Wednesday, February 19, 2014

Top 10 trends for 2014 - trend # 8 - Maturing of brands

It would be impossible to count the times we have all heard advisers tout the need for us to build a "brand" for ourselves and our companies.  The efforts to do that over the years have been intense and expensive, and largely failures.

This, after all, is the Age of Advertising.  I find ads that appeared in old newspapers and magazines to be quaint.  Perhaps they are innocent.  All they seem to want to do is let you know that a new snake oil mixture is available, or some new durable boots.  Those were not ads so much as public notices.

But in this Age, it is often hard to even know what is being advertised.  We see elaborate ads on TV that finally sneak in a product name at the end.  It is as if there is some shame in being so crass and commercial as to disturb our fantasies by showing a name.  Of course, these way-out ads are usually for products that aim to dip into our deepest desires and dreams.  A soap ad comes right out and says what it needs to.  Not so for super luxury categories.

So how did we get here?  Advertising of brands had the desired effects in the dawn of this Age, going back to the '50's.  Coke, Chanel and Cadillac became embedded in our minds as tastes, scents and status, not just words.  The persistence and strength of those images is impressive, though Cadillac had to come back from the edge of extinction to do it.

Over the years, the number of brands being promoted has become a flood.  So big a flood, that we are becoming numb to their messages - if there is one.  The connection between a brand and success has become tenuous.  We all know how Apple, Tiffany and Zales have strong brand identity with the public.  But Apple and Tiffany were near bankruptcy not that many years ago.  And Zales, which has not been able to find its footing for many years, has just been bought by Sterling, and at a price that would have been laughable, on a per store cost, 30 years ago.

In jewelry and watches, big conglomerates have been created by buying established brands.  The global brands do not even attempt to create a new brand.  The cost and the likelihood of failure is simply too great.

A person in the perfume business once described to me how that works.  New brands (labels, actually) are constantly concocted, heavily advertised and promoted.  If it works, even if only for a few years, great.  If not, the line goes quickly to discounters and mass marketers who run it out at much lower prices until it is gone.  That is only possible in a product where the public expects to pay very high prices for a fancy bottle and 50 cents worth of content.  Extremely low material costs, and very high margins.  Exactly the opposite of jewelry.

If we want to see a replay of the boom in brands in the West, we only need to see what has happened in China and other Asian countries.  A new, brand-rabid middle class wanting to demonstrate status and being "in."  Superb marketing, honed over the last decades is doing the job.


Maturing of brands.  I am not being cynical at all about this.  An impoverished Chinese farmer works very hard just to get a bowl of rice on the family table.  But that farmer has not set aside the normal human urge to find some rewards in life.  Living close to the earth does have its rewards for many people all over the planet.  But for those grinding out a life in crowded cities and noisy, dirty factories, personal rewards become very real.  Especially when they can see those rewards displayed every day in the lives of others around them.  As jaded as many of us might be, we still love the feel of wearing of a beautifully made garment or piece of jewelry.

Cities are where the overwhelming majority of the world's peoples will continue to live.  I live in New York and never see the Milky Way, snow-capped mountains, or prairies the reach to the horizon.  The closest I get to Mother Earth most of the time is a stroll in Central Park.  I do love the city, warts and all, but touches of luxury well-done never hurts.  Nor does a trek to exotic locations.

Brands today want to do that.  Somehow to give us a psychic lift, a smile on our faces.  Does a new I-Phone give us a spiritual lift?  Maybe, or maybe it's just the possession of a marvelous creation that we can shape to our needs, that answers our questions and links to our communities.

Jewelry branding has a checkered and diverse history.  In the US, retailers have been the brands, whether local or national.  On both scales there have been many great successes, but local stores have had almost no success in extending their brand beyond their local markets.  In Italy, by contrast, the brands have been the designers and manufacturers.  Stores are notable by which designer brands they carry, rather than their own name, though local reputation is always important. 

As for building brands in the US, we have noted (in prior blogs this week) the big successes of a few, amidst many efforts that have gone nowhere.

Jewelry branding confronts real barriers.  Products are rarely sold in high volumes (a prerequisite for broad promotion); they are easily copied (usually with the intent of undercutting price); the choices are endless (unlike any other luxury item one can think of); and most cannot be recognized across a room (unlike a handbag).  There are many other distinctions which I could note.

We all know this, but the issue is that fine jewelry is a product that does not lend itself easily to branding.  The public has become very tired of the volume of brands thrown at us.  But the public also immediately recognizes the value of something very new and imaginative, with an easily recognized benefit.  Think Go-Pro cameras.  Or, as I reviewed this week, Pandora, Alex and Ani, etc.

We have become good at spotting honesty and genuine talent.  A brand can no longer be a name without a real creative talent or skill behind it.  Cutting diamonds to ideal proportions is no longer a big deal - everybody does it in better qualities.  But being a designer that consistently grows a style and look does work.  You do not have to be big, you just have to be very good.  We will all benefit if that becomes the rule.

I recall a conversation I had with a successful retailer years ago.  I asked him this question.  If I brought him a fantastic piece of jewelry, or a good idea, which would he take.  He did not hesitate.  He said the good idea.  He was buried in great product, but good ideas are hard to come by.

Building a real brand is hard to come by.  And the public is now completely unimpressed with mediocrity.

Please note:  If you are interested in seeing the subjects covered in these 10 days of trends, you might be interested in a full-day seminar being tentatively planned for later this year in New York.  We will expand the discussion, cover other issues, and include options for the future.  I would be happy to hear your thoughts.  Comment here or e-mail at benj@janosconsultants.com.  Thanks!

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