December 22, 2013

Case Studies: A&F, JCP, and A&E

Abercrombie & Fitch, the allegedly hip store for young people who want to wear lots of layers of clothes in a stylish way and carry around arty-farty shopping bags with pictures of topless or almost topless chiseled pretty people on them, once offered to pay a customer to stop wearing their brand. Yep - don't wear our clothes, said their 'brand senses department': 
We are deeply concerned that Mr Sorrentino's association with our brand could cause significant damage to our image. We understand that the show is for entertainment purposes, but believe this association is contrary to the aspirational nature of our brand, and may be distressing to many of our fans. We have therefore offered a substantial payment to Michael 'The Situation' Sorrentino and the producers of MTV's The Jersey Shore to have the character wear an alternative brand. We have also extended this offer to other members of the cast, and are urgently awaiting a response.
Famously, A&F also ran into trouble with their 'exclusionary practices' which were detailed in a 2006 interview with CEO Mike Jeffries (the comments resurfaced more recently).  When asked about the emotional experience he offers his customers, and how sex plays into that, here's what he said:
It's almost everything. That's why we hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people. We don't market to anyone other than that. 
Jeffries went on to say this about some potential customers:
In every school there are the cool and popular kids, and then there are the no-so-cool kids. Candidly, we go after the cool kids.  We go after the attractive all-American kid with a great attitude and a lot of friends.  A lot of people don't belong (in our clothes) and they can't belong. Are we exclusionary? Absolutely. Those companies that are in trouble are trying to target everybody: young, old, fat, skinny. But then you become totally vanilla. You don't alienate anybody, but you don't excite anybody, either. 
A&F, which offers women's clothes in sizes XS (00-0), S (2-4), M (6-8), and L (10),  and men's pants  ranging in size from 28x30 to 36x34, didn't want to market to fat people, or falling-down-drunk Jersey Shore folks, because they weren't cool.  They couldn't 'vanilla' the brand and become indistinguishable from everyone else.

JCPenney, on the other hand, got into trouble when Ron Johnson, their former CEO, noted in an interview that they had no 'growth platform' and so made a huge marketing change, which included making JCP look very different.  Here are his comments:
We had a business model that didn't have any growth in the future. Every business needs to build off a growth platform...We had a promotional model which had merit but it played its course. We need a new growth platform....The key was we had to have the courage to transform the business. 
He went on to get in trouble with this comment, in a response to getting customers back after the significant drop in sales that resulted from the business transformation:
Come to our stores right now. Our stores are busy. We're gaining that customer back. We know who she is, we talk to her in a variety of ways and it's important to get her back in store. It's even more important to attract new customers. That's the key to this long term, new customers. We had one of the oldest and poorest customers in the industry. We have to over time get a little younger and affluent. What will bring them in is everyday value on products they can't find elsewhere and not losing the older customer as well. We'd love to keep her. 
JCP's CEO knew who his customers were, and the numbers did not compare favorably with competitors like Target, Macy's and Kohl's.  Nearly half were over 55, and only 20% were younger than 35. Looking at income, only 13% earned more than $100,000, and 29% earned less than $35,000.  As a 'growth platform', that doesn't look sustainable, does it?

So what happened for these two retailers, when their CEOs did and said things that ticked off the customer base?  For A&F, people bought their clothes and gave them to homeless people.  Ellen DeGeneres (coincidentally, a JCP spokesperson) mocked them for selling 'doll clothes'.  Sales crumbled, with losses over multiple quarters.  The store is going to start offering clothes in larger sizes and more colors, among other things.

JCP suffered significant losses, as those older, poorer customers boycotted the store; they ditched Johnson as CEO and rehired a former CEO to right the ship.

So, what do these have to do with A&E and the Duck Dynasty drama? On the one hand, the two retail cases may look different; after all, in the case of A&F the representative was defending the brand, and in the JCP case the representative was turning the brand on its head. And, of course the brand representatives were the CEOs.

But what got then in trouble, more than anything, was their words, and the impact those words had on actual or potential customers. Those customers, real or wished-for, got up in arms, and in all sorts of ways complained about the exercise of free speech by the CEOs; they organized, they stormed social media, and yes they denied the brand their hard-earned cash. Heck, I have friends who stopped shopping at JCP for the duration of Johnson's tenure, and I know folks who were very upset with A&F and their short-sighted, narrow-wasted view of 'Authentic American' kids.

In the case of A&E, the 'brand representative' was not the CEO, he was just the star of  A&E's biggest sub-brand. A&E heard from actual or potential customers (the LGBT advocates and yes, the NAACP regarding those happy, non-blues-singing, cotton-picking, pre-welfare black folks) who will organize, who did flood social media with strongly worded messages, who would boycott the brand -- all of the same things that happened to A&F and JCP, as well as yoga-clothing retailer Lululemon; their founder/CEO is now out.

Listen, I'm not a fan of reality shows, that's not a secret. I watch a few of the competition shows, less now that many of them are growing old and tired. But there were American Idol contestants being booted for bad behavior -- not for being bad singers, but because their bad behavior off the show could damage the brand. And frankly, we don't have to look a whole lot further than folks like Mel Gibson or Charlie Sheen to see that, yes, even actors and TV stars suffer consequences from their behaviors, including their exercise of free speech.

A&E, which surprisingly does air shows other than Duck Dynasty, suspended a guy from a show that's currently on hiatus, to think about how or whether to protect its brand, not necessarily the sub-brand of the Robertson family. (Not for nothing, that's kind of like Major League Baseball suspending a pitcher for a certain number of games, and the suspension includes days the pitcher doesn't even play, isn't it?)

The biggest thing that will come of this? An even stronger DD brand, according to at least one crisis manager, which is apparently just fine with the Robertson family; after all, they're already a hundreds-of-million-dollar company what with their marketing of anything and everything Duck. They'll profit either way, frankly. We  may never know whether that conflicts with the Duck Dude's comments about 'the greedy' and their chances on judgment day.

Here's a nice summation of the whole thing, from the LA Times:
In the end, it comes down to freedom.  A&E has the freedom to reckon lost revenue against lost good will and make whatever decision works best for it. (It will be a practical decision more than a moral one.) The Robertsons have every right to do likewise, within the bounds of whatever the lawyers work out. If the show continues, sponsors will make similar calculations.  And, should the show return, you will be free to watch or never to watch, and to protest its ongoing existence or not.
Yep -- it's all about freedom. The Robertsons and other actors (and even politicians like Sarah Palin and Bobby Jindal) and corporate CEOs can say what they want; advocacy groups (regardless of their specific positions) can respond. Customers can stick with or walk away from a company, and companies can stick with or walk away from people who actually or potentially damage the brand and/or the bottom line.

I'm fascinated that we don't express the same outrage over all of the situations where similar actions and reactions occur, and I wonder, maybe that's our real, 'authentic American' brand.

No comments:

Post a Comment