The recession for brands is just beginning

It was let slip on 24th January that we would be facing a May 6th general Election and this will surely change everything, whoever gets into power.

I don’t want to be a doom and gloom merchant by any stretch of the imagination as recessions have traditionally been a superb opportunity for well managed businesses to establish a wider market share and trade through, without their weakened competitors who fall by the wayside as economic casualties.

According to Credit Action, the average owed by every UK adult is £30,226 (including mortgages), which is 133% of average earnings.

There is also the small matter of how much has been loaned on our behalf to bail out the poxy bank, which runs into the hundreds of £billions and the £200 billion that has been spent quantitative easing.

Well, from May onwards, we’re having to start paying for it through higher taxes and lower public spending, so I believe we will be facing our most austere era for many generations.

My own family had a very successful soft drinks business based in the South east that was the main supplier through the war years. When the country emerged from war in 1945 it was seen as the drab/austere choice that had almost been forced on them for the last six years and people walked away in their droves eventually leading to it’s collapse in the 60’s.

So what does all this mean for brands?

It’s entirely what you make of it!

1. It’s a chance to grab market share

By offering great value, better quality products that people care about. This is far more than just offering the cheapest price for a poor product as it is my opinion that in really tough times, people buy far fewer cheap products, they buy ones that they think will last and dispose of the discretionary purchases.

How good can you make your product for the money, not how cheap can you get away with making it?

2. It implies that online price checking will become vital

We are in the perfect economic market, where we can all check the price against anyone else out there. If the product is identical, why does it matter where you get it from – as long as you can trust them.

3. The weak will leave the market

In the design market, there are now loads of ‘design firms’ with no designers. They have a front person (suit) who then subcontracts the work to whoever is available. Yes it saves money, but it is a sure way to introduce inconsistencies and slowly undermine brand equity.

4. It is the time to reinvent constantly

Like the Lyle’s example above, I guess my Grandad stopped innovating and let his company slowly die. People became bored, because the product became boring to them. A brand has to constantly evolve and introduce new touches, tweaks and ideas or people will have excuses to flirt with their peers.

5. Don’t just cut costs, cut the right costs

In this great article from Accenture, they point out that Companies that did really well in the last recession did not just cut costs — they cut the right costs. They diverted resources to activities that actually created value.

So that’s it.

Like I wrote last year when Woolworths waddled pathetically into financial obscurity through lack of effort and like any good Cub Scout would advise.

Be prepared.

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Is £1 the new brand battleground?

Poundworld Nottingham
Poundworld Nottingham

The old Woolworth’s in Nottingham, Victoria Centre is now the new Poundworld. It’s apparently the biggest they have, so I thought I’d have a look around it.

Most of their stock isn’t for me, but I guess I’m not their target audience. They have some great value Johnson and Johnson facewash and 3 cans of diet Cherry Coke – all for the bargain price of £1. They have electrical items, hygiene and bathrooms stuff and almost anything youcould possibly need to kit out the perfect value house. But what really surprised me was the fact that they have a chiller.

In this chiller are Richmond sausages, 2 litre packs of milk, back bacon (in slices of six), vile Rustlers burgers (priced up at £1.49!) and a sandwich selection that even includes Coronation Chicken on a brown bread – again, all for £1.00.

Is £1 the new battleground - Judging by their hideous sandwiches, I think not!
Is £1 the new battleground – Judging by their hideous sandwiches, I think not!

Purely in the interests of research, I bought one of their Tuna mayo sandwiches and can report that it was truly disgusting. I ate one half of one sandwich and threw the rest away. For a gannet like me who considers chiller grazing in garages as top fodder, this is highly unusual behaviour.

Greggs across the way however have a new offer of crusty cobs with ham or cheese at only £0.80 each or both for £1.55. Now these are lovely. Fresh, crusty, made in the store on the day and remarkable value.

I can honestly say, because the £1.00 sandwich was sooooo bad, that it will make me look with some deep suspicion at every other thing they sell too. Proof again that one bad brand experience can reflect badly on your entire branded offer. Don’t just look at some of the elements of what you do with your brand, Look at all of them.

So no, £1 isn’t the new battle ground. It’s £0.80.

Thanks to James Cridland for his Poundworld facia shot. You can see more of his stuff here.

Yell Hell – Will Yellow Pages Evolve or die?

A big pile of Yellow Pages, festering in a window

Yellow pages used to be one of those businesses that you relied upon to provide calls that lead to sales. They were at the top of their game, the top of their market and charged accordingly. We had many of our clients paying £600 plus for a tiny quarter column and in a single section. They were unionised so we had to provide flat artwork, with an NGA stamp on the back of it far later than anyone else in the industry.

It was worth the hassle though because it worked.

But now I’m sure that it doesn’t.

Yellow Pages started in 1966 as a supplement to the Brighton telephone book and spiralled upwards from there. In 2008, they produced 104 different regional copies and distributed them free to 28.4 million UK homes.

My new 2010 copy arrived on Thursday last week and was left on my doorstep. I looked at it for a day or so and then emptied into the recycling bin without even unwrapping it. I’m not alone. Every single person I have asked has done the same, so the advertisers money is literally being thrown away.

And that’s because the brand hasn’t evolved anywhere near fast enough to remain relevant. It’s currently swamped under a debt of £3.8bn and had an underlying loss of over £1bn last year. So why is it still insisting we need these doorstop directories and why are advertisers still paying to be unseen?

I can only conclude that if they are losing that much money, they are either paying too much to print them, too much to distribute them or their advertising revenue has fallen to a level a long way below breakeven. So they need to implement a massive and structural change to remain relevant to an audience that is behaving very differently to those that were around in 1966.

In 1993 they ran one of the most famous TV commercials ever, but surely poor Mr Hartley could now just buy it on Ebay or a specialist book finding site online.

192.com are running an e-petition (which is a thinly disguised advertising campaign) to get you to sign up to say ‘no’ to printed directories. In these environmentally conscious days, they have a point and I for one can’t remember an occasion when I turned to the Yellow pages for the search I needed.

A blatant promotional e-petition from 192.com to get rid of Yellow Pages directories
A blatant promotional e-petition from 192.com to get rid of Yellow Pages directories - click the pic to vote yourself

The figures from Google show that 87% of all online activity begins with a search and they handle over 7 billion searches in any given month. According to Wikipedia, who reference Nielsen and other independent studies, they have a very slim percentage of Internet searches.

And their online version Yell, is a bit rubbish. It’s no better than any other internet search as it doesn’t come with a recommendation like Facebook and even Twitter can provide and it doesn’t allow you to feed back as to what you thought of the suppliers using something like Feefo so we can begin to trust those who advertise and tell the cowboy from the craftsman.

It’s very easy for me to have a pop at someone like Yell when they are down and on their way out, but for them to not evolve, is signing their own death warrant. There’s a slightly different logo on the Yell site (whoopee) but it is in effect, exactly the same product as when they launched it to the market – before Google were any form of force – in 1996.

There is such a strong theme emerging in my thoughts that any business now will have to be different in a few years time, that it worries me how many more of these classic institutions are going to go the same way.

Woolworths did, Waterford Wedgwood did and Yellow Pages probably will, so who’s next?

Evolve or die, because this generation isn’t like previous generations and the next one will be different again.

Thanks to Sue Tortoise for her Yellow Pages image. You can see more of her lovely natural work here. She seems to work more in the field of nature and all things flora and fauna, so it was a surprise to find this image amongst her collection. Anyway, thanks Sue.

Actually, you can polish a turd!

Wilkos has for years been the dowdy daughter of the British high street, toiling away as a cheap hardware store with no particular positioning and not enough real reasons to visit them regularly. Not quite posh enough to be John Lewis and a (big) step above the Poundland and super low price retailers.

The lovely Old Wilkos storefront
The lovely Old Wilkos storefront

But, when Woolworths died, Wilkos made their move.

And they have proved that you can occasionally polish a turd. The new branding created by Jupiter has given them a much more youthful new look that will have a positive effect in many ways. It feels more like an Aldi than an Argos and will hopefully deliver them the growth they deserve.

Wilkos store front - like Woolies with evolution
Wilkos store front - like Woolies with evolution

The staff must surely feel far more motivated in their new colours than the previous red/yellow cheapo combo.

The new Wilkos staff uniform
The new Wilkos staff uniform

The customers will fee less embarrassed about being seen with a WIlkos bag and with good PR could even help themselves position their purchase as ‘discerning or savvy chic’ rather than the ‘best kept secret’ on the low rent end of the high street.

They seem to have so many things right that it’s like seeing what Woolworths should have become had they evolved rather than allow themselves to curl up and wait to die. Wilkos have Pick and Mix, but it takes up a small proportion of the store and not the huge area Woolies devoted to it before their demise. Yes, it’s high margin selling sweets, but you can only shift so much of them!

And, like any really good retailer they have concentrated on value rather than price. Goods of an appropriate quality and at a sensible price.

The only downside for me is the rather horrid queuing system you have to endure in order to pay. It all looks a bit like a bad bank. Maybe they’ll do like Natwest and take the clocks out so no-one can see how long they are queuing for? or in a more positive light, perhaps the softer, more airy approach of TK Maxx or even Primark would be a better solution?

Anyway, good work Jupiter and good luck Wilkos. It takes a brave (and extremely sensible) client to implement such a radical change.

Thanks for the old Wilkos image to the lovely people of Zyra

Welcome back Woolworths

I was searching the web this morning and saw a Google Adword for Woolworths.

I did hear that they were back, but click here for proof.

http://www.woolworths.co.uk

By reading over their blog, it seems like they are being sensible and trying to correct the mistakes that took them down in the first place. They talk about defining a range designed for their web shopping format and even seeing if they can make Pick and Mix work on the Web.

If they can take the best of the Woolworths brand values and build on them, they may have a chance of building a new business with the old name.

Its a shame they missed out on all the Easter Egg sales for 2009 as in a business article on radio four yesterday it was said that the reason Tesco and Sainsbury are selling so many cheap Easter Eggs at present, is that they bought them all from Wooolies administrators. I guess that is our gain?

Whilst Woolies was always far from perfect, it will be interesting to see if the new owners can do a ‘Skoda’ with it and turn it from 70’s joke into a sharp responsive retailer that would have allowed them to survive in the first place.