Mindshare Marketing

For the past two holiday seasons, I’ve worked part time in a retail location to earn extra money for Christmas goodies.  Each year has been vastly different, highly impacted by the location I’ve been working and the company I’ve been working for.  Last year, for example, I worked for a shopping mall jewelry store which, despite its location, was relatively high end.  Most recently I’ve been working for a mid- to high-end clothing company.

Both experiences have taught me a great deal about customers, shopping behavior, and the overall mindset of “retail” on both sides of the counter.

Branded retail, specifically outlet stores, is something that most companies are getting into.  Rather than selling thier goods to another merchant, they are trying to sell directly to the end user.  This cuts out the middle man and raises margins, but can destroy your brand if you’re not careful!

Consider two different companies that both make t-shirts.  We’ll call the lower end company “Lows” and the higher end company “Highs” (hopefully the names are obvious).  They both start out selling through large, big-box clothing retailers like Sears and JC Penny’s.  Things are going well, but both companies want higher margins to support a push to global expansion.

In today’s world, it seems that both companies will open a branded store.  This is a bad decision for Lows.  While their product sells well when juxtaposed with higher-end, more expensive goods on the rack at Sears it will probably not sell well in isolation.  Competing on price does not work well when you don’t have the competition nearby to explain the differences.  A branded “Lows” store would not draw customers away from the branded big-box retailers elsewhere in town.  Lows can improve its bottom line by becoming more competitive on price - either by cutting costs or negotiating to increase sales volumes.

Highs, on the other hand, can strengthen their brand by developing a branded store.  People don’t have to wade through scores of lower-end goods to find the classy t-shirt they want, and might even be willing to pay a little bit more to experience the brand on its own turf.  The emotional story behind Highs’ brand can be fleshed out in a Highs-exclusive context and will strengthen its relationship with customers.  Highs can leave some of its product in the big-box world to remind less attentive customers who they are, but keeping products exclusive to their own locations will create a higher draw for their customers.

In reality, though, both companies will open retail stores.  Highs will even be enticed to compete directly with Lows on price and will open a branded “outlet” store for its factory seconds and outdated designs.  This is the absolutely worst thing Highs could do.  An outlet store, with markdowns between 40% and 90% of retail price raises questions in the customers’ minds.  ”Is this shirt that I bought really worth the $45 I paid last year?  Why didn’t I just wait until now and get it for $5?”

I’ve been talking a lot about habits lately.  Remember, you want the decision to buy your product to be automatic, not something the customer has to consider and debate each time.  By opening a branded outlet store, Highs is inviting loyal customers to question the value of their products.  Sales in the outlet might increase as customers become aware of the savings and competitiveness with Lows, but sales in the branded retail (first-quality product) store will decline and level off.  Highs’ brand will become associated more with the outlet model of shopping in a crowded space for discouts amidst other bargain hunters in a store so busy that “brand” becomes a distant afterthought.

Is your business more a Highs or a Lows?  Where on the development scale (selling through third parties — selling through branded retail stores) are you at now?  Are you moving in a direction that will strengthen your brand or weaken it?

I get a lot of spam in my inbox.  At least 20-50 items per day, to be exact.  Most of it consists of offers to work from home for reputable companies like Google and eBay (and most of them are scams).  Considering I already work from home about half of the time, I’ve always wondered how I got put on that particular mailing list.

This past week, though, I’ve been forced to work from home the entire time.  Snow in Oregon is usually fairly predictable: a few hours of flurries leads to an inch or two on the ground.  This leads to slow traffic and panicked commuters for the next day.  The snow quickly turns to slush and is gone within a day or two.  No big deal.

I have studded tires, so I can typically get around in just about anything.  I was going to add a set of chains to my collection this year, but friends and family talked me out of it.  Well, we’ve had a week now of “maybe we’ll be open, maybe you’ll be working from home, maybe you’ll close early.”  On Saturday the big storm hit.  After I made it home, I was stuck there.  The Department of Transportation put out a “chains required” restriction in the area, so now I can’t even leave the house (except by foot).

Not that I’d want to.  Here’s a view of my driveway circa yesterday morning.  Now add another inch of ice and another 6 inches of snow … then you’ll have today.  Oddly enough, it’s still snowing!  Everyone I know is being given the day off due to the weather, and most people are struggling to find things to do at home.  Of course, I still have the luxury (?) of being able to work, from home, in inclement weather.

This makes me wonder.  Why exactly is working from home the sought after holy grail of industry?  You can no longer call in sick.  You can’t use weather as a reason to take a day off.  And you can never be late to the office because you slept in.  Living in your office removes all barriers to being able to work … so why would a world that dreads Mondays and spends as much time at the watercooler as their desk want it so badly?

We’ve branded “working from home” well.  Perhaps too well …

Every morning when I first get on the computer, I point the browser to a few web comics I enjoy.  Starting the day with a nice dose of funny helps me be happier, more productive, and more fun to work with.  There are three web comics I really enjoy, but they all have different update schedules.  One updates weekdays.  One updates weekdays plus Saturday.  One updates Monday-Wednesday-Friday.

Yet for some reason, I load all of them every day.  I know consciously that on Tuesdays I’m loading one too many sites.  I know consciously on Saturday that I’m loading two too many sites.  But still, I load up all three of them.  It’s a habit, and loading the sites isn’t an act of conscious will.

I’ve been reading a great marketing book lately: Habit, by Neale Martin.  It’s a fantastic book that walks would-be marketers through the difference between the habitual (unconscious) and executive (conscious) minds.  I had never thought that habit played as large a role in my decision making as it does … then I stopped and thought about my daily web comic routine.  There’s nothing conscious about it!

If you’re looking for something great to read that will stimulate the conscious part of your marketing brain, pick up a copy of Habit at the bookstore.  It’s not cheap, but it’s fresh theory that will definitely turn your traditional ideas of marketing strategy on their collective head.