(Dec. 2002. St. Louis, MO). I am often confronted by business leaders and managers, especially in Canada, concerning the value of Brand Strategy. Or, as many of these businesspeople like to suggest, “the perceived lack of value in it”. Brand Strategy to some is just ‘hocus-pocus”- there is no real proof as to its merits or effectiveness. End of story. Of course, as a Brand Strategist, I pull out my case studies, theories, and ideas from greats like Kotler, Aacker, and Ries, etc. - but only to polite smiles. The names of huge multinationals and US gurus just seem too far away and on a scale that just does not seem applicable to many Canadian business leaders- especially small and b to b companies. So, I needed an example they can understand, relate to, and put into perspective: Eaton’s.
For Brand Strategists, like astronomers, Brand failures are like supernovas- their collapse full of information and data about the past, significant events, and the recipe for failure. Eaton’s and its failure, twice, is a great and rare specimen to examine- Brand wise.
Eaton’s, in business since 1856, and at one time employing 64,000 workers in 64 stores nationwide, is an excellent example of Brand re-positioning disasterbefalling one of Canada’s prime retailers. The company, in response to challenges from terrible internal management and strong competition, decided with advice from its ad agency to re-position itself from its traditional image as a middle-class department store for families to an upscale fashion item retailer ala Bloomingdales, Nordstrom’s, etc. Many non-Branders and Marketing novices argue that Eaton’s was repositioned as an upscale clothes seller- this naive view fails to see in reality that what started with upscale clothes could not be contained Brand-wise and naturally spread to encompass all aspects of Eaton’s and what it sold (fashion-based products - not just clothes - in consumers’ minds). Combine this with Eaton’s traditional role as a general retailer, and we see no upscale clothes retailer is Eaton’s- just ask consumers. This sort of contamination is why Brand Strategy and planning is so vital, as things spiral out of control quickly.
The repositioning’s effect on Eaton’s was that it alienated its traditional customer base and failed to attract the “younger, more trendy” upscale market- in essence becoming irrelevant to its core consumer and not becoming relevant to its desired new market. (1) The re-positioning put the Eaton’s Brand into a no-win, lose only situation, severely diluted and damaged the Brand’s identity built up over the previous 100 years, and left the consumer market confused as to the real Eaton Brand identity. Eaton’s is a rare example of what I call a “Brand Split”– its Brand identity was basically fractured with the repositioning that occurred, as we said, making it become irrelevant (alienating it) to its historical consumer base and not relevant to its targeted market. Brand splits are almost always damaging to the Brand identity, and as we can see with the rare Eaton’s example, often fatal- they destroy the established central Brand identity by creating confusion. Within less than 2 years (1997- 1999) after its initial/first re-positioning, Eaton’s was bankrupt and sold off to Sears.
Skilled Brand experts know that re-positioning is a very risky business under the best of conditions and should be avoided at all cost- position evolution is the way to go. Only rare instances and situations arise where a flat-out repositioning is beneficial- and these involve a myriad of factors coming together at the right time and place; serious analysis; and sometimes years of both planning and waiting for the optimum conditions to appear. Remember, the repositioning must be planned to work both short and long-term or else your Brand could be sunk.
One of the rare cases of a successful re-positioning is that of Mountain Dew which did not occur overnight- but, in fact, took decades of patient waiting for the right circumstances to arise. Originally positioned as a “Hillbilly”/”Hoosier” drink in the late 1950’s (Pepsi bought it in 1964), the Brand drifted into oblivion/the background as an unsupported tertiary Brand over the years- a no name, nobody Brand (ala Tab). But, Pepsi, knowing that no Brand that has had any type of exposure ever really dies (they stubbornly keep chugging away in the back of people’s minds no matter what…just ask Allante or Hawaiian Punch or Tahiti Treat), kept Mountain Dew alive for the opportune time when it could prove useful. Enter the early 1990’s and GenX. The time had come to create a unique beverage that stood out (it is a very bright yellow), had a “bite” taste-wise, bold sweetness, fed the GenX desire for caffeine rush, and just rebelled- enter repositioned “Dew”. “Do the Dew” had re-positioned hillbilly, laid back Mountain Dew into GenX, daring, different, trendy ‘Dew”- the drink of new age rebellion, danger, trail blazing, snow and skate boarding, mountain biking, and dare devils. The result: short term sales exploded as did awareness, hipness, Brand equity, and popularity. But, seasoned Brand Strategists question how long can Dew be hip? We see the Brand naturally being pigeon holed into a GenX product which begs us to ask what happens when they have moved on/evolved and there is no original core market left (which, too, is only a natural phenomenon when a Brand is largely built on trend)? Another re-positioning? Not likely. Pepsi, say in 5 or 10 years, could be left with a “Dew” dilemma. Hence, the unknown long-term aspects of radical Brand repositioning- it is difficult to know where it can take the Brand. Eaton’s and its agency seemed void of this knowledge and skilland to this day there has been huge distance placed between these two groups and the disaster they initiated.
One of the most interesting facts about Eaton’s is that it had a second chance. The second time around, with Sears ownership (1999) and deep pockets, Eaton’s was resurrected again as an upscale fashion retailer with a splashy ad campaign on a 1930’s art deco/or 1950’s? theme “uberge” and a very expensive, high end makeover for all stores. The result? Again, Eaton’s bankrupted within 2 years for the same reason it failed the first time…the core values established and reinforced over 100 years while being in business could not be buried over with a quick make-over and re-positioning(s). Eaton’s Brand identity (and position) was and is as a Canadian, middle-class, family department store for the masses- a place for pensioners, workers, and “normal” Canada! Simple!!! It was not, is not, nor will ever be about “uberge”, Gucci, Hillfiger, Polo, Chanel, etc. Eaton’s is not a “high class”, elite fashion store a-la Nordstrom’s, Neiman Marcus, Bloomies- and in the Canadian consumer’s, market’s, and society’s minds it will never be! If Sears, and its Canadian ad agencies, had known their Branding laws and done their homework/market research properly, they would have found this out (and not even on the second attempt?). Embarrassing- first the Eaton’s family tried an upscale reposition that failed, now the same mistake under world famous retailer Sears for the same reason. The common denominator/reason? Canadian ad agencies and marketers not knowing what they were doing! Brand Strategy law, at least here in the US, tells us changing such a long-term, established Brand in the mind is like changing an aircraft carrier into a schooner- it’s not very likely. If Sears and its agencies had done their research, they would have not only found a Brand identity carved in stone, but also the fact that Canada does not have the base of wealthy consumers to buy from a so-called fashion based, upscale retailer- just ask struggling Holt Renfrew that has specifically catered fashion-wise to Canada’s few wealthy elite for decades. Add to this the fact that Eaton’s was not consistent in that its stock wasn’t all that premium in quality or Brand name to help reinforce its desired identity and position as a true upscale retailer- it was premium in price only (a death trap in value-savvy Canada). Brand Strategy skills clearly were lacking on all sides (company and agency) and through all aspects of the Eaton’s organization- a guaranteed recipe for disaster.
What should Eaton’s have done? Easy- go back to its greatest Brand asset and a basic law of Brand Strategy: its historical position in the mind built up for over 100 years as Canada’s Department store and reinforced through culture, consumer interaction, and just decades of awareness. What was Eaton’s historical position in the consumer’s mind? …a place for families, of Canadian retailing history, of value…Eaton’s is Canada’s Middle of the Road Department Store! Get rid of the new, failed policy experiments of “everyday low pricing” (it failed even for mighty Sears), and later premium ticketing, and bring back to life the famous national sales Eaton’s was built upon and famed for (they were legendary events much waited for by Canadians). Reinstate the famous dark blue Brand colors of Eaton’s and its original, unique Brand culture through every contact point; and service…reinstate the famed service and politeness Eaton’s and Canadian retailing is famed for- all largely started by Eaton’s. In other words, go back to the original Brand past (position and identity) in Canadian’s minds for the future. Would it have worked? Simply examine Sears Canada and Canadian Tire- both having experienced surges in marketshare, profits, and growth by embracing, and taking advantage of, their historical positions and identities in Canadian’s minds (and thus strong Brand-consumer emotional bonds) and reinforcing them to the extreme. Just look at arch rival Hudson’s Bay- Eaton’s nemesis from day one. By sticking with their Brand heritage (even revelling in it), historical position (carefully evolved not re-positioned!), original Brand identity and style, the Bay has since Eaton’s fall had record growth, expansion and sales! I argue that the Bay is very much lacking in skilful Brand and Marketing Strategy, but it did realize one vital aspect of building a Brandrepositioning is a very risky business and simply/quickly dumping a longestablished Brand identity, position, and image is reckless and a mark of amateurs.
Is there real value in world-class Brand Marketing Strategy? Eaton’s I believe is a prime example of “YES”.
Stefan Paul Jaworski, Masters Degree Marketing, is Partner &Chief Brand Officer for SXTC: Studio X- Temporal Global Brand Consulting, a 20 year old Creative and Brand Marketing catalyst whose clients have included Anheuser-Busch, Monsanto, CP Rail, Kraft, Nabisco, Sea World, FCB, Citibank, Burger King, Jack Daniel’s, Ralston Purina, Hewlett Packard, Apple, Crate, Bosch, Jordache, John Deere, JBL, Exxon, Polar Wave, and Energizer. Mr. Jaworski is the author of 2 regarded Brand Strategy books, numerous Brand Strategy articles, and a speaker on Brand Marketing Strategy.
Reviews: “Dear Stefan: I think it's great (Eaton’s Paper/Article). I wouldn't change anything. All the best.” -Al Ries (Dec. 2002)
“Stefan: Just looking at your Eaton’s article I agree. The difference between most brand consultants and ourselves is that we are not afraid to tell the truth as we see it.” -Dr. Paul Temporal (Asia’s top brand strategist).
Footnotes 1 http://www.canoe.ca/MoneyGrowthNews/eatons.htmlhttp://www.canoe.ca/MoneyGrowthNews/eatons.html http://www.canoe.ca/MoneyGrowthNews/eatons.html
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