashion" has come into vogue. Fast fashion works because, unlike Talbots and the Gap who are working a year in advance of the arrival of much or their inventory, merchandise is bought very close to the time it arrives in stores Thus it is much more likely to be the current and correct styles in the in colors. Talbots has one color palate for an entire season and one design team does the entire store. Because of the huge quantities necessary to achieve desired economies on these, almost always imported, programs...usually variety in terms of items and fabric (piece goods) is very limited.
In the 1970's and 80's Talbots was the Brooks Brother's (we'll talk about them in a second) of women's apparel. They were trusted, admired and regularly shopped by 45-65 year old women who wanted a quality, timeless, classic look. Talbots is the perfect example of a company with a tragic flaw. In their case it was believing that great merchants can also be great designers. It is a tragedy because what they were doing was really working. If they had just continued with the great brands and designers who had goods that worked for Talbot's women there is every reason to believe they would have thrived through to today.
We strongly believe the only way out of the situation is for Talbots to go back to their roots* and re-introducing outside brands and a variety of designers. The store will then no longer be boring nor offer weak, uninteresting products at inflated prices.
*Talbot's has a very interesting back story based on a husband and wife team who broke off from the Johnny Appleseeds catalog and store operation in the 1950's to open their own store in Hingham, MA.
A few years ago this store was in the same position as Talbots. Thirty years ago it was the go-to store for men of means and the label was one successful businessmen were proud to show off. However, imports and inflated mark-ups meant a steady dilution of quality and loss of customers and cache for Brooks Brothers. Brooks Brothers is getting beaten up by Jos. A. Banks (which the FTC should shut down...but that is a newsletter for another day) and Men's Warehouse.
Since coming under new ownership in 2001, it seems as though they have seemingly recommitted to quality and service, and have upgraded their inventory to a level that has the potential to bring this nearly two hundred year old legendary brand back to the lofty position it once held. Brooks Brothers has an amazing tradition that includes wardrobing presidents and royalty and that we are hoping is being revived.
Abercrombie & Fitch
Did you know that Teddy Roosevelt shopped regularly at A&F? Did you know that the origins of the original Teddy Bear are with Teddy Roosevelt and Abercrombie and Fitch? Look it up!
A&F was once a Wall St. based specialist in hunting clothes and accessories for the rich and famous. Now the brand stands for edgy borderline sexism and racism, not to mention questionable hiring practices. They believe because they attract attention through negative news, they have a sound business philosophy.
While their practices sometimes do work (to our dismay), in no way are they validated. Though we advocate great marketing and it is essential to retail success A&F is overly dependent on it's image and they are not great merchants. We believe without great product that connects with their target customer, ultimately they will be unable to maintain their image and their business. Many companies are thriving because they do things the right way and are concerned for their fellow citizens and the environment. In the long run Patagonia, Whole Foods, Wegman's, Trader Joes, Container Store and the many others do business ethically will become the "heritage" brands and A&F will be forgotten...we only hope they don't bring the "Teddy Bear" down with them.
Many of the problems that the stores we have featured above have experienced have resulted from them straying away from their customer base. Frequently stores try to add new customers at the expense of the ones the already own. Why we ask?
When you have loyal customers, just continue to serve them, know them and provide for them better than others. Retail Concepts successfully works with many of it's clients to help them better understand and better serve their target customers. We wish we had a chance with Talbots, Brooks Brothers seemingly is doing it quite well on their own, and we wouldn't want to help an organization with lack of business ethics that A&F has shown. What about you?