This year marks the 12^th year that I have been sharing views on branding, marketing, retailing, internet…and whatever else pops into my head as I scan the American marketplace for successful ideas on winning more loyal customers. During these years, I’ve talked about a lot of different types of businesses. Some are real success stories. Some have failed and have disappeared from view—never to be shopped or purchased again. Most of the time, I feature brand concepts that are communicated via outstanding creative executions that win over the hearts and minds of the customer as much as their wallets. To be sure it is the stories behind the brand strategy that make for memorable marketing and loyal customers.

This month, however, I’m featuring a retailer who has been a real success story, selling stuff that’s not very special, to people who just want what they need for a specific task at a really low price. There are no Addy Award winning campaigns here. Nor are the stores going to win any praises for design or emulation of graphics and displays. Just tools. Let’s take a look at one of my favorite stores—Harbor Freight (see http://harborfreight.com).

No, Harbor Freight isn’t special because yours truly is a great handyman or do-it-yourselfer. I found the store quite by accident when they opened near a Sushi restaurant that I used to visit frequently. I was surprised at how many things they sold that I had no idea what they were used for. Nor was I aware how many sizes and shapes of drill bits existed in this world. The stores are clean, neatly organized, well signed. The merchandise—most of which is private label product from China—is well displayed and designed. The prices–even for one who rarely shops for tools—are obviously deep discounted compared to Sears or Home Depot.

Then, there’s the advertising. Oy! Nothing special here. Except consistency. Always price promotions. Always a 20% discount. Always a free with purchase item or two that just happens to be something that you could really use (like a flashlight, or battery checker, or screwdriver set.   The discounts are real. The sale periods are limited and enforced. The offers are everywhere. In the newspaper every week. In ValPak mailers. In direct mail catalogues. Online. In Parade magazine or tucked into the freestanding inserts. The graphics are not exciting but are consistent with the store. Well organized. Strong pricing statements. Easily understood discounts.

The products are well made and tested in their own quality test labs called The Workshop (https://youtu.be/_xDFCBPQJXs?t=2)The warranties are real and the 100% Satisfaction promise is enforced. Returns are easy. The people are knowledgeable enough that you can find just what you need.

And it all works. Harbor Freight now has over 600 (with a new one opening every 3 days) stores doing over $2 Billion in annual sales. In the process, they have built a brand that may have surpassed in loyalty the Craftsmen brand that led to Sears’ success over the years. I believe the brand has thrived because of the consistency of the message, the stores, and the product every day. Check out their About Us video on their website (after the typical sale ad on the home page) to hear a great example of a brand strategy and how they live up to it every day.

PRESS PLAY >> TO VIEW THIS MONTH’S MESSAGE FROM KEN.

MERRY CHRISTMAS. As we run off the days until Christmas, it seems like the holiday comes earlier and faster every year, and 2015 is no exception. Maybe it’s because there isn’t the significant change in weather down here in Florida so the days tend to be the same as they were in September and July and April. In any event, it’s time to get into the full-court press for us to make sure that we are ready for our favorite holiday. We did get a jump on a few things like the outdoor lights and Santas, setting up the tree and decorations and work on this month’s blog in advance. All done before we took off for a visit to the Christmas markets on the Rhine with stops in four countries and several cities to see how the holiday are celebrated in towns dating back to when Santa was just a young elf. Boy, were we surprised. Christmas is alive and well in Basel, Strasbourg, Mainz, Koblenz and Cologne.

As we explored the various Christmas market festivals in each city, we were taken back into memories of how the holidays felt many years ago. We tried to figure out what made it so special and we came to the conclusion that Christmas in Europe is not just a holiday selling season, but it’s a time of celebration for the entire community and all of the businesses (not just the retailers) go all out to show their celebration of the holiday. No political correctness here. This is Christmas with Nativity scenes, Santa Clauses, angels, and all of the other symbols. But most obvious is the happy faces of the people—whether they were visiting the markets or whether they were working the various businesses. It was a festival atmosphere and yet it was calming (“All is calm…”) and heartwarming. Yes, many of the booths in the Christmas markets sell the same items as those in other cities. Yet, there is enough local flavor to give each one its own personality and style. Sure there were special prices, but it didn’t seem like prices and sales were the key focus. The displays—whether in a small, cold hut or in a centuries-old building were as exciting as any that I’ve seen on Fifth Avenue. The crowds were there on Wednesday morning just like they were most evenings and on the weekends where families, seniors, and youth mingled and enjoyed the atmosphere and the offerings. There were women in burkas, men wearing yarmulkes, priests, and even some tourists! Everyone enjoying the special time of year.

Christmas season surely is the biggest sales period in retail all over the world and as such the brand of this season certainly needs to constantly be refined while sticking to the reasons for the season that make it special. It’s not all about black Friday prices and one-day sales. It’s a celebration and a time for special memories. Standing in line in one of the many Kathe Wohlfahrt Christmas stores (you’ve got to experience one of these!) I had the same feeling that I had each Christmas when my mother would load me and my brothers on the Detroit streetcars to go to Hudson’s Downtown department store. This was not just a shopping trip. It was an excursion into the North Pole and Bethlehem and New York all wrapped up in one. An exciting, memorable time and shopping was just a sidelight to a tradition that I’ll always remember. That’s what the brand of Christmas is all about when it comes to retail. The marketing should reflect this attitude of a special time of year. The stores should dress themselves up more with experience and less on sale signs. The people serving you should be as excited as you are about the season and the experience. The community should continue to make living there extra special at this time and give people a reason to come out and share the experience.

So, if you’re dreading the last few days of the Christmas rush, take a few minutes to think back what made this holiday so special when you were young. Think about the brand of Christmas and why this time of year is not only a time for revenues and promotions, but also a time for experiences and memories. If you’re one of the marketers trying to take advantage of the season, make it special for your customers by going the extra mile to make it a memorable experience. If you’re a customer, enjoy the experience and enjoy your families.

Have a great Christmas and Happy New Year.

Press Play>>> to view Ken’s welcome message for this month.

Happy Thanksgiving. Hope you have a peaceful, family-oriented holiday and have chosen (as I have) to ignore Black Friday. Despite the billions of ad messages for everything from SUV’s to CPU’s with special Black Friday sale prices, I believe this retail phenomenon is fading fast in customer appeal. There are many reasons for it. Mostly that customers have figured out that they can get as good if not better discounts prior to the Friday after Thanksgiving (as we used to call it in my department store days) or almost any day prior to Christmas as just about any store of their choosing. But I think there’s another factor that’s contributing to the demise  as they say in Germany of“Freitag Schwarz” (I’m going to cruise the Rhine next week so I thought I should practice my Deutsch in advance.). That factor is Amazon!

As an article recently in the New York Times pointed out, Amazon is far outpacing its competitors by building a “retail” operation that nobody can effectively compete with, especially at this time of year. Amazon’s stock performance (double in value) this year has outpaced the rest of the market. The big reason is that after years of development and investment in technology and logistics, Amazon works! It struck me as I saw the ads for Macy’s “Believe” campaign which I still think captures the spirit that made department store the Christmas headquarters for shopping several years ago. I also watched the promotions for the Macy’s Thanksgiving Day parade that has been a tradition at our household for viewing for as long as I can remember. What struck me is that I hadn’t been in Macy’s—or any other department store– for at least a year and certainly hadn’t purchased anything at the stores for even longer. However, our family has made at least 50 purchases from Amazon (and Amazon Prime) this year. Everything from swimming pool pumps to water filters to books to videos to shoes to toys…and I could go on. And to top it all off, we had almost all of the items delivered at no cost, to our front door, the next day. And…at prices that beat most Black Friday deals this week.

It’s no surprise why Amazon’s retail sales more than doubled in the last quarter, twice the growth of Wal-Mart who does a far better job of merchandising than all of the department stores put together. Why is this happening? No surprise here either. It’s all about branding. The Amazon brand has gone far beyond the bookstore brand that gave Amazon its beginning several years ago. But the brand goes beyond just expanding what you can buy at Amazon, it’s the way they have developed a relationship with its customers and in the process developed a brand that resonates with so many customers today. That relationship is strengthened by the “personal” communication that out performs even the best of the traditional holiday gift stores. First, with a website that makes it so easy to find what you want, when you want, at a great price. Next with a CRM program called Amazon Prime that for an annual fee of $99 you can get free delivery, usually next day, with one click on your keyboard. You’ll get order status, shipping status, delivery status (even from the USPS), and a liberal return policy just in case you order the wrong size or color. Oh, and the return is just as easy to make.   Want to watch a TV series that you missed on primetime? Prime video makes it easy to watch as simply as Netflix or Apple TV…and it’s usually free to download.   Want to see if other people have purchased this product and were satisfied? Amazon’s customer rating system is comprehensive and validated so well it’s like calling a good friend who bought the product and is ready to recommend or suggest alternate items. I could go on, but these are just a few reasons why Prime now has over 40 million subscribers and growing every day (Black or not) before the holiday shopping season is over.  Click on this linkview a great TV spot for Amazon Prime that really supports the brand.  https://youtu.be/RpW3lfKKxPc

Amazon is a brand that lives up to its promise and exceeds customer expectations at every transaction. It’s communications are more personal than…. well, real persons. And it’s growing in brand preference at lightning speed that will keep the competition far behind for many Black Friday’s to come.

Hope you have a great Thanksgiving and a peaceful Christmas season.

Click on PLAY>>>above to view Ken’s welcome video to this month’s blog..

I just read an article detailing the value of the country’s leading brands indicating that not only is a brand important to the marketing of a product or service but it’s also an important component of the company’s total value on the investment markets. SAB Miller just turned down a $104 Billion offer from Anheuser-Busch in Bev, stating that the offer greatly undervalues the company and attributing its value to the strong brands in its portfolio of beers. As important as the brand is, it’s amazing what some major companies do to jeopardize the strength and even the viability of their brands with some deceitful practices.

This is painfully obvious in the current situation at Volkswagen and Audi where the company purposefully altered the software to deceive the regulators of their emissions control testing. So the CEO of VW has resigned, but the lack of trust will linger with the customers long after he is forgotten. One of the key criteria in building a successful brand is the development of trust with the customer. In this case that their vehicles are not polluting the environment is the end result. More important, however, is the fact that we, as drivers of their vehicles, must have trust in the workmanship and safety of the cars, as a basis for considering a purchase of their brands. While the recent infractions would not likely cause injury or damage to the customer or their vehicle, it certainly deteriorates the TRUST that we place that their car is going to run reliably and more important drive safely on today’s high-speed thoroughfares and in all kinds of weather conditions.

The brand strategy that I have championed for several years requires a company and its associates to “live up to the brand everyday”. Otherwise, all the great marketing and promotions are worthless as purchasers become disgruntled and share their negative experiences with their friends, family and the media. To those who were considering changing brands, these covert actions only convince the customer to stick with their existing brand or go elsewhere to a brand they can trust. Just prior to this scandal, VW became the largest auto producer in the world and it has become that by producing cars (since I owned my first beetle back in the 60’s) that were dependable and a great value.

General Motors was also the largest automaker in the world and it chose to deceive their customers with unsafe airbags and other hidden recalls that nearly made the company go broke just a few years ago. GM had worked hard to build a quality image not only for the company but also for the US auto industry. Instead, it jeopardized its existence and helped companies like VW and Toyota surpass them in revenues and market share.

Car selling for years has been based on deceit with loads of fine print, bait and switch tactics, and high-pressure sales policies at the dealer level. I’m currently being bombarded in the Tampa Bay market with commercials from a new Fuccillo KIA dealer in the area. The dealer’s owner fits the stereotype of your Uncle Billy from Jersey City who yells at the view that his deals and promotions are going to be “Huuuuggggee” along with his partner Caroline whose lines are consistently trampled by Billy while they talk about free trips and electronics to prompt a trip to their dealership. In fairness, they have created quite a media presence in a short period. And, the company owns high-volume dealerships all over the country with Billy’s tried and not-so-true tactics. We’ve grown accustomed to dealers’ tactics like this and that’s why customers dislike the whole auto purchasing experience. Unfortunately, no one trusts the dealer to give them the best deal and to live up to their promises after the sale.

What can we expect? If the parent corporations were lying and deceiving, why wouldn’t their authorized dealerships do the same? The key to building a brand that the customer values is building their trust at the same time. With out trust, the brands will likely underachieve and may soon perish.

Click on PLAY>>>above to view Ken’s welcome video to this month’s blog.

I returned recently from a trip to California and on the drive home, I was surprised to see that our local mall had been reduced to a pile of rubble while we were out of town. There still remained some signs and the main entrance portal but most of it and the adjoining theater had met their match with bulldozers and wrecking balls. Of course, this really didn’t happen in the week that we were away. The mall’s closing started several years ago as store after store began closing and the crowds that used to populate the court and restaurants got smaller and smaller. In the meantime, downtown shopping areas in cities big and small are beginning to thrive thanks to a change in customer attitudes toward shopping in a town center atmosphere where you can park in front of the store and so in or wander up and down the streets as was the custom many years ago.

Easton Town Center, Columbus

I realized recently that in just a five-mile radius of my home three major shopping malls had closed and been torn down in the past 3-4 years. Replaced by power centers where customers can park in front of their destination and get in/out quickly or visit one of the several restaurants (from fine dining to casual) that also drive traffic to the area. The same holds true around the country, where new shopping “centers” like Eaton Town Center in Columbus or Mooresville, NC, attract new stores, restaurants and people every day.   The customers have changed the way they shop. Some might say they have just gotten back to way our parents shopped. Major cities are discovering that rebuilding and refurbishing downtown areas has great appeal to younger shoppers and these have become hubs of activity around the country. Developers and retailers realized this and have profited well in the new (old?) environments. Department stores on the other hand still are tied like “anchors” to the traditional mall locations. No wonder they continue to be challenged.

It all starts with continuing to monitor the customer attitudes and behaviors and adjusting the plans accordingly. These new town centers are a brand within themselves and the customers love the results.   The same holds true in other industries and product categories. Take photo taking for example. The arrival of digital was not unpredicted. Once this category was one of the most profitable in consumer products and services and retailers took advantage of the higher margins and multiple shopping trips to build traffic to their
stores. Kodak recognized this early on and was one of the first to introduce affordable digital cameras and an online service to save and edit your new digital photos. However, with such a history and profit model tied in to film and developing, the company struggled to keep up with the fast changing world of photography. This opened the door for new brands like Shutterfly and Snapfish to provide exciting photo services and products online that not only encouraged more photo taking by customers but also gave them new ideas on how to enjoy the pictures long after the event. Most retailers now offer these services online and it’s not surprising that the online photo sites look amazingly like Shutterfly’s site. (In fact, they provide the service tot the stores in a turnkey fashion, while still providing the traffic building option of in-store pickup.

Just as Facebook and Instagram have made photos a part of our communications, Shutterfly provides new ways to keep your photos alive and visible in everything from photo books to tee shirts to blankets.   Meanwhile, Kodak digital cameras are almost non-existent on the shelves of most retailers, their Easy Share program has disappeared, and the company continues to fade.

It all starts with the customer and keeping in touch with them. Then refining and building a brand strategy that takes advantage of the changes in attitudes and behaviors. The regional malls aren’t as easy to move away from and many have added “restaurant rows” to generate more of a town center feeling. But aside from a place for teens to hang out at, or an air-conditioned walking track for many seniors for their morning exercise, their reason for being has faded. When the first malls appeared in my hometown of Detroit, the primary benefit was a warm place to shop in the winter. Here in Florida, it was a cool place to shop to get away from the hot sun and humidity. Customers don’t seem to value these benefits as much any more. They want an interesting, convenient place to shop and a brand that meets their needs of today.