How J. Crew, IBM And Other At-Risk Brands Can Regain Footing In 2019
Ignore the early warning signs at your own peril (emphasis on the word early). Branding professionals will tell you that, while most brands can see change coming their way, those that wait too long to appropriately act on this change are those whose names are likely be added to the defunct list.
And, you don’t need to be a branding professional to know this list is growing quickly, with Sears among the most recent iconic brands to struggle.
There are three key reasons why waiting too long to reengineer a brand strategy makes catching up – let alone shifting ahead - so challenging. The first is that there is less time to innovate. By the time you get the troops focused on the problem, some agile competitor will beat you to the punch, better solving the consumer need for which you once earned credit. The second reason is less money to invest in innovation. Waiting too long, watching inertly as sales and profits decline, obviously means less cash in the coffers to address the issue. And the third reason? Loss of talent. As your brand loses relevance, it’s almost assured that you will lose your best talent. Great people navigate to winning brands.
Given the numerous brand misfortunes of this year past, my partner, Chip Walker, and I decided to turn our attention to the prospects for those brands beginning to show decline as we enter 2019. For empirical support, we turned to the BAV Group, a global consultancy that measures the four key brand qualities that augur future financial and marketplace success, those being differentiation, relevance, esteem and knowledge.
Differentiation and relevance, taken together, correspond to a brand’s strength and future growth potential. More differentiation than relevance means a brand has captured attention, although consumers aren’t sure how it fits into their lives. More relevance than differentiation means the brand has become a commodity. When differentiation and relevance are balanced, it signifies that the brand has the full potential to realize its momentum.
Esteem and knowledge, taken together, correspond to a brand’s stature. More esteem than knowledge means the brand is better liked than known. More knowledge than esteem? The brand is better known than liked. Esteem and knowledge in equal measure point to a brand recognized for its leadership.
Using the most recent data from the BAV Group, we zeroed in on five brands showing erosion in one or more of the four key brand qualities used to gauge future success, but that we believe still have an opportunity to course correct before it’s too late. Here, in brief, is our analysis.
1. J Crew
Once known as the dominant name in preppy clothing, J. Crew has undergone a series of leadership shakeups in recent years. Its meteoric rise in the early - 2000s was followed by a significant downward spiral that began in 2013 and continued into this year. While the general rockiness in the retail landscape is partially to blame, the bigger issue is that J. Crew is losing the differentiation that once defined it. The brand started out with a unique point of view. Preppy, yes, and with a bit of edge and attitude. Walk into any J. Crew store today and you’d be hard pressed to see what makes the merchandise, or the retail experience, any different from that of Gap, or Banana Republic. In order to go after short-term sales, the brand has erred on the side of relevance, manufacturing same-as-same-as clothing that appeals to a wider audience.) Brand success, especially in the fashion category, is not a short-term game. To get its winning game back, J. Crew has to figure out how to balance relevance with differentiation. It has to, once again, stand for something unique with the understanding that differentiation is the engine that drives a good part of why consumers will pay more for something.
2. Victoria’s Secret
Another fashion brand, this one known as much for its “Angels” and provocative December fashion show as for its sexy undergarments, Victoria’s Secret is still the leading lingerie label in the United States. Lately, however, it’s been accounting for a good share of parent company, L Brands’ decline in sales, this even after extending its well-known semi-annual sales period. BAV metrics-wise, this erosion points to two factors: loss of relevance and loss of esteem. There is no overstating the fact that Victoria’s Secret is no longer in step with the current state of women’s values – and attitudes toward women. The #MeToo movement and its impact on politics, culture, and society as a whole, is making overt sexuality less desirable. To get back on track, Victoria’s Secret must morph its brand point of view into something more in tune with what’s happening in the marketplace. Consumers certainly know the brand, but to regain the loyalty of these consumers, Victoria’s Secret must regain its esteem by demonstrating it understands the world in which we now live.
Launched in 1981, MTV was a radical new concept in television, airing music videos and music-basic programming aimed at young adults, becoming a major influencer of - and on - youth culture. Its slogan, “I Want My MTV,” famously adapted by Adman George Lois from the 1956 cereal spot, “I Want My Maypo,” helped cement its image. Campaigns throughout the ‘80s featuring music stars including Pat Benatar, David Bowie, Madonna, and Mick Jagger quoting this famous line, further reinforced its position as an iconic brand. However, in recent years it has continued to tone down its music video programming in favor of reality, comedy, and drama programming. This move to non-musical programming is not in alignment with the core MTV brand. Trying to win in the general media content category against bigger and richer players is simply not a smart strategy for MTV. In terms of BAV, its loss of differentiation and relevance are both responsible for MTV’s loss of momentum. With so many on-demand sources for music today, MTV would be well advised to go back to its roots. It was known and loved for programming based on music. It should look for ways to build on these roots as opposed to an open-ended media play.
4. Wells Fargo & Co.
This BAV story line is a simple one. Esteem. Wells Fargo, one of the largest financial institutions in the country, can’t seem to get out from under long-running issues of legal and ethical wrongdoing. This past year was no exception. Most recently, it was required to pay millions of all 50 states and the District of Columbia to settle claims regarding a fake-account scandal. Esteem is all about trust and reputation. Because financial services products are so highly regulated, it’s difficult for a bank to compete on differentiation. People don’t go to a bank because it’s different, but rather because they trust it to care for their financial needs. Trust and reputation are all. In order for Wells Fargo not to hit the defunct brand list, it will have to up its behavior game. Operate flawlessly and undeniably ethically. It must do whatever it can to become trustworthy again.
Computers are easy to understand. IBM used to get really high marks for esteem and knowledge when its brand was associated with computers. It also got really high marks for differentiation and relevance. IBM’s computers were leaders in the category on both dimensions. Consulting is not quite as easy to understand. But, when tied to a slogan that asserts that the consulting will result in “solutions for a small planet,” customers can assume there’s a benefit in it for them, resulting in continuing high BAV scores for IBM on all four dimensions. Then came the cloud, literally and figuratively. IBM began selling cloud computing, but so were many other brands, some more effectively than IBM. It also began to sell Artificial Intelligence and the shiny objects that went along with it, including Watson, a super-computing Jeopardy-playing robot. Despite the shiny objects, IBM’s BAV scores on relevance and esteem began to dip. Then really, really dip. Customers and investors today are having a hard time figuring out what IBM does. IBM is having an identity issue of its own and, as a result, its financials are taking a real hit. IBM is still a super-iconic brand name. Before time runs out, it has got to identify a relevantly differentiated brand strategy that can restore its esteem, and everything this implies.
Originally published in Forbes on Jan. 3, 2019
How Non-Profit Brands Competing with PrivateSector Brands Can Thrive
by Giovanna Blackston Keren
The 4 Must-Know Digital Marketing Trends of 2019
by Irina Papuc and