Yes Virginia. There is an Economic Downturn.

Merry Christmas from Main Street!
Greetings from Orlando where I just returned from a walk down Main Street Disney where the snowflakes falling were real and the stores and sidewalks are all crowded with happy people enjoy a clear brisk night filled with parades, music and laughter. Sounds like I’m on the Hallmark Channel. But it’s true. I kept saying “Recession? What Recession?” Watching the thousands of families who paid full price (no weekend specials or lowest prices of the season here) to visit Mickey’s Very Merry Christmas (not Holiday) Party really put my entire family in the right spirit. The next morning a trip to the Marketplace shops in Lake Buena Vista had the same atmosphere without any admission price. The stores were crowded. The restaurants were bustling and provided specialties of the season. . And generally, there was a really good feeling in the streets.

Back at home, the headlines brought me back to reality with the sales reports showing that the holidays were not likely to save the year for the nation’s retailers. However, there are some who continue with their branding efforts and restraints on the “lowest prices of the day” events that seem to be in every day’s newspapers (which by the way aren’t doing so well either.) Wal-Mart has taken its “Save Money. Live Better.” Campaign to the airwaves more aggressively than I have seen in a few years and the messages are on target, friendly and fun. They have become the #1 voice of retail during this season and have overpowered the overwhelming amount of print from stores like Penney’s and Kohl’s and their sales trend shows it’s working The store experience is vastly improved with strong merchandising and displays highlighting the low prices instead of being hidden by the “50% Off” and 70% Clearance” banners that I see in most department stores.

Best Buy, while recently announcing cuts in labor to offset a severe drop in profits, has also been aggressive on the air with real associates talking about real savings for the customers as well as the excitement of selling the latest and greatest in electronics. The stores are bustling with a lot of people who are avoiding the Circuit City across the street like there’s a plague set in. There is. It’s called Chapter 11. Even ToysRUs has gone back to basics with its messages that assure you that they have the right toy for every kid on our list. Costco doesn’t need to advertise to make shopping an exciting event for their loyal—and I mean loyal—customers who know this is the place for everything from Sony Bravia’s to Sterling Cabernets and they continue to do it well. Sam’s Club once again had the best looking print ad insert in Thanksgiving Day’s paper with dramatic photography, understated prices (the price points were great however), and like Costco they provide a celebration in sales in more customer friendly layouts.

You also have to give Macy’s credit for trying to get back to the thought that Macy’s is Christmas shopping to many of us and has been for many years. Reviving the famous “Yes Virginia, there is a Santa Claus” editorial from many years ago, Macy’s ran a great anthology spot showing how Macy’s has been a part of our lives and show business for decades. The event to get children to write a letter to Santa with their Christmas wishes and thereby making a donation to the Make A Wish foundation was the kind of things that made department stores an important part of our holiday traditions for years. Unfortunately, they no longer have that special-ness that drove their success. Macy’s results have been disappointing, but their effort is truly noteworthy. Even the spot with Martha, Michael, P Diddy et al, didn’t ruin their campaign to make us wish there were more quality marketing programs this time of year.

So before reality sets in, my hope is that the retail world will get back to doing truly breakthrough marketing in the year to come and that our new leadership in the nation’s capital will bring us hope and optimism that’s needed more than ever.
Merry Christmas
Ken

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BASEBALL, BRANDING AND THE ECONOMY

Ken Banks Blog Intro 10-08

Press LInk above now to view the 90 second welcome from "Joe Maddon".

It’s a good thing that the World Series this year is providing a lot of interest for those of us here in the Tampa Bay area (and Philadelphia). It helps offset the sense of depression that one can’t avoid after reading the newspaper or watching the news or financial reports on television every day for the past several weeks. If the news in the financial and banking industry isn’t depressing enough (fueled by the ongoing “doom and gloom” headlines), the diagnosis of the retail industry definitely calls for a bleak holiday sales period this year for sure. With the news of Circuit City’s closing of 140 stores to avoid a bankruptcy which seem inevitable now, liquidation of Linens ‘n Things and Sharper Image, as well as the closing and consolidation of Albertson’s stores around the country, there’s good reason to expect that more retailers will disappear before they can start their after-Christmas sales and clearances.

The headline recently that “Big Discounts Fail to Lure Shoppers” in the Wall Street Journal confirms that it take a lot more than just another sale or lowest prices of the season to convince customers to spend their time and money at stores that just don’t do a good job of creating an ongoing relationship with their customers. Just as we saw that the multi-million dollar payrolls of the Yankees, Tigers, and others failed to get them into playoff contention, stores that feel they can only run more sale ads and more promotions don’t win over many customers in good times much less in a recessionary economy.

Granted we should expect sales across the board to slump, but it’s interesting that on the same day that Circuit City made its bleak announcement, I was in a Best Buy across the street and it was not only crowded, it was buzzing with customers throughout the store and at the registers. Costco doesn’t seem to have much problem with the economy. Even Wal-Mart, while experience less than stellar increases, is still reporting a positive sales trend on top a turnaround trend last fall. Publix food stores have gotten more aggressive with BOGO pricing and expanding its own brands, but it’s loyalty among customers has them spending more than last year on an ongoing basis. Walgreen’s is as aggressive as ever with it’s sales circulars, but it’s aggressive growth continues as it offers programs like flu shots and in-store clinics to keep the customers coming back every week.

What’s the difference? You got it, Joe. It’s branding. These stores continue to strengthen their brands with the customer and with their associates and then market themselves in a way that keeps their relationships strong. The history after the 9/11 tragedy showed that stores with the strongest brands continue to succeed in hard times. The history after the collapse of Bears, Lehman, and AIG will likely be the same. It’s time for some positive news--like the Rays and like the stores who succeed by building their brands every day

BRANDING AMERICA--THAT'S MY VOTE

Press Play>> to view a 40 second welcome message from Ken at Gore Creek in Vail, CO.

GOD BLESS AMERICA—THE BRAND!

Recently, I attended a conference in New York where Steve Forbes gave one of the keynote presentations. As a publisher, journalist and former presidential candidate, Steve was certainly qualified to give a timely address to over 3000 professional speakers and associates.

I won’t go into the details of his presentation here, but it became very obvious to me that as a country and as a government, the US has done a poor job of branding itself both within our borders and internationally. Some of the facts that Forbes shared about the economy and some of the simplistic ideas that he shared (like a flat tax) seemed so important and so relevant to the problems we are facing in our country (and the world), it’s amazing that I haven’t heard or seen any reference to these key issues from either of our candidates as we get closer to the November elections. In fact, it seems that if you were to ask a typical citizen about what the “brand” (i.e. what differentiates him from the others) of our current candidates, you’d expect to hear that one is “the candidate who happens to be African American” or the other is “the candidate who happens to have been a prisoner of war in Vietnam”. Now, both of these descriptors are important factors but does either of them qualify the person to be President of this country? Not if the brand is defined as the qualities and experience that are the basis for an enduring relationship with your customer (or in this case, the voter.)

So, the analogies of comparing the brand within a company and the brand of our government and country have many similarities. It would do our candidates well to learn a lesson from successful businesses who have dedicated and enthusiastic employees and loyal and supportive customers because they have done a better job of branding than their competitors. First, the President must be the brand champion—leading the country and setting an example of the strong and consistent leadership that brings more consensus within our legislature and develops a positive morale among the people. Brand building is one of the most important forms of leadership in a company and it certainly holds true in leading our nation.

Brand America needs to be consistent with the people and it needs to be communicated to them frequently and honestly. Only by developing trust can our leaders maintain loyalty and support for their programs and policies. Brand America also has to be strong and consistent with our enemies. Just as the strongest brands gain market share from their competition, our country needs to be positioned as a positive alternative to those nations and groups who don’t agree with our policies and way of life. Like a branded product, the way to maintain market share and a preferred position is emphasize our strengths and not try to chase the competition but rather set the example in order to be the preferred choice.

Brand America must also be trusted and respected by our friends and allies. Just as strong brands lead their categories and industries not only among their customers, they also work with their “competitors’ the industry to improve standards and quality through trade organizations and mutual cooperation while maintaining their own identity in the marketplace.

It sounds simplistic, but the principles of branding surely would be a lot more effective than the partisan name calling and accusations that seem to be the only marketing methods that today’s candidates seem to know for their millions of advertising dollars.
Why not build a following by stressing the positives of the candidate and his policies?
Why not build a campaign based on the facts rather than innuendo?
Why not seek changes for the weakness and build our strength from the policy of change—rather than simply promise change for change sake? In other words, why not build—or rebuild—the branding of our country to a well-respected society that fosters positive relationships here and abroad?

Just as it is imperative for an organization to live up to the brand every day in everything for which they are responsible, it is time to set the goal of building the brand of America with its people through strong communication, honest, effective leadership, and consistent, forward-thinking policies.

People want brands they can trust more than ever today. Should we expect anything less from our nation’s leadership?



WHAT’S IN A NAME??
After 10 years of suffering with the worst team in the major leagues, we baseball fans in the Tampa Bay area are enjoying the biggest turnaround in baseball history as the Rays close in on an American East Division Title this week. When the new owners took over a couple years ago they promised a new look and attitude—A NEW BRAND—that started by changing the name from the
Devil Rays (I never even heard of a devil ray around the waters here.) to simply The Rays. Just proof again that if you get the evil connotations out of your brand, you are more likely to be successful. GO RAYS.

CREATING YOUR OWN BRAND PERSONALITY

Push the play>> arrow to view the short video welcome message from Utah.



Another summer day, another issue of the Wall Street Journal, another dismal headline:
“Vacancies Rise at Retail Centers”.
The ICSC is predicting that 6500 stores will close this year, with vacancies going up to 6.3% for the second quarter. I have to admit that after years of hearing how “over-stored” the country was, perhaps we will lose some of the sameness that has made mall shopping about as exciting as a baseball game these days (even though our Rays are currently in first place!). Frankly, there are a lot of retailers who shouldn’t be around anymore since they provide no real reason for being and--more importantly—no reason for anyone to shop their stores. Just as a forest fire cleans out the woods so that new growth comes back healthier and fuller than before, perhaps our retail scene will cleanse itself of many stores who just take up space in the shopping centers and on downtown streets.

However, despite all the recent depressing news, there are some stores who continue to excel and grow successfully. One chain that continues to break the mold is Coach. I’ve been using them as an excellent example of retail branding at its best for a number of years now, and they continue to differentiate themselves from the other department and specialty retailers in the marketplace. The reason, I believe, is that Coach—with CEO Lew Frankfort leading the way—has maintained its own distinct personality. Let’s face it, there isn’t much news in another leather bag. But Coach somehow keeps its customers—old and new—excited about buying this important accessory even when there is less cash to actually put into the purse or wallet. Having had consistent growth on average of 51% the past five years, Coach has seen its trends slow down to about 11% in net income. A dramatic slowdown, but still impressive when compared to the other stores in our retail world. Despite this, the company continues with aggressive expansion internationally (especially in China) and in its product lines and assortment.

In a time when everyone seems to think that only the discounters are doing well, Coach breaks the mold. Their merchandise is expensive, but they appeal to customers at a number of economic levels with a brand that means quality and prestige, but isn’t out of reach. As Frankfort says, there are many markets, many shopping centers with customers who have never experienced Coach and their goal is to go after these markets with strong branding and new lines that maintain the panache and heritage of the brand.

In short, Coach has maintained its distinctive personality and continues to stress innovation during a time when many stores just try to keep their heads above the waters of recession.

Sure there are others, like Costco, Walmart (yes, Walmart) and Saks who also are maintaining their distinct personality while they continue to grow their brand through effective marketing. I can hear the 50’s singer, Lloyd Price, crooning now the virtues of
“You’ve got Personality—walk, talk, smile with Personality.” It’s all about branding and creating your distinctive place for customers to shop no matter how bad the economy may be.

Making it MY STORE make it MY BRAND

Press Play >> now to view the 60 second video message from Ken.
Going Local. What a Novel Idea?

So, after facing a 2% overall sales decline last year, Macy’s has decided that all customers are not the same. Gee, I thought the same people shopped Herald Square as those who shop Dadeland in Miami or Fashion Square in Santa Monica??? There’s no doubt that Macy’s was--and is--one of the great Brands in retail. Its history and fame are unlike any other department store chain except it’s sister store Bloomingdales. The move to consolidate all of the department store brands by Federated a few years ago made perfect sense from not only the CFO’s point of view, but also for many customers as well. The efficiencies of marketing one brand nationwide with a singular voice and message promised to bring about some of the best marketing in the industry.

Now, we hear that it isn’t working and that a cookie cutter doesn’t fit on State Street in Chicago the same way as on Nicollet Mall in Minneapolis. Nothing new here. Reminds me of my old dress buying days at Hudson’s many moons ago. We knew back then that the key to success was to adjust our inventories and promotions from one branch to another, knowing that the customers who shopped downtown were a lot different than those who shopped at Northland or Pontiac Mall. In their heyday, the key to the success of the department store was their local personality and community commitment. Shopping at the department store was an experience not just a purchase trip. The promotions were unique to the market and the merchandise suited not just the geography but also the psyche of the local citizens. Sears and Penney’s were there, too, but it was the department store that knew its market, its customers and was a special place to shop.

With all of the consolidations in the past couple decades the disappearance of this “specialness” coincides with the poor performance of department stores compared to the discounters and the big box specialty chains. The overstocked racks of apparel topped by too many 75% off clearance signs and the mandatory Liz or Ralph shops, have, in fact, made these stores boring and no longer part of our lives. The brands have disappeared and so have the sales.

Why this is such a mystery that Terry Lundgren and other category CEO’s are just realizing amazes me. The importance of adjusting to the local market (meaning the individual store’s market area) has been identified for years. Walgreen’s realized this a couple decades ago when they made a commitment to developing the systems necessary to be able to adjust inventories by item and sku to meet the needs of the local (for drug stores that may be less than a mile around the store) marketplace. What sells in a downtown Chicago store may not sell as well at a beach store in Clearwater and vice versa. If you have what most of the customers want, you’ll sell more of it (even at regular prices) more often. Keeping the store and operations staff loyal and consistent is another key to why this chain continues to outperform the category by more than double the sales per store. Sure, they still are aggressive weekly sale advertisers, but it’s the every day sales that make a difference to customers who are in the store a few times a week.

I believe the department stores should take a lesson from our friends from Deerfield and also a lesson from their local predecessors who dominated their markets years ago.
 Make the stores special, make the events special, and I think the customers will return. Special is not having the Trumps, Stewarts, or P Diddy’s as spokespersons either.
 Make the message relevant and timely to the customers in each market.
 Make the store My Store and re-develop the relationships that are necessary for this category to survive.
That’s the key to branding today---just like always.

SPEAKING OF RELATIONSHIPS
Strong customer relationships don’t happen by accident. It takes an effective CRM program and a commitment to reaching your target more effectively. To learn how to do this, don’t forget the annual CRMC conference in Chicago on June 11-13 at the Westin River North Hotel. I have reviewed the program and it looks like one of the best since Fred Newell started this important opportunity 14 years ago.
Just go to www.loyalty.vg to learn more
or go to http://www.loyalty.vg/conferences/CRMC2008/CRMC2008_agenda.aspx to view the program.

مرحبا Wal-Mart! Hello Saks! Hey, Honey Baked Ham!

Push Play >> now to view the 90 second intro video from Ken

Despite all of the bad economic news over the past few weeks, I refuse to dwell on the poor performers in the retail world in this post. It’s time we look at some companies who are doing things right,living up to their brand, and having positive sales trends as a result!


Photo courtesy Newsweek magazine.
First, Wal-Mart opened a store in a suburb of my native Detroit (Dearborn) that caters to the largest concentration of Arabs outside of the middle-east. An article in Newsweek details how this store has adjusted its merchandise mix, its store associates, and its marketing efforts to target the nearly half a million Arab-Americans in this city. With over 550 items in stock appealing to this target customer,they realize that the brand must be a "store of the community". It’s a good example that even as big as Wal-Mart is, it’s not just low prices that appeals to today’s shopper. Granted, they have the lowest price perception of any retailer in the market, but Wal-Mart has rectified some the mistakes of the past few years and gone back to building trust first and athen selling a lot of items at better prices as a result. Their new marketing campaigns are a throw-back to the real people with real benefits for shopping the store (Better than a blue light hawking weekly specials, I believe.) Their programs tied in with the Salvation Army and Second Harvest Food Banks continue to build trust.

The economic woes haven’t adversely affected sales at Saks Fifth Avenue either and it’s not because its customers have more money than most. Realizing that shoes are a major driver of traffic (Nordstrom figured that out a long time ago.), Saks didn’t just increase inventory, it: introduced its new shoe dept. with its own zip code 10222-SHOE. The flagship store devoted its entire 8th Floor with 150% more inventory. The result was that shoes was the #1 category increase for the holiday selling period. Management credits the increase for the 10.6% increase overall With Deborah Messing helping to open the new zip code, Saks has re-branded itself and has made a commitment to live up to that brand in all categories. See http://ny1.com/ny1/content/index for a ‘news’ report covering the launch.

Finally, many people only think about Honey Baked Ham as a great piece of meat. You might be surprised to learn that they do a heckuva retail business too and sell more than just hams--especially at the holidays with Easter leading the way. I was there using a Christmas (Yes, I always save it for later use.) gift certificate for our Easter ham and was impressed not only with the system and logistics of moving over a hundred people through the line but also with the complimentary sales of side dishes, desserts and condiments. The power of this brand resulted in a line up at 9am on the Saturday before Easter that was not unlike the Starbucks queue for a $4 buck cup at the airport when there is no line for the $1.50/cup of joe right across the aisle. Honey Baked charges almost three times per pound as the Sam’s Club or Costco down the street. Quality product backed by a consistent, believable marketing campaign results in brand loyalty all year round.

So, while some stores blame their negative trends on the poor economy and the real estate rollercoaster and weakening dollar, etc…stores like these continue to build their brands and their sales and we know how.

Greetings from Chicago

Click play >> to view the 40 second welcome video for this month.

BECOME A BRAND CHAMPION! START HERE ON APRIL 10-12.

I am inspired after being in Chicago for 3 days and am more convinced than ever that successful brands have to work consistently and passionately to make sure their brands come alive within the organization and within the customers – we have to “Make it Stick”.

One of the first critical steps in developing a brand strategy that “sticks’ is to establish a “brand strategy committee” within your organization. It is crucial to have every area represented if it’s going to work – aka “stick”. Pull someone from R&D, HR, Operations, Merchandising as well as the good ‘ol marketing dept, etc.. This committee will require strong leadership and a “brand champion”—to make sure that everyone participates and buys into the strategy and to insure its implementation.

That’s why I am so excited that this spring’s Global Retail Marketing’s Global Retail Marketing Executive Leadership Summit which will be held just down the water from my office in St. Pete Beach. Chief Executive Offer Stephanie Fischer and the GRM team have put together a program that looks at leadership from every perspective and brings to the stage some outstanding experts that will surely enlighten even the most senior marketing executive. To encourage you and your organization to participate, here are some highlights: (OK, yes, I’m a special advisor to GRM, but this program really excites me and I am devoting this article to it!)t

 Start off with Carter Drew who brings his experience at McDonald’s (not a bad brand!) He will share his views on “Authentic Leadership” which will dive into what it takes to develop a vision that’s essential to a strong brand.
 Next, we have all heard about “Blue Ocean Strategy” and Gabor Burt. Gabor, the foremost expert on this hot process, will help any marketer who wants to get a leg up on the competition see how its done in today’s marketplace. His examples will demonstrate how to get the strategy into action.
 The next day will keep the attendees focused on making the strategy work with presentations by experts like Gary Hamel, who Fortune calls the world’s leading expert on business strategy. Gary looks at leadership a being the head of a revolution and we certainly need some revolutionary thinking to get our brands to stand out.
 Following Gary is Peter McLaughlin who will bring this whole idea to heart by talking about how we can ignite the energy of our marketing internally and make us better champions of our brand. It’s not all strategy as you know and the bottom line is always a prevailing consideration.
 That’s why Joel Makower will show how the new “greening of our business and marketing” can be profitable if you do it right. Nobody can talk about the right way to make “Green” exciting and profitable for a brand like Joel, He has written more than a dozen books and several articles that make a difference to who?.

 Finally, I am glad to see Dan Burrus is bringing his futuristic, yet common sense, approach to technology trends back to this summit. Last year, I was truly inspired by his ideas and concepts that got everyone involved and excited about the future—if you do it right and look at the marketplace. Even after seeing Dan again at the NSA Convention in July, I am amazed at his wealth of knowledge and ability to cut through the confusion in technology to inspire us to think differently about our brands and our customers.

Top all this off with ample opportunities to network with our marketing counterparts from other retailers and key marketers from some of best partner companies out there, it will be an extraordinary event. GRM has a long history of bring people together to share ideas and build new relationships that pay off back at the office and this year looks like it will be even better.

The setting ain’t so bad either with the beautiful and historic Don CeSar Hotel providing the meeting location and amenities. Golf and boat cruises in the Gulf are a great way to enjoy the time away while you stimulate your thinking and become a true brand champion for your company.

I know this sounds like a sales pitch—and it is. I believe so strongly in the need for strategy leadership in in order to bring brands to life. I am convinced that this is a great opportunity that warrants your time and effort to attend. On top of that, if you’re a retail marketing executive, there’s no charge for the summit. Just take the time to get on a plane (or boat in my case) to Tampa Bay then spend some of the best 3 days in your branding quest. It’s April 10 thru April 12, and spend the weekend if you can. I guarantee it will be sunny and warm!

Just click on the link to the right, or go to www.globalretailmarketing.com. See you there.
Ken

News From New York

Click play >> to view this month's video welcome(47 seconds) from NYC
The annual NRF convention at the Javitz Center was abuzz with new technology that will make running a retail organization more efficient with state-of-the-art systems and programs. The exhibits floor was full of representatives and retailers and as many high tech sounding names. Hopefully, these innovations will save the companies enough money to offset the loss of revenue most stores experienced in the past couple months of holiday sales.. With a lousy December (-0.4%) and an overall disappointing two-month holiday period (3% vs. a prediction of +4%), there were many reasons given for the poor performance in the trade articles that followed today’s release of December figures. The old stand-by “bad weather” and over-used “tentative consumer” were cited most often. Nobody, however, said that their marketing efforts were off the mark.

I won’t dwell on that again in fear of sounding redundant from last month’s article. However, it was interesting that most of the program at this year’s convention failed to address the key issues of marketing and branding. About the only sign of the “B-Word” was on one of the displays at the NRF bookstore where 4-5 books promised the key to better branding. (Unfortunately, my book isn’t quite finished in time to hit the shelves!) In talking with several of my retail counterparts at the convention, we all were in agreement that this year’s holiday marketing efforts were about as exciting as the 30 re-runs of the clay-mation version of “Rudolf the Red Nosed Reindeer”. It just seemed that those who did advertise had nothing to say other than another “lowest prices” sale in ads that looked so similar; one had to yawn whenever we opened the daily newspaper (those of us who still get the paper, that is.),

Looking for answers, maybe these disappointed retailers should have been sitting in church with me when our pastor used a quote that seemed to “hit the nail on the head” -
“The bitterness of poor quality lingers on long after the sweetness of a cheap price fades away.” Sure, we all have to have a great price image to survive in today’s marketplace. However, whatever happened to giving customers a really great shopping experience (especially at the holidays)? With lousy service, jam-packed clearance round racks, and with advertising that seemed dull and redundant, retailers have lost the value part of the proposition. It’s interesting to look at the December comp’s, that the ones with the worst performance were also the ones with the dullest advertising and store presentation. I won’t list them here, but the December results are available online so you’ll know who I mean.

It’s interesting that Wal-Mart broke with some really good ads that communicated their value statement while at the same time they broke with blockbuster pricing. The turnaround in sales also reflected a much better shopping experience in the remodeled stores that I visited. Costco’s results continue to be amazing in view of their lack of any advertising. The store experience says it all. Flat screen TV’s were the hot items and these stores had displays that rivaled the big electronics stores and were a lot less confusing to shop.

Macy’s announced that while it now had its logo on hundreds of stores in every market (which produce lousy sales), they were expanding their San Francisco web offices due to increases in their online business. The amount of gift card sales only punctuates our customers’ lack of enthusiasm to shop for actual gifts and other traditional holiday items.

The time to start building Holiday 2008 sales is now. Stores need to take a look at their marketing efforts and research their brand position and start NOW to provide a reason for customers to shop them now and on an ongoing basis. It’s the only way to build a better business all year.

RAC CHICAGO---A GOOD PLACE TO START.
To get inspired and re-energize your branding efforts, start out by attending this year’s Retail Advertising Conference in Chicago on February 6-8. The program promises to be one of the best in helping you make your marketing message “stick” with your customers. Click this link to get all the information about this year’s program and registration.