Amazon.com CEO Jeff Bezos has just released a long video in which he rhapsodizes about the history of Amazon.com – including early troubles with technology… and even elecricity. At 8 minutes plus, sale this DOESN’T qualify as an elevator pitch. Then he eventually gets around to announcing his company’s all-stock aquisition of online shoe retailer Zappos.com. The full TechCrunch Newsflash is here.
From the other side of the acquisition, Zappos.com CEO Tony Heish has posted this letter to employees explaining the aquisition. It’s a serious letter, but also manages to be light, breezy-but-informative piece that speaks to the corporate brand culture Hseih has built at Zappos. Just what you’d expect from a guy with a Zappos logo tatooed to his head.
But one thing that caught my attention was this:
We learned that they truly wanted us to continue to build the Zappos brand and continue to build the Zappos culture in our own unique way. I think “unique” was their way of saying “fun and a little weird.” 🙂
The Zappos brand will continue to be separate from the Amazon brand. Although we’ll have access to many of Amazon’s resources, we need to continue to build our brand and our culture just as we always have. Our mission remains the same: delivering happiness to all of our stakeholders, including our employees, our customers, and our vendors.
So what do you think?
Cynical DIFFERs, how long do you think this will last before Zappos.com is absorbed into Amazon?
Hopeful DIFFERs: is this the greatest thing you’ve ever heard?
Coffee giant tries to get their mojo vibrating again
Once, Starbucks was just a local coffeeshop in Seattle. Then it became a mega-brand, standard-bearer for the premium coffee category worldwide. But lately, the “star” has been fading, and even the “bucks” are drying up. So now the chain will be re-launching a few of its many under-performing stores under a new name – and it ain’t “Starbucks”. Brand seppuku, brilliant extension strategy, or just a curious experiment?
Many little rocks; one Goliath target
I won’t spend a lot of time documenting all the many woes of Starbucks – from closing 1000 stores worldwide over the last few years, to endless streams of controversy , to an actual bombing this year at a Manhattan Store. The bigger story is actually thousands of small stories: how Starbucks is being beaten in the ground wars by smaller, more flexible, more community-minded local shops – like Ottawa’s fair trade coffee champs Bridgehead (of whom I’ve written at length in another post).
Starbucks’ erstwhile strength – ubiquitous presence in major markets worldwide – has almost become an Achilles Heel. Comedian Lewis Black thinks it is surely a sign of the end of the world (WARNING: contains hilarity – may not want to play this in a cubicle):
They’ve been fighting back of course, with their new “Starbucks™ Shared Planet™” brand and a pledge to apply renewed attention to three big perceived areas of weakness:
Ethical sourcing – to answer the Fair Trade movement, which, because of their size and massive bean-supply-chains, they have been slow to embrace. Notice they still don’t call it “Fair”;
Environmental Stewardship – to try to get back some of their tree-hugging mojo; and
Community Involvement – to fight the idea that they are the rapacious corporate villains strip-mining local economies and ruthlessly targeting competitors without giving much back – largely fair complaints.
In which the corporation offers to share… the planet
These three principles are embodied (and proclaimed loudly) in three new Starbuck’s branded “Green Stores” , the first of which opened July 1st at Paris Disneyland (of all places Press Release / Pictures)
At Brandvelope, of course we think all this is great. We’re sure Starbucks is sincere in their commitment to these ideals, and we applaud the incremental steps they are taking in this direction. The problem is their ability to move their Titanic-sized infrastructure to match their ocean-sized ambitions, and navigate around the great big pointy icebergs they face.
For example, Starbucks™ Shared Planet™ says “by 2015, we want to: Purchase 100% of coffee through ethical sourcing practices.” Great. But in the intervening 6 years, a goodly chunk of their coffee will come from, um, less-than-ethical sourcing practices, while local chains (like the Bridgehead where I’m sitting right now) are already at 100% and have been for years. And they’re already intensely environmental, and already deeply committed to their communities. So Starbucks: welcome to the club (let us know when you get here).
The problem with local
Which brings us to Starbucks’ latest uphill battel – its attempt to make itself more local, and more responsive to the communities in which it operates. Because, even on on its home turf in Seattle, where Starbucks still has some claim to being “local” – small coffeeshops are thriving and forcing Starbucks store closures.
So it shouldn’t be a surprise when a small army of field-tripping keeners were spotted at several Seattle area coffeeshops over the last few months, making loud observations about store design and product lines, and filing their notes in folders marked “Observations” in large letters. The results? Wait for it…
The new brand: “15th Avenue Coffee & Tea”
Branded by location: “15th Avenue”. That’s the name of the new game-changing Starbucks location on (surprise!) 15th Avenue in Seattle.
So does this mean a “15th Avenue” will be coming to a neighbourhood near you. Nope. Yours would be “Main Street Coffee & Tea” or “Broadway” or “Grosse Pointe Strip Mall” or “All-Knowing Supreme Leader Boulevard” or whatever. The idea would be to have each location branded with its location to make it seem like it grew organically in that space.
Two other stores in Starbucks’ native Seattle will follow suit, each getting its own name to make it sound more like a neighborhood hangout, less like Big Coffee, a Starbucks official told The Seattle Times on Thursday. Chicago Tribune.
Booze & guitars: The field-trippers focused on coffeeshops that serve alcohol alongside their hot drinks, as well as those that feature live events like poetry readings and guitar-jams. So nosurprise that these will be part of the cocktail mix at the new shops. The idea is 1) to prop up sales in the traditionally flat evening hours, 2) tap into lucrative alcohol profit margins, and 3) to make Perez Hilton very very happy.
No logo: all the media I’ve read are saying that no Starbucks logos will appear on the signage, the products, or anywhere else in the store. I can’t confirm this, so if any Seattle-based readers can visit and confirm, please do!).
But if this is a purely “white label” approach to branding these new locations, I’m interested to see how Starbucks is going to evolve this concept as they go forward. For now, the perceived independence of the locations is a useful way to allow the clipboard-toters at Starbucks to experiment and study the new format without dilluting the corporate brand.
Coffee industry analyst Andrew Hetzel: “It looks to me that they are testing a specialty sub-brand to see if they can capture some other segment of the market that would otherwise be disillusioned by a large corporate chain,” Hetzel said, adding that opening only one at first “gives them a live shop to test changes in menu offerings, store design and, perhaps, procedures quickly” without disrupting operating stores branded with the Starbucks name. Whole
Where to from here?
But this can’t last forever. Assuming the format works and Starbucks wants to roll it out to different markets, eventually, they’ll see the need to create visible connections (and brand equity) between locations. Because creating a series of purely local brands with no overall brand marketing synnergies across the chain would be counter-productive for a company of Starbucks size and clout. And I find it hard to believe they’d be that stupid.
AdAge article: Technomic President Ron Paul… predicts the concept will look much different if rolled out on a national stage. “I still think it’s more a of test lab than something they’re more serious about rolling out,” he said. “That’s not a national strategy.” Full article here.
So three basic brand strategy options:
1) New “family” brand:
Starbucks name would not appear in branding. Instead, the new shops would be given their own umbrella brand which would operate as a stand-alone “entity” within the broader corporate portfolio. So for example, the new branches could use a high-character name like “Mermaid Cafe” or a more neutral name like the “Your Independent Grocer” chain in Canada.
Advantage: diversifies the Starbucks portfolio without risk of brand dillution or confusion around over-extension.
Disadvantage: little transfer of brand equity – must essentially start from scratch building a new brand.
2) Premium brand extension:
This new format becomes a flavour of the existing Starbucks brand, but is given a descriptor or “soft brand” name of its own – like Starbucks Plus or Starbucks Cofeehouse.
Advantage: Leverages 30+ years of brand equity, but Disadvantage: seriously undermines the consumer’s current idea of what a Starbucks is and what they can expect when they walk through the door.
3) Endorsed brand:
The new brand has its own brand identity and branches would clearly not be “Starbucks” but everywhere the name appeared in graphics or formal text (like a Press Release), it would be “endorsed” by the Starbucks brand – as in “Courtyard by Marriot” or “Clever Cutter from K-Tel“.
Advantage: blends clear connection with separate identity. Disadvantage: requires careful management to balance the two aspects of the brand.
So which way do you think Starbucks should go? Your thoughts are welcome as always.
So as I write this, illness the newly re-christened SciFi Channel is ringing the bell at the NASDAQ to celebrate their name change to “Syfy” (Siffy?) and the Twitter hash tag #syfy is alive with unanimous pans of the new name: “Worst. Re-branding. Ever.” That might be a stretch, mind but so is the new name.
Variety, page noting the fan outrage and commenting on the trend of cable channels renaming themselves in search of wider audiences, said NBC Universal had tripped the light gooftastic. “Syfy … opens up new possibilities for confusion,” the trade publication wrote. “If the network is trying to expand beyond science-fiction programming, why go with a new name that’s still pronounced ‘Sci Fi,’ but with a goofy spelling?”
Captain, I’m a brander not a Cable programmer, but they’re trying to have it both ways here. They’re trying to 1) preserve brand equity by pretending that the word will be pronounced the same way, while 2) leaving themselves open to the possibility of expanding to non-science fiction programming, and 3) building a distinctive protectable trademark in the package.
All of which sounds great on paper but to ordinary earthlings, it seems like a big stretch. Which is the trade-off when you choose a plain-language descriptive name like “SciFi” in the first place. Instant category recognition, but you have to live with (and respect) the expectations you create.
Or maybe I’m wrong. Maybe this weekend’s Cisco Ottawa Bluesfest should rebrand as “Blewsfest” now that KISS, Styx, and Ice Cube are all on the same bill. Note to Bluesfest: gimme a call, ‘kay?
A quick word on the tag line:
Oh, and when you put the “Siffy” name together with the mostly opaque and totally illiterate tagline “Imagine Greater” one wonders if the marketing team has been abducted by aliens (and not by the smart ones).
Maybe I’m a bit slow, more about but I just came across the term “crowdsourcing” – the process of solving business problems using social media (not to be confused with another term I recently picked up: “FLASHMOB” – the process of creating absurd but strangely compelling YouTube videos with your friends).
The image above is from my experiment with one of the early commercial applications of the concept. 99Designs.com allows businesses to design their logo / business card / Web site by posting a prize, a creative brief, and holding an online contest.
In this case, I’ve challenged designers to tackle a logo for the BEGtoDIFFER brand. The results are mixed, but while there are no obvious winners in the pack yet, the results are really creative and certainly better than a lot of professional designers I’ve worked with for a lot more money. But is it an ethical way to secure creative content? I have two minds about it: 1) the client mind: great! Bring it on, and 2) the agency / freelancer mind: whoa, that’s undercutting and devaluing the industry!
As if to underline the difficulty of the issue, one interesting sideline came up in the process that illustrates both the risks and some of the issues involved in this process. One entry, quite a strong one, which contained a sheep similar to the one in the graphic on this page, struck me as oddly familiar, and upon some reading, sure enough, it is very similar to the sheep icon used by a 1.5 Billion dollar British ad agency: http://www.bartleboglehegarty.com. That’s not to say there was any plagiarism involved – far from it. It’s just to say that the onus is still on the owner of the “marque” to ensure that the final product isn’t going to get you into any trouble.
As a further cross-current, I found to my surprise – that the “research” arm of BBH, called BBH Labs recently commissioned its own crowdsourced logo from another site called crowdspring.com. Well, can you imagine the indignation from the “serious” design community when a big firm offers *only* $1500 for a logo…