The Un-Dead Cola

Here’s news for anyone thirsting for a beverage consumed by the undead. The once-fictional – now very-much-alive – “Tru Blood” beverage from the hit HBO series, "True Blood," will come alive this September.

Omni Consumer Products have cut a licensing deal with HBO and have crafted the new beverage to replicate the appearance of the synthetic blood beverage the show’s vampires consume for sustenance – when the real thing isn’t available.

At $16 a four-pack you’ll pay a high price for fictional immortality.
The company said that the blood-orange carbonated drink would have a “crisp, slightly tart and lightly sweet tang” (but no bite) so it should compliment most foods.

It just doesn’t go well with stakes or garlic!



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When Kmart Wine Just Won't Do

Wal-Mart is applying for a permit to sell beer and wine at its Supercenter in Mountain Home. This application comes 7 years after the company withdrew a similar request when local churches and the city's government complained.

Wal-Mart spokesman Kelly Cheeseman says the company is again asking for a permit because of customer requests. Since the original application there has been some conjecture that as well as selling wine, Wal-Mart may even offer up it’s own brand at an “affordable price.”

Connoisseurs and gourmets may not be interested in the offering, but there has always been a market for inexpensive wine, and, as distribution isn’t a problem, the critical issue for Wal-Mart may just be finding the right name. Consumers offered up the following:

Peanut Noir
NASCARbernet
World Championship Riesling
Big Red Gulp, and
Nasti Spumante

The Greek dramatist Aristophanes commanded, “Quickly, bring me a beaker of wine, so that I may wet my mind and say something clever.”

You may soon be able to find that in aisle 7.



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When Acquisitions Fit Like A Glove (or a Shoe)

Amazon.com, the online provider of most everything, is buying Zappos.com, the online shoe retailer. The deal is said to be worth about $850 million -- $807 million in stock and about $40 million in cash and stock to Zappos workers.

If this is reminiscent of the deals that were being done during the ‘90’s theres no surprise there. The only difference between a lot of those and this one is that the values of the two entities fit like a hand-made shoe.

Both online entities are known for building communities, and loyal communities at that, and both have imbued their brands with levels of customer service that actually exceed expectations. That’s a tough thing to do in any economy, but especially in one where what a brand believably stands for has become a surrogate for real value.

There’s an old business adage that goes “Always put yourself in others' shoes. If it hurts you, it will probably hurt the other person, too.” The same is true about brand acquisitions, because if the brand values don’t fit, customers will just walk away.



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If You Don’t Take Care of Your Customer, Somebody Else Will

A friend in the restaurant business confided over a bottle of wine that he could always tell when a restaurant was in trouble. Deftly peeling back the linen of the breadbasket, he pointed out that the rustic bread had gone missing, replaced by a de rigueur white rolls. Finding the salad’s goat cheese was now a game of hide and seek. The little things lead like breadcrumbs to the same old story: a retailer fighting for its life not by dialing up a customer’s pleasure, but by diminishing it, ingredient by ingredient, value by value, service by service.

There is a lesson in there for retail brands as they find their way to the new consumer in the new marketplace. No one would even begin to call it easy out there as stores struggle to stay afloat with tighter credit, excess inventory, and often more salespeople on the floor than customers, all accompanied by a distinct lack of service and deliveries that are late, misaddressed, or merely forgotten. But the reaction to cut back on what pleases the customer, and think it goes unregistered, is so misguided an approach it deserves comment — especially because our data show that every year it is the shopping experience that continues to drive what value in retail is really all about.

Price (or even paying a bit more) is not the central issue. It never was. It isn’t now. If price were all that mattered, we would all be driving Hyundai Accents. Value is what matters — it just matters more than ever now as a new consumer consciousness, born of this year’s hard lessons, takes the helm.

Our 2009 Customer Loyalty Engagement Index rankings for the retail department store category shake out like this, but the differences between retail brands grow smaller and smaller, while the gulf between what customers expect and what stores deliver gets bigger and bigger:

1. Kohl's
2. Macy's
3. Sears
4. Dillard's
5. Marshall's
6. JCPenney

Yes, it’s harder out there. No doubt. But as management guru, Peter Drucker, wisely noted, satisfaction and quality and service is not what you put into it. It’s what the customer gets out of it. And diminishing the shopper’s experience won’t make it easier, though it will eventually make the problem go away entirely – along with the customer.



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Weed’em and Reap!

Smith & Hawken, the upscale garden retailer, is closing all of its 56 stores. With retail sales remaining weak, especially in higher-end goods, Smith & Hawken is another casualty of the recession, a fiercely competitive marketplace for home goods, and where consumer expectations that have been growing like, well, weeds.

Scotts, the company that sells brand name lawn and garden products including Ortho, Miracle Gro and Roundup bought Smith & Hawken in 2004 for $68.5 million. According to their now-defunct web site, Smith & Hawken has already stopped taking online orders. Its company spokespeople report that the retail chain "has not been profitable since we purchased it," apparently the antithesis of the biblical business maxim, “as ye sow, so shall ye reap.”

This most recent failure in luxury retail is a combination of a brand pushing the limit to higher-end goods at a time when the economy has consumers looking for quality and value. It turns out these days consumers believe a trowel is a trowel no matter how ergonomically designed, and is, apparently, not worth $25 or more. And it turns out that there is an actual ceiling for teak garden benches.

Customers who used to be loyal to Smith & Hawken cultivated relationships with other home and garden improvement providers who better met their expectations, and are growing share and reaping profits. According to the Brand Keys Customer Loyalty Engagement Index they rank as follows:

1. True Value
2. Ace
3. Lowe’s
4. Home Depot

There’s an old adage that goes “old gardeners never die . . . they just go to seed.” The same, alas, cannot be said for brands.



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Guess Who’s Skating Into Town?

Tim Hortons Inc., the company founded in 1964 by NHL hall-of-famer Tim Horton, former hockey player for the Toronto Maple Leafs, the New York Rangers and the Buffalo Sabres, just started serving its premium coffee and fresh baked goods for the first time in New York City. They’re entering the New York City market with 12 new locations, including 10 in Manhattan.

Tim Hortons has more than 500 locations in the U.S. and sells about two billion cups of coffee annually. With 3,000 stores in Canada, they account for more than seven of every 10 cups of quick serve coffee sold in Canada, but Manhattan poses a challenge with an already over-caffeinated market. Both Dunkin Donuts and McDonald’s have more than 100 locations within five miles of each other, while Starbucks has more than 80.

But it’s not all about the real estate. Something else drives customers, more than convenient locations. It’s the “something else” that showed up in our metrics three years ago, allowing us to predict the decline of Starbuck’s before anyone would believe it. Let’s just say here that it’s a lot more centered around customer experience than it is what corner you’re standing on.

This is how the brands currently rank in the annual Brand Keys Customer Loyalty Engagement Index:

1. Dunkin’ Donuts
2. McDonald’s
3. Starbucks
4. Krispy Kreme

Should the new team worry current players? Well, for the six months that ended in February, Dunkin’ had posted a 9% growth in system-wide sales and a 4% increase in U.S. same-store sales. For that same period, Dunkin’ Donuts had total sales of $1.55 billion, and offered such new items as caramel iced coffee and an expanded rollout of scones.

But McDonald’s is expanding the coffee portion of its business in the U.S. and Canada too, and has installed McCafe mini-coffee shops featuring recreational coffee beverages at more than 10,000 U.S. restaurants, will test its in-store McCafe coffee shop concept in Canadian locations later this year. McDonald’s also recently launched a promotion for its Premium Roast coffee in Canada and yesterday, McDonald’s began a U.S. summer promotion called Mocha Mondays that gives customers a free iced or hot mocha beverage at participating stores on Mondays.

Meanwhile, Starbucks, once first in our rankings, reported reductions in net revenues, comparable store sales, operating income, operating margin, and net earnings during Q2 2009, and is continuing with plans to close about 800 company-owned stores in the U.S. this year. But they’re offering iced cream now, and via Facebook is promoting their ice cream by offering 20,000 pints of ice cream each day, at a rate of 800 per hour. This offer ends July 19.

Krispy Kreme isn’t faring a whole lot better. They slipped slightly for the entire system, of which company-owned stores account for 29%, and same-store sales are down 2.4% for combined company-owned and non-company-owned -- and that's after closing what supposedly were their “bad” stores. At the company's annual meeting, Krispy Kreme says it's planning to test "proprietary" ice cream in stores in cones, cups and shakes. And a doughnut sundae.

Advice for Tim Hortons? Well, hockey great, Wayne Gretzky noted, “Some people skate to the puck. I skate to where the puck is going to be,” and the same is true about engendering loyalty. If you have predictive consumer metrics you always know where consumer values are going to end up. And winning and keeping customers is a goal to which every brand should aspire.



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If U Cn Txt This U Cn Gt a Gd Job

OMG, the British mobile phone content provider Teimlo is looking for a new marketer. British-based candidates can apply but no 4NRs, and the company will only accept a 160-character text message job application. Candidates who make the shortlist will get a text ACK (acknowledgment) indicating YTB (you’re the best) with a request for additional 411 (information).

AAMOI (as a matter of interest), more than 95 million people text regularly, so abbreviations, acronyms, and text shorthand have become common communication techniques.

The announcement on the company’s website indicated that they were looking for candidates who can conduct BAU (business as usual) by mobile, indicating, "If you are qualified, sassy, good with words, dynamite at events, Adobe compatible, having working knowledge of mobile and social mobile, and are a determined multi-tasker and networker we want to hear from you."

Candidates who make the shortlist will be asked to send in their full CVs and then may be invited to a face-to-face interview. Given the high tech nature of the job search, we would have bet the follow-up would be a video chat, because as the Peter Steiner cartoon goes, on the Internet, nobody knows precisely who you are! KNIM?



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Support Your Local Brew

As we come back to work after the Fourth of July weekend, we were struck by the fact that this particular weekend continued to be the biggest beer-selling holiday of the year. Supermarket sales were estimated to be nearly 26 million cases of suds!

OK, so beer didn’t contribute to the War for Independence in ways like, the Minute Men, or Paul Revere, at least none of the history books we checked indicated that fact, and on top of that, it’s kind of hard to figure out which brands are brewed by American companies any more. But as Benjamin Franklin noted, "Beer is living proof that God loves us and wants us to be happy,” and he ought to know. He was there. So it seems a pretty cool way to celebrate almost anything, including liberty and self-determination.

Want something more to drink to? Beer – and the beer industry – does, in fact, contribute heavily to our nation’s economy. The beer industry supports over half a million beer-providing retailers, creates nearly 2 million jobs, generates almost $200 billion, and the industry's economic ripple effect supports other industries like agriculture, manufacturing, construction, entertainment, and transportation.

On the quid pro quo side of the bar, want to know which beers – American and import – consumers thank most with their hearts and wallets? According to our Brand Keys Customer Loyalty Engagement Index, they rank like this:

Beer (Light)

1. Coors Light
2. Miller Lite
3. Bud Light
4. Amstel Light
5. Michelob Light

Beer (Regular)

1. Sam Adams
2. Budweiser
3. Heineken
4. Corona
5. Miller Genuine Draft
6. Coors
7. Beck's
8. Michelob

No version of Poor Richard’s Ale showed up on this year’s list, but whichever brand of beer you prefer there are two obvious reasons for drinking it: one is when you are thirsty, to cure it, and the other, when you are not thirsty, to prevent it.



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Happy Fourth of July!

We wish you and yours a safe and happy 4th of July!

See you next week!