The writing is on the windows and browsers for Woolworths
The most telling thing about the sad demise of brand Woolworths was the message on their UK website broadcast first thing on 11th December 2008 “…Currently undergoing essential maintenance. We apologise for any inconvenience caused. Please check back later.
With the company facing £385 million of debts, just after 4.30pm on 10th December Woolworths’ head office sent an email to the managers of all its 815 stores announcing that no buyer had recognised the wonder of the Woolies brand. Today stores open with signs printed at the last minute reading:“closing down sale”.
The company’s administrator, Deloitte confirmed the awful news for 30,000 staff that if no solid offers for Woolworths were forthcoming, “some stores may close before the end of December”.
The Woolworths brand lost direction and focus. It persisted in the notion that consumers still wanted an old fashioned emporium of loose ends rather than a store of focused brands. Even traditional DVDs and toys were being bought via competitive, more focused websites, or at better brand positioned specialist retailers.
A blue Christmas
Consumers facing hundreds of brand messages each day need clear messages about what stores mean. Woolworths lost that meaning. Ironically, the only time the brand had a cohesive meaning - ‘value and fun’ - was during the very season that it collapsed: Christmas.
As consumers come to expect retailers to chase hard for custom, other high street names will scramble to balance the benefits of bigger discounts against diminishing profit margins.
In terms of branding, whilst price wars offer savings, longer term, such battles may lead to poorer and ‘fuzzier’ brand perceptions; making one brand appear much the same as another – and so eroding its cachet.
Perceptions
From a public perception point of view - especially for staff, with Christmas just a couple of weeks away, many more well known hard pushed brands may hold off until mid January to make further dramatic redundancies. If this prediction is true, the only people on the high street left making profits in the new year could be printers turning out endless last minute signs announcing even further closing down sales.
Woolworths, one of the UK’s best-loved brands has gone into administration, putting more than 25,000 jobs and 815 branches at risk. Yet there may still be a sparkle of hope for the high street legend that remains open for business today.
Woolies has an exceptional place in consumers’ hearts. It was just one year away from its centenary. Such an endearing name offers the official administrators Deloitte, the chance to market the concern to a shrewd buyer who appreciates the potential that such an evocative brand could still hold – especially in difficult times.
Harnessing that potential requires an understanding of what went wrong and then doing something about it. From a financial point of view the company has struggled under the weight of £385m of debt. Over the past couple of months credit insurers forced the company to pay cash when buying goods from suppliers.
Pick and slightly mixed up
The Woolworths brand has always taken advantage of one of the most powerful psychological pulls that any company could ever wish for – nostalgia. This was clearly demonstrated when the news of the company going into administration encouraged consumers throughout the country to reflect on their childhood memories of ‘good old Woolies’ being a place to buy all the essential knick-knacks of life.
It was the people’s store. Unfortunately for the brand, it didn’t keep up with the people’s changing tastes and buying patterns. A puzzling product portfolio left consumers scratching their heads. The result was a confused brand message that led people to wonder what Woolies actually stood for.
Competition from other more brand-focused high street retailers selling similar products meant that core items like toys and DVDs could be purchased elsewhere at stores with a clearer idea of what their brand represented. The other branding issue was staff. Going to Woolworths was no longer a great brand experience. It was more like choosing products off a muddled stockroom shelf manned by people who didn’t really want or care to serve anyone.
However, with the right kind of brand refocus, the stores could still be turned around to once again represent a beacon of good old fashion value and service that puts the people first.
The bitter paradox of the brand’s demise is that it has happened at the one time of year when Woolworths always shines: Christmas (during which over 90% of it revenues are made). Over the next few weeks consumers could either take the news as an indication that if brand like Woolworths and MFI could go down, anyone could go down. That leads to greater belt tightening. This places more high street names like Currys at risk. It is a wake-up call to businesses that being big is no longer enough – it’s about responding to a fast changing, difficult market that demands great attention to its needs in tough times.
Alternatively it might be a signal for consumers to band together in a defiant show of traditional ‘people power’ that gives their nostalgic brand emporium a gift of hope and support during this supposed season of good will to all men and fondly remembered brands.
Look at the date and time of this blog.
It is dated one day before President Obama was elected as the new leader of USA. Why such confidence in my prediction? I just feel it in my bones – not just because of Mr Obama’s tenacity but also, thanks to a change in the air helped in no small part by a remarkable young man from an unremarkable English town called, Stevenage.
At the tender age of 23 Lewis Hamilton has become the world’s youngest Formula 1 world champion. That’s great news for him. Terrific news for his father, Anthony who coached him. Inspiring news for the black community and outstanding news for his bank manager who can anticipate sponsorship earnings in excess of one billion dollars.
Brands hatched
The headline grabbing ‘$1bn price tag’ has been estimated by Forbes magazine. According to Sports Illustrated, Hamilton’s earnings to date are around £17 million (sterling). David Beckham is worth up to £31million. Tiger Woods is worth around £72 million. (In 2004 alone, David Beckham brand endorsements were worth approx. £17.3million).
Currently Hamilton has a branding contract with McLaren worth £75million over five years. His endorsement for Reebok is reportedly worth around £20million. According to the Sunday Times Rich List, Hamilton shares the same wealth ranking as Cristiano Ronaldo (15th place). With brands waiting in the wing to present their business cards, he can shortly expect an even higher grid position in the rich-race.
As part of his racing team, Hamilton also sponsors Vodafone, Santander, Johnny Walker, Mobil, Boss and FedEx. He also has a deal with Bombardier jets, which he occasionally uses for private flights. Rumours have it that his management is also in discussions with Sony and Pepsi.
Young gift and British
So what makes Hamilton so valuable to brands? In three words: talent, age and glamour.
Hamilton’s driving skills are beyond reproach – and it is promised that the best is yet to come. The credit crises means that brands have to be especially careful about who or what they invest in. Hamilton is no ‘one-lap’ kid. His father, Anthony, has groomed him from a tender aged for greatness. His youth offers a great unfolding story that, even in its first chapters has kept the press turning the pages to see what comes next. That’s nectar for global corporate brands, especially in the banking and oil sectors which have taken a perception beating from the public and now are desperate to be associated with glamorous, yet accessible world-stage sports like Formula 1 racing.
With David Beckham slowly but steadily approaching the end of his active football playing years, Hamilton is primed to become the next celebrity idol for the gossip magazines to paw and ponder over. The breathtaking rise to almost winning the championship last year and then finally taking the crown this year is compelling copy for magazine editors. His relationship with Pussycat Dolls singer, Nicole Scherzinger, has already drawn comparisons with ‘Posh and Becks’. So far that has seen photos in the press of the couple hand in hand in Paris, at Mandela’s 90th birthday party and of course the Monaco Grand Prix. All his provides brands with an even broader audience appeal than petrol-heads at noisy race-meets. Add to the mix his investment in a glamorous hotel complex in Grenada and his Swiss home retreat – and you have the perfect marketing celebrity ingredients of intrigue, personality and status.
The last racing driver to even come several laps close to Hamilton’s branding power potential would be someone like Schumaker who became a one-man brand selling everything from his own sunglasses to branded dolls and games and believe it or not –a branded vacuum cleaner!
Much has been made of the fact that Hamilton is mix-raced. That has given communities of all ethnicities something to sing in praise of. His skin colour also gives credit to a multi-racial, global Great Britain which, at last, has a young man it can present to the greater community as being more interested in the twists and turns of the race-track rather than twirls and tumbles of being politically stereotyped as either a Chav or Hoodie.
Realising the dream
Which brings me to President Obama: Another brand hero in the making. Again, compared to his predecessors, he is the young new kid on the block. Apart from right or left-wingers – Obama appeals to everyone looking for what people suffering in a recession need in copious amounts – hope.
It seems that the world has reached a critical tipping point that demands change and vitality.
In both cases, providing Messrs Hamilton and Obama stick to what they know best – negotiating the road ahead with skill and tenacity, in terms of their brand personas, the future looks like being a thrilling and profitable ride for all – in more ways than one.
Following the President’s plea for the House of Representatives to vote for a $700-billion Wall Street bailout plan, marketers have suggested that the President should have concentrated on the word “rescue” rather than being seen to offer a “bailout”.
Paradoxically in his address to the nation on 24th September, a sombre President Bush didn’t even mention the ‘B’ word. Instead he said:
“I propose that the Federal Government reduce the risk posed by (these) troubled assets and supply urgently needed money so banks and other financial institutions can avoid collapse and resume lending. This rescue effort is not aimed at preserving any individual company or industry. It is aimed at preserving America’s overall economy.”
What he only once referred to ‘rescue’ the world’s press, and many members of the House of Representatives interpreted and damned as “bailout”. Expressions like ‘bailout’ imply failure and breakdown: the utter antithesis of the homegrown virtuous American dream of success and foresight.
A simpler truth
Arguably from a branding perspective, President Bush’s advisors could have come up with clearer message of intent. Reportedly many branding experts such as Andrew Bennett, CEO of Euro RSCG, suggested that the White House should have simplified the President’s message.
Others in the marketing community recommended that the proposal should have been rebranded in terms of an act of selfless heroism.
In such a case spin-doctors could have repackaged the emergency in the equivalent terms of a movie trailer. The American people would have been presented the image of the kind yet tough New York Firefighter daring to face the deadly backdraft – all to rescue the weakened economy from the roaring flames of recession.
Alternatively branding people could have re-pitched the crisis in terms of a David versus Goliath battle. Here outrage is expressed against the giant ‘wicked warlocks of Wall Street’ in need of a sharp lesson meted out by the simple community of god-fearing Americans (the ‘Davids’) inspired by their leader George – the dragon slayer. (A subtle homage to the special UK/US relationship.)
The argument goes that if the President would have realigned his national address in the kind of positive terms used at the beginning of the current conflict in Iraq, at the very least he could avoided being demeaned by The House of Representatives who initially rejected his “rescue” plan.
Assertive leadership
Within twelve hours of the fall of the Twin Towers President Bush promised immediate and positive rescue tactics. His speech repeatedly affirmed his assertive leadership to rescue rather than redeem.
For example:
“I implemented our government’s emergency response plans. Our military is powerful, and it’s prepared. Our emergency teams are working in New York City and Washington, D.C. to help with local rescue efforts.”
Whilst no one directly compares the human horror of 9/11 to the current situation, it is interesting to consider how sometimes a President - or any leader - is perceived not simply by what is said, but how a message is delivered and so understood.
The same is true in any branding exercise. From marketing sports to politicians, the art of branding isn’t simply about catchphrases or logos: At its heart is the soul of a message. At the centre of it all is a simple meaning that is explained and detailed in full.
Ironically it was President Bush himself who once said: “In my line of work you got to keep repeating things over and over and over again for the truth to sink in.”
In today’s sound-bite society such an approach should be taken for granted as a ‘101’ lesson for any politician wishing to highlight a message to the press who report meaning, along with the public who judge that meaning’s merits and value.
Tony Blair understood this when he said, “Education, education, education”. Martin Luther King understood it when repeated and explained his “dream”.
Perhaps in his closing weeks as leader it is just too late for President Bush to be an Abraham-like figure; offering a firm outstretched hand to sacrifice what is dear for a greater cause. His legacy may be abandoning the otherwise proud American people to be bailed out by a new world order of international rescue.
How stupid do brands think people are? Discussing Heinz’s decision last week to drop the word ‘baked’ which has graced its tins of iconic beans since 1886, John Alderman, marketing manager for the company said: “Heinz Beanz have been powering the nation for over a hundred years and to say thank you to our loyal fans, we have given this iconic product a 21st century makeover”.
Well ‘thanks’ for er… nothing Mr Alderman. The new tins (which go on sale from August) will still be printed in their familiar turquoise colour. However, instead of the word ‘baked’ there will be a picture of some their lovely beans oozing out of the label. This is so the consumer will know what’s inside the tin without having to read the word ‘baked’.
Whilst the new design is pretty, the reasons for the new design are questionable. According to the company’s PR people, the reverse of the new tin will highlight the beans’ nutritional benefits – low in fat and sugar (Heinz has reduced the salt content by 30 per cent over the last five years) and high in fibre and protein: All good stuff. However the other reason for the new label is apparently because consumers are just too dumb to say the world ‘baked’ when asking for a tin in the local supermarket. So now they only have to say ‘Heinz Beanz’ rather than Heinz Baked Beans’.
Whilst grammar students would question the idea of ‘beanz’ rather than ‘beans’, I totally understand the branding thinking and it’s a reasonable one. However, dropping ‘baked’ because Heinz believe that the average 850 million Britons who eat their product each year (that’s equivalent to 96,000 plates an hour) can’t get manage to pronounce an additional one syllable word is frankly an insult.
The move is reportedly costing the company up to £5 million. (Presumably that includes the cost of the extra ink not such a good idea in these green- conscious days).
This is all nothing compared the current cost of baked beans in Zimbabwe where that most congenial of grocers – Mr Mugabe – is charging tin Z$30 billion tin.
Now that really is a mouthful for consumers to swallow.
Jonathan Gabay
www.brandforensics.co.uk