In pursuit of profitable growth, brands expand their distribution and extend their offering but risk losing what makes them special. Starbucks immediately comes to mind as the poster child for this dilemma. Macy’s, too. Do economies of scale necessarily mean diseconomies of soul?
Part of what makes a brand special is uniqueness – offering a distinctive product assortment or customer experience or both. Another ingredient is not being widely known – so that customers feel “in the know” – or widely available, so that customers make an effort to participate in the brand.
The Wall Street Journal interviewed Urban Outfitters’ CEO, Glen Senk last month. He talked about his vision for the company, and how he’s ensuring its relevance by avoiding cookie-cutter stores and keeping concepts small and close to their target audiences. The company is designing its brands to stay special by not saturating the market. For example, no brand will have more than 250 stores.
This made me wonder whether brands that have passed the saturation point - like Starbucks - can ever become special again, and if so how. I think it has to do with going micro/massively local and tailoring the "mass" brand to appeal to one neighborhood at a time. Then came an NY Times story about Origins – one of the skincare brands owned by Estee Lauder – trying to do just that.
In time for its official opening on Sept. 16, the store is rolling out an exclusive Made for Denver line, which was designed with the high altitude and dry climate in mind. The current pilot store is testing several ways of expressing its soul – from uniquely tailoring its own products like High Elevation Hydration Cream to offering merchandise by with local providers like English Retreads, a company in nearby Boulder, CO that makes and sells handbags made from recycled tires.
“If we could bring to the new store the principles and core of what Origins is about, what would that look like?” asked Ken Stone, the vice president for retail stores. The idea behind this Denver outpost is to re-envision the retail experience.
"Can big brands afford to do this?" you ask. My question is: "Can they afford not to?"