License to Brand

Costco signs deal with Iconix to sell Charisma line

I was very interested to read this morning about the deal that Costo has struck with Iconix to sell the Charisma line.  The Charisma line is bridal-focused, offering 100% Egyptian cotton fashion bedding, sheets, blankets and towels.

 

Costco has done such an amazing job with the Kirkland brand, really establishing it as standing for “trusted quality and value” - whether it be clothes or diapers.  So the fact that they still see the value of licensing a brand really shows what astute brand strategist the folks at Costco are. The Charisma brand is “additive” to the Kirkland brand – it brings them a set of images that would be hard to build and/or would require greater time and investment than the category deserves or might afford.

 

And the partner they’ve selected is excellent.  If there’s anybody to watch in the licensing industry, it’s Iconix.  They’re well-known for buying brands and sustaining or revitalizing them through licensing, whether it’s Danskin or Ocean Pacific. 

 

Costco understands that licensed brands are not “instead of” private label brands…they can all be a part of a total portfolio.  Here’s a store with a great brand and there’s still room for licensing because it brings with it brand equity that builds the overall Costco shopping experience – while increasing the Costco’s overall share of store brands. Improved profit margins will undoubtedly result.

 

I applaud both Costco and Iconix for an excellent marriage…completed with great bridal sheets and towels!

Outlet Malls Offer Viable Means for Upscale Brands to Reach the Masses

I recently made a field trip (ok, I was shopping too!) to the Woodbury Commons Premium Outlets in upstate New York and had such a great experience.  Despite its substantial size and a few “tourista” buses, it had the feeling of a small, quaint village.  It was laid out with similar brands adjacent to each other.  There was a plethora of upscale brands from Chloe, Chanel and Jimmy Choo to Furla Luggage and David Yurman. It got me to thinking about the fact that it’s always a risk for a prestigious brand to go “down-market” to malls and even retail outlets, but it’s a very savvy strategy if done well.

 

As we’re seeing more and more, women’s shopping habits are changing…she might be wearing Michael Kors shoes bought at Neiman Marcus, a Marc Jacobs dress from Loehmann’s and carrying a Mossimo handbag from Target.  And with that evolution, retailers can make adjustments to the channels they utilize to reach consumers.

 

In fact, I just saw an article this week about the fact that Saks and Nordstrom are headed to outlet mall locations.  Even consumers who typically shop in luxury retail stores are worried about wealth destruction, retirement savings, debt and whether they’re still employed.  But they still want to shop at the Neiman Marcuses of the world – and have the same great customer service experience – all while paying less.  Retail options such as this allow them to do that.

 

In the past, outlet malls were used to clear out overstocked merchandise, clearance items or irregular sizes without hurting full-line stores.  But that’s a thing of the past, with outlet mall stores now also offering merchandise that’s exclusive to their stores.

 

Wal-Mart and Target have been doing this for years, with great success.  Think of Target’s Isaac Mizrahi or Rachel Ashwell product lines, or even Wal-Mart’s Norma Kamali line of clothing.  Kohl’s is another one that does this very well, with powerhouses like Vera Wang, Daisy Fuentes and Avril Lavigne in their retailer-exclusive arsenal.  So in essence, retail players like Saks and Nordstrom are jumping into waters these pioneers have already tested…but this also provides the benefit of having a stronger brand image than what is typically found at discount stores.

 

So now you know what I think – definitely a smart strategy…what do you think?   

Is the Saturn brand strong enough to survive?

I had the pleasure of working with General Motors several years ago, back when the   Saturn division was being developed.  The brand had such promise, and it really delivered on that promise.  The goal almost two decades ago was to show consumers that an American automaker could build economical small cars as well as the Japanese could.  The result was a car that is fuel efficient, safe, reliable and affordable.  The Saturn brand has won too many awards to count over the years as the best value for Americans.  Along the way it’s also instilled a unique passion in owners.

 

So although GM recently announced plans to shed Saturn as part of its corporate restructuring in conjunction with taking more than $17 billion in emergency loans from the US government and taxpayers, don’t count them out yet.  Saturn dealers and GM managers are working on a potential plan that would spin off Saturn, maintaining the current dealer network.  Eventually, they would field a new line of non-GM vehicles under the Saturn name.

 

Beyond the 208 dealers, there’s also talk of a group of investors or even another automaker (perhaps from

China

) wanting to buy the Saturn brand.

 

Amidst so much bad news about the auto industry, it’s fascinating (though no surprise) that the brand that might survive all of this is the one that’s got the wildly devout owner base. 

 

Who knows what will ultimately happen?  In a perfect world, I have no doubt whatsoever that Saturn would come out on the other side.  The financial and logistical realities of the situation leave me uncertain as to what will happen.  But either way, it reinforces my belief that a strong brand that consumers identify with cannot be underestimated.

 

What are your thoughts on what will happen with Saturn?  What do you think it is about Saturn that inspires such passion?

 

Staples maximizes in-store assets to build its brand

A while back we commented on Staples introduction of is new “M” brand of stylish office supplies that crosses a range of product categories like funky push pins, cool binder clips and colorful file folders.  Staples believes that a sense of personal style can give the brand a personality and reason for being. We raised the question as to whether Staples was prepared to take the long view required to really build the brand or whether “M” would simply go the way of other “created” store brands that fade from a lack of support.

 

It looks like Staples is off to a good start by really leveraging its most valuable asset, which is its control of the retail environment. In a recent article in In-store Merchandising, Caren Putterman reports:

 

“The chain is devoting a majority of endcaps to Staples-brand products, which are merchandised beneath headers that read, "Save the easy way" and "Save with Staples brand." The theme is also communicated on ceiling banners and in-line headers in the seasonal department. Aisle violators in other departments feature product shots.

 

The program includes special in-line attention for the chain's M by Staples product line, with in-line graphics employing the brand's "My style. My way" tagline. The brand is also still merchandised on the upfront table displays deployed for its launch in May 2008.”

 

In our experience, retailers are still learning how to act like brand owners rather than just merchandisers. An easy place for them to start in thinking about this is by asking themselves a simple question….What do their national brand vendors want the most? The answer is right in their own stores and hallowed headquarters.  They want:

1. Favorable shelf space. 

2. Favorable off-shelf display.

3. Prominent features in circulars and other promotional vehicles.

4. Access to their loyalty card customer base.

 

It sounds like Staples is maximizing at least some of its own coveted marketing assets to build its brands directly in competition to their branded vendors. Good for them! It’s all about value – especially these days. Staples own-brand products are great quality at a great price. They’re more profitable for Staples and the consumer gets more for less. Marketing 101, everybody wins.

P&G and the Limited…an unlikely brand marriage?

I don’t think so. This brand relationship is really an interesting creative twist. And I like it a lot.

 

Retailing Today is reporting a marketing partnership between P & G’s Tide and Downy brands with The Limited – taking place in more than 200 Limited stores with hang tags, GWP’s and customized signing.

 

It’s all part of a $60 marketing campaign to introduce Tide and Downy’s latest line of fashion care products.  The companies are building on the success of previous partnerships, and cite the fact that research has shown a strong overlap between Tide and Downy consumers and The Limited’s clientele, both of whom are focused on fashion as well as clothing maintenance.

 

Tide and Downy could be thought of as anything but fashion brands – but in today’s economy the idea of making your clothes wear and last longer is right on target. The Limited enhances its customer care profile while P & G gets exposure in an exciting, up-lifting lifestyle-driven environment…..linking these everyday brands with a sense of style and fashion. Just like their Times Square events on News Year Eve, P & G is showing some real creativity in how they are reaching out to new generations of consumers with non-traditional experiential-type programs.

 

According to Linda Heasley, CEO of The Limited, "The Limited provides modern women with high-quality private-label apparel designed to help the modern woman succeed. Nearly 80% of The Limited's products are machine washable, allowing clients to keep costs down as they continue to care for their clothes. This partnership with Tide and Downy will give our clients the opportunity to wash their favorite items with innovative Total Care technologies, helping to keep their clothes looking beautiful."

 

It seems to me both brands win on this one. And that’s the way good marriages are supposed to work!

 

P.S. For all you “brand junkies”  out there, you might want to cast your votes for brandchannel.coms 2009 BRAND JUNKIE AWARDS – just click on the link and let your opinions be heard!

Heinz new look?…..batting 1000! Pepsi is only 1 for 3!

 

Updating brands is a curious process that marketers seemed compelled to engage in. I love logos, packaging, brand imagery, as well as all of the sociological and psychological art and science that they embody. But sometimes we wonder what drives changes like the ones Pepsi recently made. I like the new Pepsi logo – it’s immediately recognizable and it updates the brand’s contemporary feel by degrees. And then there’s Pepsi great Super Bowl advertising this year – what a great way to reinforce Pepsi’s iconic status as the brand of American youthfulness - classic, funny, modern and irreverent. But what they’ve done to Gatorade and Tropicana is a different story.

 

The rationale behind the Gatorade switch is supposedly a loss of share to enhanced water products.  But is that really the segment in which they want their brand to compete? It seems to me that the brand they have (or maybe had) was so much more than that – it had history, it had soul, it had plenty of energy. Now, I’m the first to admit that it’s a bit presumptuous to be opining from the sidelines without reams of data about the Pepsi brands and their relevance today…and tomorrow. But it is curious to me how Pepsi can pull off a smart “tweak” with the Pepsi brand, while at the same time take such a risky leap with Gatorade, and then seemingly take the great Tropicana brand generic.  It just doesn’t make sense.

 

Heinz seems to have done it right. Lose a pickle and gain a tomato? That’s easy to understand…..and no matter what the research says, 95% of consumers will barely notice. It’s now and always the brand they love and trust. Solid and true. That, to me, is the way it should be done. Great brands seldom need overhauls.  Betty Crocker, Westinghouse, GE, Jack Daniels, Apple, Verizon. Whether old or new, brands sometime need minor treatment for the fine lines and wrinkles. It’s the Joan Rivers “overhaul” approach that I find hard to understand.

AMAZING FOOD CREATIONS AND CONSTELLATION MANAGEMENT GROUP FORM PROPRIETARY BRAND RELATIONSHIP

I wanted to share some news about one of Constellation Management Group’s (CMG) latest projects.  We’ve been selected by

Chicago-

based Amazing Food Creations! to develop a distinguished private label brand based on its leading-edge Chef Papillote™ cooking technology for healthy, high-quality frozen prepared foods.  Chef Papillot's brown paper pouch cooking technology is environmentally-friendly and is a unique cooking technology that maintains the flavor, freshness and proper texture of food throughout the cooking process, unlike other frozen prepared meals currently on the market.

Amazing Food Creations is relying on CMG to build a comprehensive private label branding strategy for the Chef Papillote line, which includes research, product and package development, sales, marketing and brand management.

 

The new Chef Papillote private-label line will be sold on a regional exclusive basis in supermarkets and gourmet grocery stores across the U.S. Right now, you can buy Chef Papillote at Sam's Club and we will be announcing more retail partners in the near future.  Stay tuned.

 

P&G Taps into Times Square Revelers to Highlight Key Brands on New Year's Eve

Check out David Holthaus’ article from 12/31, titled “Times Square revelry stars P&G”, for an interesting take on how the designed promotions to get consumers involved with the products.  Duracell batteries, Charmin toilet paper and Scope mouthwash are the three brands that were featured at the event with one million attendees and more than 20 million television viewers.

 

It’s Duracell that powered the 2009 numbers, with P&G hosting the “Duracell Power Lodge” in

Times Square

, where visitors could pedal a bike to generate power that was then stored in preparation for tonight's festivities.

 

Charmin hosted the restrooms in

Times Square

with baby-changing stations, stroller parking, flat-screen TVs and a family photo area.

 

And Scope mouthwash hosted the

Times Square

"KissCam" in a partnership with American Idol host Ryan Seacrest. P&G also advertised the promotion on Seacrest's national radio show and his Web site.

 

They even thought of a charitable tie-in, making a donation to Operation Smile for every couple caught kissing.

 

These are smart ways to get consumers to participate in brands versus just passively seeing them via traditional advertising channels.  It’s a young (aka appealing) audience that will be there, and these kind of promotions can sometimes allow the brands to become more real when we don’t have our defenses up.

 

Check it out – and happy new year!

 

OfficeMax is Up to Something Interesting – Peter Walsh is in the House

OfficeMax is at it again.  As you may recall, last October I wrote about the company unveiling four new private label lines it developed in house.  These attractive looking new brands – called Ascend,

Canterbury

, Divoga and Infuse – were launched to add more colorful, design-focused products to the office supply retailer, which OfficeMax claims are not currently being carried in its stores.

 

Based on some new billboards I recently spotted in

Chicago

, now the company appears to be taking a different page from its private label playbook – licensing a well know brand to create a private label line vs building the brand from scratch.  According to these billboards, it appears the company will be unveiling a new private label brand with Oprah’s well known organization expert Peter Walsh.  There aren't many details available at this point, but I did just see Peter's January newsletter which mentions that he is "teaming up with OfficeMax this year to tame homes and offices across the country." I would expect that additional details about this new line will be hitting the wires any day.

 

At face value, I think this partnership is a wise move for OfficeMax and promises to be more successful than the four labels it launched this Fall, which I blogged about.  Why?  Licensing the Peter Walsh brand will enable OfficeMax to effortlessly gain a following and brand identity for its new product line with a fiercely loyal group of fans…and that is the beauty of licensing for retail exclusive brands.

H&M Scores Exclusive Brand Deal with Comme des Garçons

Wow, talk about success!  If you were in

New York

last month, you probably saw the free for all frenzy that ensued when the H&M store in Herald Squared opened its doors, featuring the Comme des Garçons line.  Even the New York Times did an article on the overwhelming reaction consumers had to getting this exclusive, high-end product line at significantly reduced prices. 

 

I've been fascinated watching what works and what doesn't in today's economy, and so I always enjoy seeing a retailer hit one out of the park with such a great strategy.  What H&M did wasn't new, it's something large retail chains have been doing for a while such as Target's great success with the Isaac Mizrahi garments. 

 

The retailer wins because they get a high-end product to offer consumers at a livable price.  And it enables the designer to reach the masses in a targeted, exclusive manner.  Comme des Garçons designer Rei Kawakubo, was interested in partnering with H&M “to appeal to people who may not yet understand Comme des Garçons.” An H & M news release described her work as “surprisingly wearable.”

 

THe concept isn't entirely new to H & M — the Swedish-based chain offering trendy clothes at great prices — they've sold lines from Karl Lagerfeld and Roberto Cavalli in the past. But what's appears to be unique about this deal for H&M is its well coordinated marketing campaign with Comme des Garçons, which is a long-time beloved label for the fashion conscious. 

 

The Comme des Garçons line went on sale in

New York

as well as the other large urban H&M stores, including

San Francisco

,

LA,

Toronto

,

Chicago

and

London

- all on the same day.  In fact, the product line is only available at eight of H&M's 168 locations in the

U.S.

, the stores in more upscale areas where consumers will already be familiar with the product line. 

 

It's clear that H&M and Comme des Garçons carefully considered and orchestrated this launch, and it's paying off for them.  I hearken back to my point about integration between licensor and licensee - the best success comes when the licensee understands and embraces the brand as if it were its own.  With Comme des Garçons, a designer that already has such a rich brand and devoted following, this seems like the perfect marriage.  What do you think?