Happy Thanksgiving

Indulge in memories, indulge in family, and indulge in food.

And may your Thanksgiving be filled with special moments warmed with happy traditions and joy.




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The Beginning of the Shopping Season

Last month we predicted that sales for the Holiday Shopping Season, which officially kicks off this Friday, the day after Thanksgiving, would be higher than last year. We were dead-on (no pun intended) in terms of sales predictions for 2008, the worst holiday season in decades – down nearly 4%.

But given that consumers are less frightened than they were earlier this year, and have spent the past 10 months honing their value-for-dollar skills we’re expecting slightly higher sales. Two-percent higher. OK it’s not much higher, but better than nothing – or more decreases.

We expect that continued deep discounts will lure shoppers after more than a year of subdued spending. After all, kids outgrow clothes, things wear out, and fashions change. It’s the holidays and people want to celebrate somehow – even if it’s in more economic ways. Then there’s the fact that there’s a certain velocity to actual consumer needs, which ultimately requires satisfaction. Even at a lower price points and in smaller numbers. But as we predicted, it will not be the kind of bumper holiday season as we’ve seen in the past.

To kind of prime the sales engine, retailers and Web sites dedicated to Black Friday deals have leaked sales plans earlier than usual hoping to kick-start demand for flat-panel televisions, toys, clothing and other goods. Here’s where consumers say they’ll be shopping.

Discount Dept. Stores 93% (up +3% from last year)
Traditional Dept. Stores 72% (+2%)
Online 95% (NO CHANGE)
Specialty Stores 25% (- 5%)
Catalogue 75% (+5%)

Well, while everybody likes to be on the sales, but nearly two-thirds of the consumers surveyed (65%) indicated that they started holiday shopping much, much earlier than in recent years, well before the traditional “Black Friday” or “Cyber Monday.”

Retailers have to run as fast as they can to keep up with our 21st century “wise shoppers.” The wiser ones know that the early bird may get the worm, but it’s the second mouse who gets the cheese, so keep watching for even more sales!

Everyone at Brand Keys wishes you and yours a Happy and Fulfilling Thanksgiving.



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The Big Book of Dreams Goes Online

J.C. Penney’s Big Book won’t be available in hardcopy much longer. A victim of shoppers' growing reliance on the Internet, the 1,000-page retail advertising touch point became obsolete. The 2009 Fall/Winter catalog will be its last of its semiannual, telephone-book-sizes kind.

And while saving all that paper helps to reduce the company’s carbon footprint, it also seems to have also declared the catalog an outdated way to shop. Mike Boylson, Penney's chief marketing officer noted, "It became a very ineffective way to communicate to our customers." So they’re going to do something else.

These days we suggest predictive engagement assessments can identify precisely how consumers shop and can help eliminate issues regarding uncertain values attributed to one medium over another. In the Penney case, people were going to their site and not using the toll-free 800#. Maybe consumers used the Big Book as a way of engaging with the retail brand and identifying products they wanted. Maybe they didn’t feel like filling out the printed form. Maybe it just had to do with how people buy, not how they’re actually engaged.

Real engagement assessments regarding appropriate category media means that one can create predictive media plans based on real marketplace effects, and not data base assumptions. It’s a way a media platform – any media platform – can prove their right to a preferred place at the buying table by demonstrating their impact on brand and sales.

For example, thinking about the very general category of “Fashion Retail,” here’s how the top-5 media touch points contribute to sales:

1. Cable TV - 15%
2. Magazines - 11%
3. At Retail - 10%
4. In-Store Promotion - 8%
5. Catalog - 5%

When you consider all the touch points available, not to mention the ones retail marketers actually use, catalogs don’t look so bad from an engagement POV.

There were some who regarded catalogues as yearbooks of American Life, and will miss them, although it shouldn’t come as a surprise that the digital world and what we knew continue to collide. After all, the Internet has been said to have been designed to withstand wars – even those between competing media formats.



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Price Pointed Shoes

Marilyn Monroe noted, “I don’t know who invented high heels, but all women owe him a lot.” Yesterday, women mirroring the sentiment stood in crowded lines in the rain for 14 hours for a chance to slip into a pair of Jimmy Choo’s shoes. Why the sudden run on the coveted brand? Because these shoes were made especially for H&M.

In one of the fashion events of the season for “recessionistas” (fashionistas on a budget), Jimmy Choo collaborated with H&M to create a lower-priced line of its shoes, with no pair costing more than $300.

As we do not track the category, we cannot comment about the engagement and loyalty levels of high-fashion shoe brands. We do, however, observe that on the basis of H&M's history with other fashion collaborations with designers like Karl Lagerfeld, Roberto Cavalli and Stella McCartney, H&M has managed to establish a differentiated brand image in their portion of the retail world. Current Customer Loyalty Engagement Index rankings for apparel retail brands stand as follows:

1. J Crew
2. H&M
3. Aeropostale
4. Victoria's Secret
5. PacSun
6. Old Navy
7. American Eagle Outfitters
8. Abercrombie & Fitch
9. The Gap

OK, so while H&M didn’t have Michelle Obama standing on line or acclaiming the value-for-dollar merits of the brand on network TV, the Jimmy Choos sold out in no time.

But, as we have often pointed out, 21st century shoppers are nothing if not savvy, and knew where to go to find their H&M Jimmy Choos: eBay. Less than a day after H&M’s sale began, hundreds of pairs of shoes wound up on eBay with bidders offering up to twice the retail price.

This is just more evidence that it’s not price, but value for dollar, that is in play in the world of brands—and it is meaning that is a surrogate for that value—proving that you have to stand for something out there, especially when you’re standing in high heels.



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Remembering to Ring The Register

A recent article in the NY Times heralded the move The Week magazine is taking to help its advertisers get a better night’s sleep: guaranteeing consumer recall of its advertising. The promise? Consumers in focus groups will either remember seeing the ads, with The Week showing up in the top-third of magazines where they saw it, or the ad runs free until it reaches the metric promised land.

The problem—for advertisers, that is—is that recall is a very limited measure, and is more a gauge of an ad’s entertainment quality or sometimes shock value than it is anything else. In fact, whether or not a reader remembers seeing an ad tells you absolutely nothing about how successful that ad will be for the brand. Awareness of advertising is the cost of entry for an ad, and translates simply into an opportunity for an advertiser to communicate—nothing more. What advertising must do with that opportunity is move a reader closer to the brand in some meaningful way that will lead to a transaction—that pesky thing that keeps brands, and media outlets, in business.

It is no surprise that media companies are reaching beyond demographics to sell advertisers on buying time or space on their vehicles, as media platforms and venues proliferate. While we applaud that leap off the ice float that is carrying magazines ever further away from the brands that need a reason to choose them, guaranteeing recall is not the answer for advertisers who are struggling daily with how to engage with a consumer with an increasingly sophisticated advertising detection system.

Measures of authentic consumer engagement with one publication over another is what will bring advertisers running back to those titles that deliver more than women ages 25-40 to its pages. These metrics not only exist, but have been proven to correlate to in-market results—aka, sales—and can be employed before the spend, creating a true point of differentiation for a magazine in today’s engagement marketplace.

And while that distinction may mean little to readers, to advertisers it is sure to be something to remember.



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Brand Assurance and Engagement

"Now finance or lease any new Hyundai, and if you lose your income in the next year, you can return it with no impact on your credit."

With that audacious statement on Super Bowl 2009, Hyundai began a full-out assault on the economy, consumer anxieties, and a mediocre car brand image. The campaign was the beginning of a drive from a price-value brand, to a mainstream, value-for-dollar brand.

The rest, as they say, is history: Consideration for new Hyundai vehicles jumped to nearly 60%. Hyundai's market share jumped to 4.3% and while the industry suffered a 22% sales drop, Hyundai increased by 27%. So it wasn’t too much of a surprise that this week an Advertising Age Reader Poll named Hyundai the “Marketer of the Year.” Hyundai, was also Brandweek’s “Grand Marketer of the Year” back in September.

But if you want predictive metrics and not rear-view mirror ones, you need to look at measures of brand loyalty and engagement. Hyundai moved up on the Brand Keys Loyalty Leaders List of 440 brands to 24th. That’s up from 295th last year, which only proves that if you can differentiate your brand emotionally consumers will engage with you in the best of all possible ways: sales!

Consumers could always find cheap cars, but real emotional engagement has been pretty sparse in the automotive category of late. “Anyone could have done it,” you say? Well, maybe, but as we’ve pointed out before, saying it, doing it, and doing it believably are three different things. Without real engagement, it’s just words, sounds, and wasted marketing dollars.

Thoreau advised, “live your beliefs and you can turn the world around." Sometimes whole industries, too.



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Keeping Your Brand From Going to the Dogs

Voltaire suggested that animals have three advantages over man; no theologians instruct them, their funerals cost nothing, and they don’t start lawsuits—the latter of which a certain pet supply company now wishes was true.

Burberry, taking a cue from other fashion brands, is cracking down on companies who copy their logo. All about protecting its checkered pattern, the famous “Burberry Plaid" —an emblem for the fashion house for almost 100 years— Burberry is suing a pet supply store in England, called “Pets at Home.” Turns out that the company is selling dog coats, baskets and carriers in a plaid design very close to Burberry’s signature plaid. So much so, in fact, Burberry alleges that the retail store was actually violating copyright laws.

Although the items have been taken off the shelves, the lawsuit is ongoing, as likely recommended by its solicitors. According to the Brand Keys Fashion Brands Index, Burberry is among the top-10 fashion brands most resonant with 21-34 year olds and is in the top-15 among the 35-44 and 45-60 year age groups.

Those are nice loyalty rankings for a brand because with the consumers’ shift away from the traditional ‘price-value equation’ to one of ‘value-for-dollar,’ the brand itself – in all its manifestations – can act as a surrogate for real value. And given the economy, weak retail reports, and even weaker predictions for the upcoming holiday season, that makes it any leverageable brand differentiation especially worth protecting.

Brand loyalty assessments are leading-indicators of consumer behavior toward a brand and they correlate very highly with profitability. So it’s worth noting that last month Burberry announced that their six month revenues were up 14%, with its signature check continuing to be leveraged throughout its wide range of merchandise.

When it comes to design and fashion, “Pets at Home” might well benefit from the advice of another Frenchman, Honoré Balzac, “You may imitate, but never counterfeit.”



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El Propósito del Negocio es Crear y Guardar a un Cliente

That’s Spanish for management guru Peter Drucker’s advice to marketers: “The purpose of business is to create and keep a customer.”

If you follow that precept, it translates to keeping customers loyal to you and Brand Keys relies upon a loyalty framework because loyalty is a leading-indicator of consumer behavior and, if you do it right, profitability.

We translated Mr. Drucker’s admonition because today we are proud to announce the results of the 1st Brand Keys Customer Loyalty Engagement Index in Spain at the Club Financiero Genova in Madrid.

The survey was done in conjunction with Asociación de Marcas Renombradas Españolas (The Brand Association of Spain), Accenture Marketing Science, and Positioning Systems, Brand Keys’ marketing partner in Spain. For this year’s survey, ¬¬¬3,500 Spanish consumers, 18 to 65 years of age, self-selected the categories in which they are consumers, and rated the brands for which they are customers.

We looked at the loyalty and engagement marketplace in Spain, examining 50 of the top brands and their category drivers including Zara in Retail Apparel Stores, the Real Madrid soccer team, Iberia Airlines, Carrefour (Hypermarkets/Department Stores), BBVA in the banking category, and BP gas stations.

The category drivers – and the category and customer attributes, benefits, and values they consist of – are critically important to understanding brand loyalty and getting it right when dealing with today’s consumers. Properly configured, category loyalty drivers will tell you far more than who a consumer is – the typical demographic and attitudinal point-of-view. They tell you what you really need to know as a brand: how consumers will actually behave in the real marketplace, which matters if you’re keeping score by counting your sales and profits and not merely brand awareness or recommendation levels.

The Brand Keys Customer Loyalty Index of Spain may be new, but the lessons that can be learned from loyalty and engagement aren’t. Another management consultant – W. Edwards Deming – wisely noted, “Ganancias vienen de los clientes leales quienes compran otra vez, clients que jactan de su producto o servicio, y esto atrae amigos” (“Profit in business comes from repeat customers, customers that boast about your product or service, and that bring friends with them.”).

And loyalty always translates into profitability – no matter what language you speak.



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