They got up at 3 a.m. and drove 4 hours to just get in a line.
They came from the North; they came from the South; they came from the West. And then waited another 4 or 5 hours just to be there when the doors opened!
No, we are not talking about the Apple Store, we’re talking about H&M opening a new store in Florida. H&M continues to increase sales, as it begins to broaden its audience in the US market.
So, ask yourself, can your brand command this kind of attention?
The line snaked around the mall.
Naively, my sister and I showed up at around 11:00 a.m. to check out the scene. But the brand devotees were already there! The line for the 12:00 p.m. opening started at 5:30 a.m.! You can see some of our happy H&M brand devotees waiting to get in.
Command of the Brand means Supply Chain — yes!
The H&M appeal is not only that they try to be trendy and cool — now — but also that they keep customers returning frequently to the store, with a ‘short leash’ on product turns and inventory turns. High velocity supply chain is not just about logistics, but a rapid fashion turn, that works really well with the ‘fast fashion’ buyer.No easy feat to succeed at.
European stores like Zara and H&M took their supply chain strategies and blended them into the product strategy, not getting stuck with stuff that does not work, and also keeping the interest level of the customer high, keeping them coming back, obviously having a positive impact on sales and brand power.Unlike certain brands with (I saw that) weak displays and merchandise, H&M seems to understand their target customer. Think about it, do you want your customers to yawn at the prospect of visiting your store, and instead go repeatedly to the other brands? No need to cruise the aisles to see what’s new — there isn’t anything new, so we won’t be back for a few months, until they have their markdowns.
Unlike H&M or Forever 21, there are J Crew or American Eagle, also successful enterprises with strong brand, that have smart supply chain strategies, but appeal more to a classic fashion sense, so they probably don’t need to practice the life-cycle/supply chain turn game in quite the same way. Although J Crew stocks some items that are trendy and fast fashion, they traditionally stock timeless (and often higher quality and price) items for young career shopping. In fact, in their high-end line, J Crew has taken a bit of a risk, which seems to be working, on a more high fashion (meaning high price) market with limited supply. Scarcity adds to the mystique of the brand. If you have a product hit, now everyone wants one, and you will be the lucky guy, or gal, who has it, not everyone else. A classic high-end item should be an ‘aspire to’ product. (Seen too many UGG boots yet? Or leased BMWs?)
Long life cycle – High Risk
The contrast in overall strategy (fast turn fashion vs. classic longer life) of course may seem very trivial to an auto maker, but the lessons are important. How much more successful could you be at the bottom line with a shorter product life cycle and ‘run out’ of inventory vs. the annual expected end of season sales? Strategies on build-to-order have been around in the auto industry, but never fully successful. Instead, the long life cycle high-risk strategy prevails. You have to have a real hit, putting all your chips in on this product vs. a fast cycle product strategy, where you can easily move on to the next big thing, in order to be successful.
Forever 21, (which should be renamed forever 12) is another example of the retailer that has worked to understand their audience, and develop a high turn product and supply chain strategy to match. Since last I checked, teen shoppers have a short attention span, are impulse shoppers, and hang in the mall like sand fleas circling each opportunity. Understanding those behaviors allows a smart company to develop a strategy such as having the fresh shipments on display by Thursday so that kids who hang in the malls Friday night and weekends can visit your store each and every week to check out the new stuff, as well as the piles of new mark-downs that happen weekly, not at the end of the season.
Each product and each audience need to be understood, surely. What works for one is not right for another. But it is your job to innovate — on product, on strategy — and get the right set of attributes, pricing, and business model in order to grow and keep your customer interest high. This is why brand is so important.Products come and go, but will customers come again? Year after year?
How important is brand?
No doubt it’s the latest trends that excite us, whether it’s the new iPhone or other popular products.
But there is something more here . . . the sense of belonging? An expectation of fulfillment of some kind?
Or a sense of self-expression that we have few opportunities for? (Steven Colbert / Jon Stuart demonstration scene above.)
Brand can be an elusive thing, but it has to be earned. Stewart and Colbert really have a brand!At this point, we still can’t quite get enough of them, although they are on daily. Who you are matters — fast fashion, Colbert, or an exclusive and rare brand like Grisham or Streisand. The rarer, the richer?
The successful brand seems to align across the whole business, from experience to product to supply chain — they work together — aligned to create and manage expectations. Even if you have a cool product, without the context, the experience may never achieve the brand appeal.
Sustaining the brand appeal is also critical to the customers’ perception of value. It appears that long-term appeal, not just a flash of brilliance, happens through this alignment.
I am not overly disappointed when Colbert and Stewart are not funny on every line, and am actually surprised they do as well as they do, day after day. But if I were waiting months for the next Harry Potter or Dirty Harry, I would be more judgmental. Both models have a huge strain in a way — the daily production/fast cycle product strategy vs. less production but more costly and risky if things don’t go so well. Big projects that fail, flop fast!
Fast turn has the challenge of scaling every touch point and detail in production type of process to be successful.With product sale that allows prep time, on the other hand, such as custom design, you may have time to prepare for each customer visit; these don’t have to be mass produced, but orchestrated interactions. But here the key elements of personnel training (as we talked about in Forty Six Shopping Days To Christmas) must be part of your strategy, since the encounter is not ‘mass produced.’So, although each customer encounter may be unique, the organization is able to handle the encounter with aplomb (i.e. a Ritz Carlton experience). Lost shoppers can be made happy shoppers by a staff that goes out of their way to take you right to the aisle and shelf that you were looking for!
However, that strategy won’t work in a restaurant or with food products. If the big chain is not consistently good, for example, even after years of customer loyalty . . . well, this time it wasn’t so good. Food was not cooked properly. It was too salty. Or some of the nuts tasted bad in the protein bar. Or the staff was not empathetic! These types of businesses can easily lose their brand appeal.Maybe they are getting sloppy in their operations, their training, and their material procurement? The doubts start creeping in the mind of the consumer and soon they are seeking another place to eat or shop, or search for that experience. (Read on customer experience models.)
Brand Power means:
- Aligning product and merchandising to the demographic — trend vs. classic, enduring but exclusive
- Aligning the business model — supply chain strategy and customer experience to match the concept
- Emotional impact
- Financial staying power of company
- Value perception and sustaining value of the experience (every year we go there and it is always great).
Success at Last!
At last! At 2:30 p.m. we finally got our chance at the hottest event of the day in Jupiter.
Here I am entering the store. Ever a nerd, a geek and other such titles I have been called, I was not immune to the excitement of a promise of the brand and a chance to get in on the opening offers, while they last.
Unlike the 5 deep waiting for dressing rooms and the 4 deep snaking around the store waiting 45 minutes or longer for check-out, I had a different experience, of course. You don’t have to be a merchandising and marketing expert to know who H&M is designing for. I just could not see myself trading in my loafers for these.
This kind of merchandise strategy could be to blame for their weaker stock performance. But, I am not really the market they are going after. So, my vote, or taste in shoes, doesn’t count. Their sales will go on without me.
It will be interesting to see, as economic pressures increase, if they can maintain the mania year after year. So far Apple has. Coach has. We know that it’s possible to sustain the brand power. Consistency may not always be exciting, but it meets expectations and often fulfills — from donuts to Oprah. Let’s see how fast CNN brings back Larry King to retest the enduring brand theory!
Read our Christmas Shopping Days Strategy series or other demand strategies on our Demand series page.
To view other articles from this issue of the brief, click here.