Archive for the ‘Brand Management’ Category
Folks in social media circles like to talk about the value using customers as brand ambassadors who advocate for the brand through social media. Of course, armed with a video camera and an internet connection, people don’t need to be asked by brands to be ambassadors. Remember Nick Haley’s iPod Touch ad? The really passionate ones just do it. When it comes out as good as Nick’s did, the brand can’t help but be happy. But what if your passionate customers create something that really doesn’t represent your brand in a helpful way. What if it’s so “cheesy” that it starts getting some serious YouTube traction. Is this kind of free advertising,”good” advertising?
Chris Abraham pointed this one out on his blog today. The person that made this video (and I assume composed the song) is clearly passionate about Hillary Clinton. I wonder if this is the kind of brand ambassador Hillary is looking for.
Is soon as the title of this post hit Twitter, I received a couple of comments suggesting that UGC won’t hurt your brand if you properly supervise it’s creation. That’s great if you are in-charge, but that’s not what I’m talking about here. There is no way to supervise or manage this. You can only respond to it (or not).
So how does user generated content like this affect a brand. Is it helpful? Can it be detrimental? If it happens to you, how will you respond?
When the 2007 holiday season kicked off a little over a month ago, US-based electronics retailer Circuit City introduced a series of TV commercials focusing on the simplicity of the digital lifestyle. With the ads, Circuit City introduces their latest moniker “Simplicity Guaranteed“. According to Circuit City’s Chief Marketing Officer, the new spots “illustrate how Circuit City makes it simple to Shop (on-line), Buy (in-store) and Enjoy (firedog services) your digital lifestyle this holiday season and beyond”. ”Simplicity Guaranteed” is the latest in a series catch phrases used by the retailer over the last few years. Previous slogans have included “Imagine That” (2000-2001), “We’re with You” (2001-2004), “Just What I Needed” (2004-April 2007) and “Circuit City Makes it Simple” (2005 Christmas Season)
All of these past slogans describe brand perceptions that Circuit City aspired to but failed to achieve. Why? Because a company’s brand is not defined by its catch phrase, logo, aesthetic style or culture. A company’s brand is ultimately defined by the experience they deliver to their customers and Circuit City has been unable to consistently deliver experiences that supported those brand promises.
The latest revival of the Simplicity theme is part of a larger strategic framework that I helped develop for Circuit City a few years ago (you can hear about it here). Making it Easy for customers to shop, buy and enjoy is one of the four key ingredients to the vision my team proposed. We also recognized that delivering experiences consistently supported the “Make it Easy” idea would require significant changes in processes, culture and internal success measurements. Almost two years after those recommendations were made, Circuit City has “re-branded” many of the same operational features that they have been touting for years with the “Simplicity Guaranteed” label, but has not done any of the heavy lifting required to support the long-term strategic vision of sustainable growth through exception customer experiences.
Marketing strategist Scott Glatstein suggests five steps for building a strong brand and optimizing customer experience:
- Identify your reasons to believe.
- Identify customer touchpoints.
- Determine the most influential touchpoints
- Design the optimal experience
- Align the organization to consistently deliver the optimal experience
Reasons to believe are those things that the customer experiences that support the brand promise. Circuit City has decided that Simplicity is one of their reasons to believe, but they have not executed any of the other steps suggested by Glatstein. Without those crucial components, the customer experience can easily fall short of the brand promise. Here’s an example:
We made the purchase and left, with tab in hand, for the local store. When we arrived, the iPod was waiting for us as promised, but there was no $15 iTunes card. Our concerns about the conflicting offers are validated and we are now entering confrontation zone.
We showed the tab to the customer service associate who wasn’t sure how to deal with the situation. Someone else was brought over to correct the problem. He suggested to “return” the web order and resell it to get the iTunes deal. The CSA did that, but in doing so, the price went back to the advertised price of $149.99. The CSA called the assistant back and the process of “fixing the order” began. At one point, we were told that we owed another $0.70. At another we were going to get $).09 back. Clearly, the front line associates; the ones that come face-to-face with the customers every day, are not prepared to deal with this problem. The processes have not been optimized to deliver a great experience.
With the line backing up behind us, the CSA team finally found a way to make deliver the transaction with the free iTunes card at the price advertised on the website. The total in-store transaction time was over 20 minutes. Our expectations were not met and the other customers in line behind us got to share our experience as well.
So did Circuit City satisfy their 24/24 guarantee. Technically, yes as the web order was ready in less than 24 minutes. Did the experience reflect “easy to shop, easy to buy”? Absolutely not! Circuit City has not identified and evaluated all of their touchpoints against the “Simplicity Guaranteed” reason to believe. They have not designed optimal customer experiences that include these touchpoints, and they have not aligned the various channels and business functions to deliver an optimal experience. This may sound like an isolated incident, but it is not. Where else is dealing with Circuit City not Simple? How about rebates, scheduling an in-home service or getting a product repaired under warranty if you didn’t buy the extended service plan?
Circuit City was once a retail powerhouse. They practically invented the “Specialty Superstore” concept. Today they are struggling to remain relevant in what has become a commodity market. They have to compete with mass marketers like Wal-Mart and Costco who can price aggressively, niche players like Gamestop and Verizon who can beat them at the “authenticity” game and web marketers like Amazon and eBay who can always deliver a better selection and competitive prices. At $4.62, their stock price is trading a 52-week low and is flirting with a 5-year low. Circuit City will have to find a way to build a truly differentiated brand if they are going to survive. Simply adopting a new slogan that says you “make it easy for me” isn’t going to cut it. They must also consistently deliver a customer experience that supports the claim. Without that, the slogan only serves to set expectations that won’t be met and further erode the brand.
Many of you may have shopped Circuit City in the past couple of months. I would love to hear about your experiences and your ideas regarding how Circuit City could improve the customer experience.
To my regular readers, I’m sorry that the blog has gone a little stale over the past week, but I’ve been a bit preoccupied trying to find a new job. Nevertheless, traffic is way, way up on the Sprint post and I have been having lots of great conversations with people who have commented on it. In lieu of a new topic, which I promise to get to this week, I’ll pass on some of those additional thoughts from my conversations. Perhaps if Sprint were a Sense & Respond organization, they would be joining in the conversation or at least be actively listening. My guess is they’re not.
Of all the comments on the post, no one defended Sprint. To the contrary, all but one had negative things to say about them. The other guy just had negative things to say about female cellphone users. Thought certainly not a statistically valid sample, I would wager that few people really love their wireless provider. It’s the nature of the industry in the US. With limited competition due to the high cost of entry, the wireless providers aren’t compelled to differentiate on customer service and in my experience, Sprint is the poor service leader.
You may have noticed that this story has gone mainstream with coverage by the Associated Press, ABC News and Brandweek . The details, if you haven’t seen them are mind-boggling. David Reich wrote a great summary today on his blog, “my 2 cents”, but here’s the big thing to consider:
Out of Sprint’s 52 Million customers, only 1000 received the letter saying they were calling customer support too much. Do the math. That’s less than .002% of their customers.
There is no way that that small percentage was adding any material cost to their operation. (update: As a friend pointed out, the actual cost of these calls could have been material; however, the methodology for counting is unclear. For example, the ABC story indicates that a single call with 5 internal transfers might have been counted as 5 calls). Sprint says that, on average, these customers were calling in 40-50 times per month. Perhaps that’s true and given my personal experience with trying to get my own Sprint bill fixed, I can appreciate that.
Nevertheless, Sprint made the decision to go after them in a way that became very controversial, very public, very fast. The cost of this action in terms of bad PR is on par with Circuit City’s recent bungle. where they fired 3400 of their most experienced store employees to cut costs. Several months later they are still trying to explain that one, but it’s too late. In both cases, the damage to public perception has been done, although in Sprint’s case, it was pretty low to begin with and their defensive spin machine is just getting fired up. In my opinion, it was a failure of leadership in both of these companies to make such shortsighted decisions without considering how their customers would view them.
One of my conversations this week was with the Conversation Agent herself, Valeria Maltoni. She pointed me to a post she wrote about the wireless business in the US and speculates that Apple may be just the disrupter needed to shake up the industry. It’s a great post and has some David Letterman Top 10 humor to boot.
I was a Sprint customer for a while. I hated every minute of it. The coverage was spotty and their ability to screw up the billing month after month was unprecedented. Every month, I would call their support line, wait on hold for 30-40 minutes, and then have to explain the problem (usually se same problem as the previous month). Once the contract was up, I fired them. Today, Gizmodo is reporting that Sprint is firing some of their customers for, are you ready for this, making too many customer service calls regarding billing and other account info.
I’m not kidding! Here it is:
As outlined in letters to certain customers, Sprint is giving them 30 days notice and then they are shuuing off their phones. In a rare moment of weakness for cell phone carriers, Sprint is going to let these customers go without having to pay early termination fees of the last month’s bill.
I am amazed by the arrogance of this action. I’m sure these customers have nothing better to do than to use up Sprint’s valuable customer support resources day in and day out with their silly questions. I smell an orthodoxy here. Something along the lines of “these customers are bad because they cost us more than they generate.”
Sprint deserves some seriously bad press over this incredibly stupid approach.
Here’s my suggestion to Sprint: Before you start firing your customers, you should take the time to understand the source of the problem. It’s probably staring back at you when you look in the mirror.
Disney’s parks and resorts have a well deserved reputation for delivering great experiences. In tonight’s installment, I’ll give you a few more examples from my recent trip and also examine some experiences that don’t measure up to the Disney standard.
Extend the Experience
I have written about Disney’s Magical Express before. This is the service that basically extends your Disney experience all the way back to your home airport. It’s absolutely great when it works, but on the inbound leg of this trip, it did not live up to the Disney standard. I think the problems can be traced back to the fact that Disney does not operate this service. It is outsourced to a local transportation company and therefore is not directly managed by Disney. It’s not unusual for companies to outsource parts of their operation, but they need to be very careful about ensuring that the service provider is consistently delivering an experience that lives up to your brand. My wife and I came in on different flights. English was apparently a second language for my driver and so he was silent for most of the trip. The buses have TV screens and on previous trips, there has been either a movie like Snow White or a video marketing the Disney Vacation Club. On this trip, there was nothing. It was just a bus ride.
My wife and daughter arrived around 3:00pm. While their trip seemed to measure up to the Disney Experience, trouble was just around the corner. Knowing that their luggage was tagged and would be delivered to the room, we went to the Magic Kingdom for the evening. When we returned to the room at 1:00am, we discovered that our daughter’s suitcase was missing. With her in tears, we called the Magical Express people who were able to locate the bag at the airport in about 5 minutes. They brought it to the room around 3:00am.
There are controls built into this system that should have prevented this from happening. The bag had the Magical Express tag on it indicating who it belonged to and what resort we were staying at. It should not have taken a phone call for them to recognize and resolve the problem. Disney needs to do a much better job of ensuring that their service providers are consistently delivering an experience worthy of the Disney brand. On the positive side, my return trip to the airport was wonderful. The driver was one of the better entertainers that I had seen all week. Oh, and about the lack of movies on the inbound trip, the driver explained that it was a brand new bus (styled for the Disney Cruise Line), and the video gear had not been installed yet. Setting expectations is a good thing!
Let Me Co-Create the Experience
In recent years, Disney has incorporated more and more interactivity into their attractions. EPCOT’s Mission Space, for example, assigns roles and tasks to each of the riders on “the mission”. The Buzz Lightyear Astro Blasters ride in Disneyland allows you to not only rack up the points when you’re riding it in person, but also to participate through an online component. The Turtle Talk with Crush attraction uses digital puppetry to create a verbally and visually interactive animated character. A new attraction in Orlando’s Tomorrowland is Monsters, Inc Laugh Floor Comedy Club. Like TurtleTalk but on a much larger scale, the Laugh Floor features interactive animated characters, but in this attraction, Disney has gone one step further by integrating the use of cell phone text messages into the attraction. While you wait in line for the next show, you are asked to send text messages from your cell phone to the monsters, offering your jokes for the monsters to tell. I saw lots of people, mostly kids, texting jokes while waiting for the show. We did it; they used our joke and gave credit to our daughter. What’s really different here is the use of an independent, guest-owned electronic input device to influence the content of an attraction.
I’ll post the rest of my observations tomorrow, but in the meantime, think about how these points might apply to your business. If you are in the business of delivering experiences (hint… you are!), what are you doing to extend the brand experience beyond the boundaries of your physical or digital space. If you are using partners to deliver some of you brand’s experience, are they executing consistently and at a level that your customers expect? Are you engaging your customers by allowing them to help you co-create the experience? You should be.
Part 3 of this series is here.
Earlier this week, I wrote about the opportunities in addressing the sources of customer dissatisfaction. On Friday, APs Technology Writer, May Wong, published a report citing difference in the service levels between Circuit City and Best Buy. The report was insightful and absolutely reinforced the points I was making earlier in the week. I’m including some quotes and commentary below.
This customer’s past experiences have let him to solid opinions of the two retailers. Who do you think he recommends to his friends and family?
Ralph Devoe’s hunt for a new computer monitor didn’t include a stop at Circuit City, even though one of its stores was only a few doors down from the Best Buy where he went shopping this week. “They often don’t have what I want,” the retired physicist said. “And Best Buy just seems a little better. The salespeople actually know what they’re doing.”
Having a large inventory selection and “knowledgeable associates” are really important, but they are big and potentially costly things from an operational stand point. In my earlier post, I focused on the smaller sources of dissatisfaction, like how the customer is treated in the store. The following really drives that point home:
For sure, bargains and good rebates could be found at the stores of either chain — an important draw for the price-conscious American public.
But other times, it’s as basic as how a store feels, how the products and aisles are laid out, how the workers there treat you.
A friendly greeter is stationed just inside Best Buy’s front door.
“How’s it going? Welcome to Best Buy,” he repeats.
Within a minute of browsing in a section, a Best Buy associate swings by to offer assistance. The staffer casually dispenses product info or comparisons, and just as quickly lays back if you decline the help.
A visit to Palo Alto’s Best Buy and Circuit City to pick up a component-video cable illustrates the differences.
At the Circuit City, it took some effort to find a store employee to ask where to find the cables — and the red-shirted employee who was tracked down misdirected this shopper to cables for TVs.
At Best Buy, the greeter at the door quickly responded with a more specific question, “What kind of component video?” By asking, he learned the cable’s purpose was for a game console and pointed to the video game section.
The desired Sony-branded cables were sold out, but the Best Buy associate did double check the store inventory.
That kind of attention to detail goes a long way in a shopper’s experience.
I also talked about ensuring that your interactive displays are always functioning. Ms. Wong points out this difference between the two retailers:
At another Best Buy in Sunnyvale, for instance, the music MP3 players on display were in good working order, and a patron could test the controls and use headphones to listen to them. By contrast, the Palo Alto Circuit City’s portable players — with the exception of a separate display for Microsoft Corp.’s Zune player — were not powered and lacked headphones so a shopper couldn’t get a good test run of the devices. Product information placards were also missing from some models.
The bad news for Circuit City is that this “little stuff” is rampant throughout its stores and it all adds up to a pretty crappy experience for customers. Both companies recently reported results for the previous year and the differences were like night and day. I am not an analyst and I can’t tell you to what degree Circuit City’s continued lagging performance is attributable to the sources of dissatisfaction in their stores, but my gut tells me that it is a significant cause.
The good news is that these problems can be overcome and for the most part, the solution doesn’t involve a big capital investment. What it does require is much more valuable, and perhaps more scarce, than money. It requires people that care. Store associates that take the time to look for things that aren’t right with their store and fix them. Support associates that are not only responsive to the needs of the people in the store, but are proactively looking for ways to improve the operation so that the store associates can focus on the customer and not the infrastucture.
In an age where a single consumer can have amazing reach through social media, and where customers generally expect perfection, it is critical for retailers to understand that the first order of business should be to get the little stuff right. As pointed out in a recent story from mycustomer.com:
There is a line between brand reputation and common sense customer service that is becoming wider by the minute. While brands may aspire to having customers identify with that brand, it may be just as important to get the service basics right to close the gap between what the brand promises and what the customer actually experiences.
In January, 2006, the Verde Group and the Baker Retail School at Wharton released the results of a US study designed to better understand the effect of problem experience and negative word-of-mouth on the retail shopping experience. The study revealed ten key findings. Some of the big ones are:
- Chances of a smooth shopping experience are only 50:50.
- Half of shoppers encounter at least one problem when purchasing items – in fact, they encounter 2.7 problems on average.
- The retailer may be the last to know.
- Shoppers experiencing problems are more than five times as likely to tell a friend or colleague about it than to contact the company.
- When they talk, they talk.
- One in three disgruntled shoppers will complain to a friend or colleague but each one will tell an average of 4.1 people about their bad experience.
- Their word does carry weight.
- Almost half of shoppers have avoided a particular store in the past because of someone else’s negative experience. A similar proportion say they will avoid buying a similar item at the store, or visiting the store altogether, in the future.
- Bad shopping experiences are not easily forgotten.
- Almost half feel that a return visit to a store where a problem occurred would likely result in a repeat of the problem. And, one in five reveal some hesitancy – the problem may or may not occur again.
- Bad shopping experiences erode loyalty.
- Shoppers encountering one or more problems are less likely to continue shopping at the store, to recommend the product or item purchased to others, and are particularly less inclined to recommend the store.
- ‘Disloyal’ attitudes can have wide spread consequences.
- Customers revealing the lowest levels of loyalty will talk to the largest number of friends or colleagues about the problems they encountered.
Retailers spend significant time and money coming up with new and innovative ways to get their customer to Engage with them. Innovation programs to come up with that new winning idea have been all the rage over the last few years. But when was the last time you put yourself in the customer’s shoes and took a good, hard look at the little things that diminish the experience? That peg hook that has been empty for weeks (is the product “in the back”?); the interactive displays that aren’t working; or even something as simple as acknowledging the customer as they are coming in and out of the store. These little things, more than anything else, define a brand to the customer, yet some retailers never seem to be able to focus their resources there. Why is that?
It boils down to trust, reputation and word of mouth. Customers satisfied with the way they have been treated become the best ambassadors for a company, sharing their experience with friends, family and colleagues. Big, new ideas are great, but they will gain you nothing in the customer’s eyes if you don’t get the little stuff right first.
What are the little things that detract from your customer’s experience. What can you do about them?
In the interest of providing equal time, and to point out that other CE retailers struggle with delivering a great customer experience, I offer another customer video. While the filmaker’s work is not as impactful as the Circuit City example, you get to ride along and have the experience first-hand.
In the end, the same point is made: Customers are rising up and telling their stories and companies should be listening. This video, which was made a year ago, has been viewed over 3300 times on Google Video.
The power of the internet and personal media tools has forever changed the balance of power in favor of the customer. One Man’s Voice can be heard by millions. Here’s a story that I think really drives that point home.
A few months ago, I contributed content to a presentation initiated by David Armano. David is the Creative VP for the marketing firm Digitas. He is also a very influential blogger who is well known for creating simple but powerful graphics to communicate his ideas. The presentation, entitled “2006 in Your Words”, was a collection of insights and opinions about what the year’s big themes were from a marketing and communications standpoint. To demonstrate the power of Web2.0 collaboration, the presentation contained content from little fish like me as well as some industry heavy hitters. You can see the presentation here.
“We have been shifting media power to individuals for years now. Perhaps it started with the VCR. The internet shifted control of retail to the customer years ago. Today, individuals have the power to control markets, create and distribute their own content, build and occupy virtual worlds with new opportunities for commerce and entertainment. They don’t have to rely on some corporation to provide the experiences for them. They simply use the new tools, which they are mastering as fast as the tool developers can build them, to build whatever they want, to be whoever they want to be and to let their voice be heard.“
Why am I telling you this? I work for Circuit City Stores and have been helping the organization become more adaptive through the use of social media tools. Last night I came across a number of user generated videos about Circuit City. Some were commercials, done by associates, which is interesting in itself,
But then I found this
You should watch it all the way to the end. It’s powerful! As a company, we are determined to become great at providing exceptional customer experiences. We are making progress towards this goal, but this statement from one man points out how difficult that journey will be and how much harder we need to work to get there.
Corporations need to realize that today’s customer expects perfection and has an increasingly loud voice that can potentially reach very large numbers of people. They are actively sharing their experiences and feelings to anyone who will listen. We should be listening to them!
You’ve worked hard to create a great customer experience that defines your brand. You’ve been a leader in differentiating your offering from the competition and have made significant investments to maintain that advantage. You have maintained your focus on your core business by partnering with others to deliver the services that they have expertise in. But do they share your passion for delivering the great experience? Is ensuring that your customers have the best possible experience their top priority?
Working in retail, I can site any number of cases where the partner doesn’t deliver on the brand and I am personally in the middle of one of those cases right now.
Two weekends ago, I decided to purchase a device to allow all the computers in the house to share our new laser printer. I found what I wanted at Amazon and the price was right. During the checkout process, Amazon asks if I would like to save $30 on the purchase by opening an Amazon Visa account. $30 off a $65 item??? Heck yeah! I LOVE AMAZON. So I click the button. I am magically transported to a Chase Bank page where I fill out all the important info. I click Submit and proceed to the checkout where I expect to see my new Amazon account listed as an option.
OK, here’s where things start to fall apart. I see Amazon Visa as an option, but it wants my account number. Hmm, OK… I know how these things work. There will be an e-mail congratulating me on my new account, so off I go to my mailbox. That’s odd, no e-mail. Shouldn’t there at least be be something that says “thanks for your application, were looking at”? If the internet is indeed just a series of pipes, then perhaps the pipes are clogged. I decide to turn my attention somewhere else and come back to this later. This is the internet equivalent of getting fed up with a ridiculously slow line and walking out the door of a real store.
ATTENTION AMAZON: I have now left your store without making a purchase!!!!!
I tried to call the Amazon Credit Card Customer Service number, but apparently they only work weekdays buring “normal business hours”. Obviously, no one shops on the internet at night or on weekends.
On Monday morning, I reach the Customer Service department, which I suspect is outsourced by Chase to some third party provider. They see where I have an application pending, but cannot provide any additional information other than to say that the approval process can take up to 30 days. WHAT??????? 30 DAYS to approve a credit card??? Isn’t this the same Chase Bank that sends me offers for new credit cards every week?. Is this not the 21st century? Aren’t credit applications processed by computers?
At this point, I could simply purchase the item from anywhere else, but I am so amazed at how poorly Amazon and Chase have handled this experience so far, that I decide to stick it out to see how (if) it gets resolved. I check back periodically during the week and it is now Sunday night, and I still have not received any notice one way or the other from either Amazon or Chase. The item is still in my cart, but the price has increased by $4.oo since I first selected it (another annoyance). I’ll provide updates to this post as the story develops.
Why do companies let these little annoyances happen to their customers? Dissatisfaction is the big Loyalty Killer. Sure, I’ll probably still purchase from Amazon, but I am not likely to click on any of their added value services because I don’t trust them (or should I say their partners) to be able to execute. In retailing, those added services are where the margin lies. In my world, that’s the extended warranty, the credit and the installation services. Ironically, it’s the delivery of those services that are most frequently outsourced to third parties; organizations whose priorities ae frequeently not aligned with mine.
Is your organization using partners to deliver on your brand’s experience? How well are they living up to your customer’s expectations?
I’ve been meaning to write this for weeks. Thankfully, Randy Saunders over at the Perfect Customer Experience has done much of the work to make my case in his recent post. The focus of this rant is Macys, or more accurately, Federated Department Stores, who in 1994, acquired the brand. Shortly after, they began the process of rebranding all their other holdings to the Macy’s name in order to facilitate a national brand advertising strategy.
Macy’s had been through rocky times in the 80′ and eventually filed for bankruptcy in 1992. Nevertheless, millions of Americans who lived in markets served by one or more of Federated’s other brands, typically viewed Macy’s as something more than the mid-level department store that it really was. Chalk this mystique up to the annual Thanksgiving Day parade which prominently features their Herald Square flagship store. To those folks who had never been in a Macy’s, this magnificent store was Macy’s.
I live the mid-Atlantic, where the Hechts brand has ruled for many years. In 2006, we learned that our Hechts were to become Macy’s. Unfortunately, the change did not deliver something better than what we already had. I had hoped that the change would bring some of the higher end fashion lines that I had seen in the flagship store. No such luck. In fact, prior to the changeover, they actually began eliminating some of the more interesting lines of mens clothing in favor of more of the same conservative stuff that you can get anywhere in central Virginia, and house brands. I used to shop at Hechts frequently. Since the changeover, I have been in Macy’s twice and will likely not go back.
This may be just my experience, but I have suspected that many others have been experiencing the same thing as Federated has been renaming all of their holdings. Randy’s post seems to back that theory up:
A new report from Dana Cohen, managing director of Bank of America Securities reduced Federated from a recommended “buy” to “neutral,” in part because of flagging sales at Marshall Fields and other ex-May stores. Although Federated’s legacy Macy and Bloomingdale’s stores reported a 4.4 percent gain, the same-store sales at hundreds of former May Department stores were down by 11 percent.
The report said some possible contributing factors included the sudden conversion of all May nameplates and changes in product assortments emphasizing Macy’s private brands and downsizing some national ones.
“The key issue we are facing is that management miscalculated the impact of these changes,” said Cohen.
Another report drom WSL Strategic Retail suggests that converted May locations may have lost 10-20 percent of their shopper base from a year ago because “They are asking shoppers around the country to give up a brand that a lot of them have had for a long time and have been emotionally attached to, whether it’s a store or product brand.”
Local brands under Federated worked. Tey were more expensive to operate with national brands and on economies of scale for national advertising, but the customers generally liked what they had. Federated’s strategy ignored the customer and the results speak for themselves. To many, the Macy’s name brought high expectations, but in the end, has not delivered and that’s how you destroy a brand.