MARCH MADNESS AND OTHER BIG SALE EVENTS

As we wind down from the Sweet Sixteen, Elite Eight to the Final Four, another great sales promotion season winds down to an exciting finale. I was wondering what retailers did for a sale event before the NCAA and the television networks decided to make the college basketball tournament a national reason for yet another series of sales and promotions called March Madness. I guess they were Easter Sales back then when it was politically correct to tie in with a religious holiday (even though the bunnies and chocolate eggs had no religious symbolism at all.)

But here we are with Buick being the official car of March Madness and retailers in every category are trying to capitalize on a basketball tournament to drive people into their stores. As if any store really has a “shot from downtown” to convince a customer to make a trip to the store for “just another store.”

It’s interesting that none of the big box schools who were favored to win it all this year are no longer in the big show. Not so in the retail world where the best brands continue to do well and don’t need to rely on another fake sale to make their numbers. Case in point: Home Depot and Lowe’s. An article in the St. Petersburg Times, asks “who’s your home team?” The article compared the two giant home improvement retailers. Sure, they do a lot of the same things from the size of their stores and offerings to the competitive NASCAR teams that each sponsor. Some say the only difference is that one is orange and the other is blue (Go Gators!). But the article (and the customers) explain that there are a lot more differences that the color of the aprons. Lowe’s developed a brand strategy long that recognized that women were as important –if not more important—in the buying decisions for home improvement than their male counterparts. With an expanded commitment to appliances, a more comfortable environment, and targeted communications, Lowe’s gradually has eaten into Home Depot’s dominant market share and now does just slightly under the sales-per-store volume ($37.7MM vs. $40MM for Home Depot). Both retailers have been outstanding examples of brand strategy and execution- although Home Depot took its eye off the ball in terms of customer service a few years ago thus giving Lowe’s an opportunity to scoop up some share of market. Now Home Depot has recognized the importance of the female customer and is back on track to the tune of $81.5 Billion in sales annually.

Does that mean it’s really down to the Final Two in this retail tournament? What about Ace Hardware, Sherwin Williams, and others? Well, they certainly can’t compete in size, but they can provide the kind of personal customer service and convenience that the big boxes can’t. There’s a reason why chain drug stores prosper even though the Wal-Mart’s ,Target’s and Costo’s sell everything they have for less. It’s called a brand strategy that provides personal service and convenience. If the smaller hardware and home improvement specialists focus on their niche and don’t get caught up in the March Madness of another sale event, they can prosper. Then again, there’s George Mason U.. Who’d a thunk it??
Ken

PS – GO GATORS

Super Bowl Spots…. and The Problems with Ford & GM

Over the past several days, there has been a lot of conversation about this year’s round of Super Bowl Commercials and whether they were worth the $2.4 Million price tag for the mere thirty seconds of air time. Frankly, I thought that this year’s crop fared better than the past couple years and actually were much better in terms of excitement and surprise than the game itself (I’m sure there are some Steelers fans who would disagree).
One of the things that struck me, however, was seeing the Ford Field signs throughout the coverage over the two weeks leading up to the game. I’m sure Ford must have felt proud that they spend the mega-millions in stadium naming fees when they saw all of the coverage. Just as they do when they watched Phil Mickelson in the FBR Open from Phoenix as he sported the Ford logo on his shirt even if he didn’t fare so well on the final 18 holes. I’m sure that GM must be proud of its title sponsorship of the Buick Opens (how many are there, anyway?)
You can’t help but wonder if these “product placements” could offset the recent bad news out of Detroit for both of these major car companies. Both announced major cutbacks and plant closing to “revitalize” these companies and their automotive brands. Do they really need the heightened awareness of seeing their names at these sporting events when Toyota has now taken over the lead as America’s most popular car brand?

Seems to me that the money would be better spent convincing consumers that the Fords and Chevy’s and Buicks are worth more consideration for their auto purchases by giving some rationale as to why their cars are really good machines with great styling and great performance. I think it’s called branding. But, No, the auto marketers would rather see their money go after sponsorships and awareness - building exposure that makes them feel good, but thenleaves the car buyer opting for more Asian manufactured cars. I was dismayed to hear that Ford had decided to discontinue making the renewed Thunderbird a few months ago. Not long after it was named car of the year, the company cut back on marketing funds and left it up to the dealers to sell the cars. Meanwhile, Toyota and Lexus (Hyundai and Kia as well) consistently give us a reason to buy their cars beyond another Factory Incentive or Rebate. People stopped buying the T-Birds and now they will go the way of the Taurus and Oldsmobiles. Stick to reinforcing the brand and maybe you’ll sell more Fords.

Which brings us back to the issue of retail branding at the store. Once again the companies cut back on their branding messages and leave it up to the salespeople who still think that selling cars is the same as it was in the ‘50’s and ‘60’s by offering rebates and saying “what will it take for me to get you to deal today?” The companies need to sell more reasons to buy the car and then train their showroom personnel to help the consumer get the right car—not just sell them. It’s another retail branding problem that can’t be fixed with another employee pricing promotion ,factory incentive or $2.4 M commercial. It’s building a relationship with the customer day in day out.

RANDY CURTIS
I just got back to my office and learned that a good friend and colleague, Randy Curtis had passed away suddenly yesterday. Randy was one of my frequent commentators on this blog and a real retail marketing professional. He was the creative spark behind the successful Wal-Mart campaigns over the past several years before, like me, he decided to share his knowledge with more retailers as a consultant. I just met with Randy last Friday at the Retail Advertising Conference in Chicago, where we had shared some great conversation and committed to each other that we would work together soon on a project or two. The thought of joining forces was invigorating and exciting for me. He was a great guy, a big supporter of RAMA, and a great family man . I will miss him

Start Spreading the News……..

I was talking recently with a senior marketing executive with one of the country’s top retail chains about an upcoming presentation that I was scheduled to give in San Antonio (see photo above). During the course of our discussion, I asked her if she had given any presentations lately and her response was that “Absolutely not. Our company has a firm policy which prohibits executives making any speeches or participating in any discussions about the company’s plans or activities.” The rationale was that all this did was give the competitor’s more information than they should have. Having done a lot of speeches in my retail days, I was surprised since I always felt there may be a potential investor and certainly potential customers in the audience and that the information was always limited to facts that any good competitor would have been aware of if they were monitoring the marketplace on a regular basis.

Unfortunately, in their quest to preserve confidentiality, many stores don’t restrict their communications only to the public or the trade. Often, they are very closed-mouth to their own employees. Shelley Broader, President/COO of SweetBay/Kash ‘n Karry Markets in Florida, recently spoke to a group of executives in Tampa Bay. In that presentation, she touted the fact that the company—which is in the midst of a major re-branding effort—is extremely open and “shares every bit of legally available information she can with the press, colleagues and the competition.” She said: “ What’s more dangerous? My competition knowing my plan or my 10,000 employees NOT knowing my plan?”

Amen, Shelley! Unfortunately, so many companies, especially retailers, spend millions of dollars and countless hours, developing a communications plan to insure that their customers understand their brand strategy. Then, they spend barely nothing more than a video or memo to explain it (usually only once) to their employees in the field. No wonder the customers are often disappointed when they visit the store and find that it’s the same as it always has been or not as what they expected from the advertising that they saw, which enticed them to visit the store. Stores must be diligent about having a comprehensive and ongoing communications plan about the brand strategy to insure that the employees, especially at store level, live up to the brand every day.

A few years ago, I was in Kmart to get a fishing license for my annual bass fishing outing (Kmart was the only place nearby that sold them at the time, and as usual, I left this important task until the night before I was supposed to leave for the river.) Anyway, at the time Kmart was spending millions re-introducing itself at Big Kmart and spending millions on ads with even the late Bob Hope appearing in one of the TV spots. While waiting for my license to be filled out, the salespeople (Ann and Myrt—two 60 -year olds who certainly didn’t seem to be experts on any sporting goods, much less a fishing license) were conversing back and forth. So I asked them what they thought of the new “Big Kmart” that they worked for. They looked at each other wondering what I was talking about. Then Myrt said: “I don’t know. Pretty much the same old, same old, right Ann? Oh, we did get a new sign outside and some new badges.” That was it. No wonder the re-branding was so successful! The marketing dollars were all wasted and the Wal-Mart down the street continued to gain market share. To live up to the brand, employees have got to know what that brand means to them and to their customers.

What do you think? Happy New Year.

Ken