Monday, December 14, 2015

Encountering Truth versus Attempting To Resurrect A Declining Mature Brand

I remember the day when Woolworth announced that they were closing down. 

As a young kid, my parents used to take me to the Woolworth located in Willoughby, Ohio to see what toys I wanted for Christmas. 

I also remember going over to the store and picking out whatever candies I wanted with the quarter my parents would give me.

In the late 1990s, Woolworth went out of business. Woolworth was once the only alternative to the department and catalogue stores.

By then Target, Kmart and Walmart had redefined the five and dime marketplace.

This past weekend, the Wall Street Journal wrote about two corporations that are in the process of plotting out how to survive from a similar impending decline.

One of those corporations is Yum Brands. The other corporation is Wal-Mart.

Corporations and marketing today is all geared around capitalizing on trends, diversifying and growing fast. 

It’s what Wall Street fosters and reinforces.  Its what executive management uses to drive their own personal portfolios and early retirement expectations.

But whether their management teams are willing to admit it, there are brands that have matured and operate today in the midst of very, very dated operational environments. 

One of those brands is Yum Brands. 

This corporation is not radically different than many of its aging peers like McDonalds, Burger King and Dairy Queen.

Yum Brands owns KFC, Taco Bell and Pizza Hut. 

The article highlights management “refocusing” on its brands with “new product development and digital expansion.”  Yum Brands management talks about the great success the breakfast tacos at Taco Bell.

Over the course of my time in business, I’ve worked with a number of mature brands – brands that have exhausted distribution expansion opportunities and now face declining market share.

Even after the announcement of the corporate priorities and focus, the Yum Brands stock share price continues to decline.
Fast food chick, tacos and pizza are no longer new, novel or different. 

Low cost, tummy fillers are also hard to manage from a cost standpoint let alone government oversight that is out to manage the health welfare of America.

Operational modifications like drive-thrus and 24/7 hours of access are “been there and done that” status.

Not too sure that selling fast food on the Internet is going to remedy the aging decline.

While I do not necessarily quest to visit Arby’s any time soon, I will give its management and marketing team credit because that brand platform has become much more focused and defined around a unique brand experience… Meat… We Have The Meats!

If Yum Brands called EXPERIENCE and asked what to do my advice would be direct.

Simplify your product delivery… model your menu boards after Chipotle in terms of simplicity and focus.

And start exploring the launch of new brands that embrace the next wave of where fast food is today and where it will likely be in 2020.

I already know that advice like that is not received well by the Boomers and GenXers sitting in the corporate towers.

It requires thinking beyond that corporate retirement package.

The other brand is Wal-Mart.

Wal-Mart has been in the news a lot over the last 6 months.  They are facing some rather difficult times ahead as they finally elected to pay their workforce more and re-engineer the layout of the stores. 

As I noted above, mature brands heading into decline embrace operational changes as part of the confrontation with reality process.

The news is that Wal-Mart hired Michael Francis as their new Chief Marketing Officer. 

For readers who do not know who Michael Francis, his bio will quickly give you a perceptual grounding. 

Michael is the marketing guy who helped craft the Target brand in the 90s and early 2000s.  He spent nearly 30 years client-side at Target. 

A lot of the cool stuff that Target is famous for was not bred internally at Target.  Wieden + Kennedy, the agency famous for doing cool stuff for brands like Nike and Apple, drove the cool that empowered Target.

When Michael left Target, he made history by being the marketing guy that attempted to convert JCPenney from a dying brand to a Target-look-alike.

From a sideline viewpoint, the fact that Michael Francis really never worked outside of retail helps to explain his passion – or limited scope. 

He did not explore other contexts of the brand experience.  He really has not even worked with an alternative media environment. 

My bet is that the team that hired Michael Francis at Wal-Mart is also very likely to have recently received a Viagra prescription.

The article quotes a Wal-Mart exec as saying, “If I was working at Target, my heart would sink… knowing that Michael is now working for the competition.”

Okay. Bet that Wal-Mart team already seeing similar ad copy, filming and websites.  They are probably already seeing their Wal-Mart graphic icon that mimics a flower in a similar context as the Target graphic icon.

The same management team at Wal-Mart is further quoted as saying… “Globally, we know growth [of Wal-Mart] will disproportionately come from middle- and upper- income households in the years ahead.”

OMG. Something says that they took a multiple dose of that Viagra!

I do not in any way make a mockery of Wal-Mart. 

In fact, I encourage clients and colleagues alike to once a month get in a car and drive out to a Wal-Mart and walk around.  Watch the shoppers.  Wal-Mart captures the best of what remains of the mass unwashed!

I like to say that if copy is not understood by the folks who shop at Wal-Mart, its not being scripted with the correct words.

If the cost of raising the average pay per employee by a couple of dollars an hour caused Wal-Mart to face Wall Street challenges, can you imagine what the cost of converting the Wal-Mart brand experience into something like Target to net more upper income households will do to the corporate stock value?

I am astounded how Wal-Mart management cannot digest the lessons that many learned by watching JCPenney make an attempt to change the fundamentals of its brand experience.

My bet is we will likely see some management changes at Wal-Mart in the next year as its corporate leadership comes into contact with some fundamental realities. 

If EXPERIENCE was hired to assist Wal-Mart in its marketing, I would very quickly recommend to keep a focus on its online sales and ways in which it can make that consumer “touch-point” more current with where its brand equity audience headset is at in the next several years.

I also think that Wal-Mart has an opportunity to tap “working class” and “first entry into the U.S.” Millennials as they begin to create their own home space and raise families. 

As we are closing out 2015, there are a lot of interesting challenges ahead. 

My advice to those who read the EXPERINCE blog is to get out from behind your desk.  Go out into the marketplace at large to watch, observe and converse with the groups out there that are getting even more diverse in who they are and what they define as their goals and desires.

When Woolworth turned its lights out, it was time to move on. 

In the next couple of years, there will be a host of other brands that need to follow the Woolworth example.