Retailers are destroying Black Friday

Posted on Posted in Beloved Brands in the Market

Black-Friday-LineFor the past 20 years, it has been a tradition for american families to plan out their friday after US Thanksgiving by hitting the malls as the kickoff to Christmas season. For us too lazy to get up at 5am, it has been fun to watch on TV, seeing doors flung open with screaming people trampling each other trying to get to those door crasher specials. Whether you like the idea of “Black Friday” or not, retailers are doing what they do best:  taking a good thing and messing it up.  

Last year, we saw “Black Friday” ads on the Monday of Thanksgiving. This year, we saw them the week before. The problem when you mess with Black Friday is that you lose the buzz and excitement. You also lose the irrational consumer behavior brought about by the energy of the moment. So Black Friday used to mean getting up at 5am, running through the store to grab that Samsung TV for $179 by 6:15am and then adding a TV stand and gold-plated cables at full price on the way out of the store. Just like any emotion, causing consumers to feel more and think less puts the power into the hands of the brand. Retailers were winning this transaction. That’s gone if you do your sale over 10 days. You are just giving consumers time to think, search other websites and come to a rational decision. Now with time on their side, consumers can shop around for a week, review the specs on the TV and figure out that it has been down-graded with a lack of features, determine the gold-plated cables are a waste of money and just go to IKEA for the TV stand. Maybe they can even talk themselves out of the TV!!!  Why? Because now they can use their brain. After all, that buzz is gone.

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Another crazy trend is the idea that retailers open on Thanksgiving evening. Retailers are always trying to get a leg up, so they are now all trying to open when no one else is open. And yet with a low barrier to copy, they all just follow each other and negate any advantage. Last year the trend started where major retailers including Wal-Mart, Target, Best Buy and Sears opened on Thanksgiving Day–the night before Black Friday. This won’t mean a jump in revenues it just means revenues will be brought forward one day. Yes, retailers have this belief that it’s a constant dog-fight for sales, and if one my competitor gets a leg-up, that means a loss to me. Retailers are facing such pressure during these economic times so I’m somewhat sympathetic. Margins are shrinking and many retailers basically make or break their year during Thanksgiving and New Years. So I can understand the temptation. Before we get into the ethical part of opening, let’s look logically at the 8 ways a brand can make more profit: 1) increasing prices 2) getting consumers to trade up 3) lowering your cost of goods 4) lowering your marketing costs 5) stealing other users 6) getting users to use more 7) entering new categories and 8) getting new users. I realize it’s all about stealing other users. But if both competitors blink and open at 8pm on Thanksgiving, no one really wins over the consumer. The only thing I see here is a slight increase in the costs of increased wages and store opening costs. Net net, no one really wins.Slide1

So at the year end, no retailer will really be saying “we had a great year because we opened on Thanksgiving Day”. But come on guys, while your press releases are saying that you’re really just “catering to consumer demand”, we business people know that’s BS. I’d rather see all Americans sitting around the dinner table and watching football (go Patriots) with family and friends. If families are your main target market, you should be making a big deal out of the fact that you are closed so that all employees can spend time with their families. That’s a great way to establish love for your brand. My Hope is the Retailers Announcer Early that they will be closed on Thanksgiving 2015!!!

To all our American Friends, I want to wish you and your families a Happy Thanksgiving

At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To read more on strategy, here is a workshop on HOW TO CREATE A BELOVED BRAND, click on the powerpoint presentation below:

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GAP Clothing: The fall from BELOVED all the way to INDIFFERENT

Posted on Posted in Beloved Brands in the Market

GAP Clothing was once a BELOVED Brand, back in the middle of the 1990s. It was loved by consumers, envied by marketers and revered in the retailing world.  In 1990, it celebrated it’s 1000th store opening and was the place to go for stylish trendy clothing at a reasonable price. At one point, GAP had an Inventory Rotation of “8 seasons” per year, just to keep up with the consumer’s desire to see new products as they walked through the GAP stores for the umpteenth time. Consumers couldn’t get enough of GAP.

Fast forward to 2011, GAP Clothing sales are down 19% this year and down over 25% since the peak of 2005. And they’ve just announced the closing of 200 stores–which will continue the downward spiral.   Who cares about inventory turns when people aren’t even walking into the stores?

This year, GAP filed a lawsuit against GAP Adventures saying they felt having the co-existance of the two brand names “caused confusion in the marketplace”.   Considering that GAP Adventures is having a record year and is one of the most BELOVED brands in the adventure travel business, you would think GAP Clothing would think that confusion was a good thing.   For GAP Clothing to be complaining about being mixed up with GAP Adventures feels like George Castanza complaining about being mixed up with George Clooney.

Brands ride THE LOVE CURVE, going from Indifferent to Like It to Love It and then it becomes a Brand For Life–at each stage gaining a more emotional consumer connection with the brand. GAP Clothing rode this curve all through the 70s and 80s and by 1995, it had achieved the enviable “Brand For Life” status, which very few brands achieve.

But GAP got greedy and forgot what made them great: trendy fashion for a stylish generation at a reasonable price. And who is the spokesperson for fashion:  the coolest people on earth…TEENAGERS of course. Every generation of Teens believes they are the most important people on earth and they want products that speak out for their generation. It’s all about them. They influence Music, Movies, TV Shows and Clothing and believe each has to speak directly to them and for them. Imagine being 15 in the late 90s, you’re walking in your favourite mall, trying to be as cool as can be, heading for your favourite clothing store. All of a sudden, you look up and your favourite clothing brand is now flanked by BABY GAP on one side and GAP MATERNITY on the other side. How could this brand speak for the teen generation, when your 2 year old nephews or your pregnant Aunt are wearing the same clothes you’re wearing?  GAP also forgot about feeding that desire for leading edge, trendy clothing–the whole reason for that “8 seasons” rotation of inventory.  Go into a GAP store this year, and you’ll realize how boring and drab the products have become.  In terms of the LOVE CURVE, GAP Clothing has slid from the BELOVED status to Like It all the way down to INDIFFERENT. No teenager today likes GAP. They don’t even care. Are you kidding me? Duh.

GAP is so confused as to what to do next. So what do brands do when they are confused? Well, they should look themselves right in the mirror, challenge themselves at the executive leadership team to address the issues directly with an honest assessment and a high willingness to change. That’s the ideal. Instead GAP did what a lot of brands do:  they changed their logo. Oh god!!! The logo change only lasted one week–such uproar that they pulled it so fast, no one really saw it.  So what did they do next? They closed 200 stores. Very strategic. Bu-bye GAP. Say hello to Benneton, Wranglers and Doc Martins  when you get to the obsolete stage.