HMV - a future childhood memory or a opportunity for brand revitalisation

Looking out from Archant Towers to a sea of white brings back childhood memories of days off from forced school closures playing in the snow in Cromer. Memories of your youth often have key points that not only stick in your mind but also often come up in conversations with friends such as “what was the first record you ever bought?”

I can clearly remember going into Woolworths in Cromer with my mum to buy Ultravox’s Love’s great adventures which started a love affair with music I still have. Sadly, I now doubt that my boys will have that same experience and memories. I cannot believe that a click on a box on a website will illicit such strong emotions some 30 years later. This brings me to the current retail stalwart to struggle; HMV.

HMV opened its first store in Oxford Street, London in 1921 and currently has 231 stores all of which are now under threat as it moves into administration. The future of HMV is now clearly in the balance and there is a strong potential that it could go the way of Our Price and Andy’s Records as fond childhood memories. This despite the fact that last year, according to Verdict Research, HMV accounted for 22% of all music and video sales in the U.K.

Most commentators are putting the blame squarely on the rise of music e-commerce combined with the growth in online services such as Spotify and iTunes. Those certainly are major factors but they have their own pressures. A major online only competitor was Play.com which has recently ceased to be a straight etailer, caused by the closing of the Low Value Consignment relief tax loophole which meant that prices were cheaper as they were imported from the Channel Islands. But the fact remains that most of the people I know purchase single tracks or whole albums in digital form only if only to reduce storage space in their houses.

Other contributing factors have been glossed over such as the fact that as a nation we are buying less music than we did 10 years ago. The fact that music retailers faced competition not just from the internet but also from the supermarkets and their purchasing power, a major reason for many independent music stores closing. Despite all of this could HMV have done more to survive?

That is a difficult question. Certainly you could argue that it could have reacted earlier and more strongly on the threat from online. You could also argue that the stores could have had more focus and become more experience focussed. However when revenue pressure starts and you move down the “pile high discount” model its a difficult one to escape and to move to creating a store that people want to visit rather than are afraid about knocking over piles of cheap DVD’s.

What HMV still does have though is brand value in its name and peoples emotions regarding the brand. On the day of the announcement #HMVmemories started trending on twitter, you didn’t see that with Comet. I truly hope that someone recognises a potential here and starts again with the brand. However they will need to be strong in retail, marketing, branding and also digital and companies who have managed to master all of these are extremely rare.

Tim Youngman is head of digital marketing for Archant follow him on twitter @timyoungman

2012 a year of marketing highs and lows

As another Christmas rushes towards us and before we have had our fill of excessive gluttony and Morecambe and Wise repeats a brand New Year will be upon us. So before I take my decorations down, cry hootenanny and think about returning to work again I wanted to use this last column of 2012 to remind you all of what a very good year 2012 has been for marketing.

To start with a great lesson in life is to learn from your own and especially others mistakes and there have been some real beauties this year. My favourite lesson in reputation management and the need for proper understanding of the art that is public relations came from Starbucks. The corporate tax avoidance scandal centred on three companies; Amazon, Google and Starbucks but its is Starbucks that has taken the bulk of the flak in column inches. I am totally convinced that within a couple of years this will be used by lecturers to students as a case study in how not to manage a PR crisis which is not a bad thing.

Social media, if done correctly, can be an amazing asset for a brand. Done badly it can create huge headaches and of course its often brought about by the brands themselves. You cannot help what people say about you and social media gives people a forum to do that in public like no other. However actually asking your twitter followers to complete the sentence “I shop at Waitrose because…#WaitroseReasons” is asking for trouble and funnily enough that is what they got. I don’t have enough space to list the more amusing responses, feel free to read one of my previous columns or just Google to see them, it does prove that Waitrose customers are a very funny bunch.

So if they were my favourite mistakes, my highlights were nothing short of spectacular.  To start it has to be the London Olympics and brand GB. Before the games, we pessimistic Brits were rightly concerned how successful it would be. However within 10 minutes of the opening ceremony it was clear that the next month of Olympics and Paralympics showed us and the world that the UK not only can put on a worldwide event but can lead in fields as diverse as engineering, creativity and of course marketing and sponsorship.

My top highlight though was a man who thought it would be a really good idea to get carried 23 miles into space in a capsule and then jump out. What Felix Baumgartner did was quite incredible but what Red Bull founder Dietrich Mateschitz did in my mind was almost equally impressive. This was something that could have gone very, very wrong. However in the end over 8 million people around the world watched Felix jump. This was followed by countless column inches and hours of television coverage let alone the millions of comments on social media all mentioning “Red Bull Stratos”. For an investment of a few million, the marketing coverage this generated has been estimated in the tens of millions. It has indelibly linked the brand in the mind of a generation and set a new level of what can be achieved with a marketing event. Exactly how the founder Mateschitz and his marketing team had planned.

So 2012 had its highs and its lows but its highs way outweighed the lows. We can only look forward to 2013 and what a new year will bring. Happy Christmas readers!

Tim Youngman is head of digital marketing for Archant follow him @timyoungman

Tim Youngman - The ITV logo change and brand positioning

Every industry has quirks and things that to them are massively important but seem minute to the rest of society. I have managed to end up in an industry which has more than its fair share. In marketing we spend hours and days worrying and discussing about even the smallest changes to product taglines. It might sound bizarre to you but if you are the head of marketing for Ronseal and you wanted to change “it does exactly what it says on the tin” you would have to jump through more hoops than a seal at Seaworld.

One of the reasons I love my industry so much is this relative importance placed on things that to the causal observer seem so small but in reality do actually matter a lot. For example much as been made of the recent change to the logo of online auction house e-bay. Did you notice it, probably not, but it lead to one of my favourite tweets regarding a change which simply read “surely it’s just been on a diet”.

So here are some quotes regarding an upcoming re-brand “The rebrand is about cementing the relationship in viewers”, “The logo is a form of human handwriting. It’s curvy and warmer than we have been in the past and in comparison with competitors feels distinct and true to us.” That, dear readers, came from ITV group marketing and research director Rufus Radcliffe talking about a re-brand of the ITV logo happening in January.  

January will see the first major rebrand of ITV since 2006 when you will see it drop the “1” and revert back to simply “ITV”. They are also changing the logo, as the quote gives away, to a new curvy style whose colours will change according to the tone of the programme it is promoting. So keeping it current it might be brown and green when promoting IACGMOOH.

But why is this important and what’s the point. Well ITV has been through and come out the other side of a very difficult period in its history. Only a few years ago it was struggling against the growth of satellite and cable television channels, the internet and a reduction in ad rates. Fast forward to today and ITV is in good health. It increased revenues by 4pc to £1.57bn in the nine months to 30 September, thanks to sales from its production arm, ITV Studios, which rose by a fifth to £498m, helped by the success of hit shows such as Downton Abbey.

The re-brand allows ITV to clearly position itself against its rivals, nicely described by Mr Radcliffe as: “Being at the heart of popular culture is the purpose behind the ITV brand. The BBC’s is to educate and entertain; Channel 4’s is a mission with mischief”. I was most pleased to see that they did not spend hundreds of thousands of pounds on consultants to do this but trusted their own internal creative team to come up with the goods, an unfortunately rare decision when these things occur.

So this may not even register with you or you might raise a slight flicker of acknowledgement when the logo changes in January. However to some of us even if we don’t like to new logo we admire the thought and reasoning behind it and hope that it helps to continue the turnaround in a national institution.

Tim Youngman is head of digital marketing for Archant follow him on twitter @timyoungman

Tim Youngman – Starbucks, Tax Avoidance and the art of ethics and brand positioning

One of the most interesting recent stories from a brand management point of view is the current furore regarding tax avoidance. Three companies in particular have been singled out for attention, Google, Amazon and Starbucks. Senior management from all three companies last week had to face a very public grilling from the Public Accounts Committee over the amount of tax they paid. To put some numbers behind this Starbucks had UK sales of £398m but paid zero corporation tax. Google had sales of £395m and paid £6m tax and Amazon had sales of £3.3bn paying £1.8m tax.

You may well be shaking your coffee cups right now but all of this is perfectly legal, via the loopholes in our tax system. International companies can move profits around between territory bases. For example Google’s European headquarters is based in the Republic of Ireland with its advertising team based and so it pays its main tax requirements there.

This situation has highlighted a real competitive advantage global companies have. Andy Street, managing director of John Lewis stated in an interview last week regarding Amazon   “There is less money to invest if you are giving 27pc of your profits to the Exchequer,” “Clearly, if you are domiciled in a tax haven you’ve got much more [money]. They [Amazon] will out invest and ultimately out trade us. And that means there will not be a tax base in the UK.” Strong stuff but all true.

I have slightly more sympathy for Starbucks and Amazon on this than I do Google. Amazon does employ over 2,250 people in the UK and uses UK companies its fulfilment chain. Likewise Starbucks employs more than 8,500 people in the UK and plan to grow this by another 5,000 based on outlet launches. Google, with no physical product, employs considerably less. But for me the most interesting side of this once again is the impact on brand positioning.

Compared with Google and Amazon, Starbucks has positioned itself around being a fair community focussed business. Starbucks has responded to all of this by posting defences to its actions to its blog with posts by its UK MD, Its CFO and also Howard Schultz its worldwide chairman, president and CEO.

If you look at the comments against these statements many use the words “responsibility” and “community”, words used in Starbucks own mission statement. It has used these as a core part of its brand positioning and its customers in part have bought into this. Many of the posts are from customers so upset by this perceived change in ethics that they say they will not purchase again.

There is a big difference between a few people upset enough to post comments on a blog to actually loosing customers, and so sales, on a large scale but I suspect its brand image has been tainted, probably more so than Google, because of its choice of brand positioning. This is not a column about the rights and wrongs of this as you are capable of making your own minds up. However if your brand and brand following is based on certain ethics, the lesson is you better make sure your business follows them from top to bottom in all areas. I look forward to seeing Starbuck next brand marketing and PR activities with interest.

Tim Youngman is head of digital marketing for Archant follow him on twiiter @timyoungman

The Argos Catalogue - Branding opportunity or part of print history

As I child, I remember thoughts at this time of year turn to what you would like at Christmas. For inspiration there was one all encompassing source, the Argos catalogue. Argos first introduced its hefty tome in 1973 and at its peak 20 million copies of the biannual publication were printed. This is now set to change as part of a £300 million modernisation plan announced by its new CEO John Walden.

The announcement covers a five year plan involving spending £100 million in each of the next three years with an aim to increase sales from £3.4 billion to £4.5 billion by 2018. The plan is wide ranging and includes the closure of 50 stores and the relocation of 25 more as leases expire over the next five years. The stores themselves will change as well. The focus will still be on having a strong retail presence but used more as collection hubs and for customer service. Customers will be driven to using mobile devices and in-store wi-fi to order online instead of the laminated catalogues and little pens and paying in store after queuing up.

Argos recently announced that multi-channel sales now account for 51% of its total sales with 7% coming from mobile alone. Considering its sales figures are in the billions that is a tipping point in terms of volume coming from the web rather than the high street. Argos in my opinion is one of the pioneers and leaders of e-commerce in the UK. They were one of the first to allow customer reviews on their own product lines on its website. Its introduction of a click and collect and online reservation system again massively increased it online sales helping it to the position it is today.

So from a sales point of view I completely see why they are doing this and reacting to the change in customer activity. They will no doubt continue to innovate online and invest in digital channels and grow both the revenues and profits because of that strategic belief and investment. However I have a nagging worry from a branding point of view.

The new CEO has said it would be ‘foolish’ to pull the main catalogue now as 85% of customers still use it before buying. But he also admitted that it may decline ‘precipitously’ as sales shift online. Some commentators have said that it helps it move away from the risk of being seen outdated but I think that’s naive. The catalogue is, I’m sure, expensive and a pain to produce. Its place in our homes though is branding most retailers would kill for.

In the next few weeks you will all be inundated with glossy mags from supermarkets and other brands trying to get mindshare and table space. The Argos catalogue sits as a reminder of its place as a warehouse of everything you might need. If they stop the catalogue all together that little, albeit very weighty, reminder in your homes goes and then they have to rely on planned media campaigns and people walking past the stores to get them to use them.  Argos has already proved itself as a digital pioneer and leading e-commerce offering with incredible and growing online sales. I hope it continues though to think of its catalogue as part of its distribution and marketing mix and not part of an outdated history without benefit.

Tim Youngman is head of digital marketing at Archant follow him on twitter @timyoungman

Celebrity endorsement – from Josiah Wedgewood to Lance Armstrong

Here’s some history for your dear readers. Did you know that one of the first people to pioneer celebrity endorsement was Josiah Wedgewood way back in the 1760’s? He actively promoted the fact that his pottery was used by Royalty to add to the perceived value of the products he sold. Once Queen Charlotte started using his wares he immediately called himself “Potter to Her Majesty” and increased his prices for the nobility. He then lowered his prices for the middle class but the Royal stamp of approval on certain ranges meant he could charge a premium.

From that simple but brilliant piece of marketing insight we can fast forward over 250 years to a world where celebrity endorsement is now the norm. Today Hollywood film stars promote luxury goods for millions and often low cost goods in the Far East so long as they are paid enough and also given a guarantee that the ads will not appear in the West to tarnish their reputation. Today a new breed of television “celebrities” such as those from The Only Way Is Essex are paid “low” wages and told they can expect to gain large on photo deals and product endorsements.  I suspect Josiah would probably be caught between pride and shame at how far his initial concept has gone.

However history also teaches us that although we tend to put celebrities on a pedestal they can often fall off and, if closely associated with a product or service, can damage that as well. High profile celebrities can make lots of money from brands wanting to be associated with them. David Beckham has made far more money from his product endorsements than he has ever made from actually kicking a ball. However for every Beckham there is also an OJ Simpson or a Tiger Woods. High profile celebrities with big product endorsements whose sponsors disassociated themselves as quickly as possible when things turned in their private lives.

In the last week we have seen sponsors finally start to desert Lance Armstrong. Even Nike, whom he has worked with since 1996, cancelled agreements and even using the strongly worded press release stating: “…has misled Nike for over a decade”. This shows the scale of the issue with Armstrong as they stood by Tiger Woods when his personal life exploded in 2009 when other brands left him. Within hours of the Nike announcement the cycle company Trek and brewers Anheuser-Busch also cancelled with more following. To put a sense of value to this Nike alone was worth and estimated £4.6m a year to Armstrong.

Unfortunately there are no hard and fast lessons here. Our fascination with celebrities means that their endorsement will continue to sell products and services. So while that is the case, brand and service owners will continue to pay them in the hope it will help them grow their bottom line.  However even those who once seemed beyond reproach can have hidden issues that can bite those who closely associate with them. Armstrong is not the first example and he will not be the last.

Tim Youngman is head of digital marketing for Archant follow him on twitter @timyoungman

Animee and a beer for women - a lesson in product targeting and gender neutrality

In a week when Adnams was voted into the list of the UK’s coolest brands I thought it only right that I dedicate this week’s column to the subject of beer. This is not a shameful attempt to solicit free samples from those fine local producers Woodfordes, Greene King and Adnams but a genuine interest in the closure of a beer brand.

Before any female readers turn the page, this column is also all about you! A question to start with then. How many of my female readers have heard of the beer brand Animee? Any of you with your hands up I will ask the question did you actually try it? Animee was actually a brand of beer created by Molson Coors designed specifically for women. It was launched last July and backed by a £2 million ad campaign specifically targeting women. Fourteen months later the brand was pulled.

The reasons behind the launch were clear. According to recent research 77% of women say that they ‘never’ or ‘very seldom’ drink beer with only 13% of beer serves in the UK attributed to women. You can compare that to 33% in the Republic of Ireland and 44% in Spain. So in a market that has suffered from falling sales at public houses and the growth of home drinking fuelled by supermarket price promotion sales, any growth opportunity has to be explored.

Of course by saying that this beer is for women you immediately make the statement that it’s not for men who make up the vast proportion of beer consumption in the UK. Likewise, by creating a brand that is particular to the smaller purchasing segment, it has to work very hard to make inroads in that segment and will not attract sales from the bigger consuming segment i.e. men. Suddenly the £2 million marketing budget does not seem that big.

Interestingly it seems that beers that take a non-gender approach to branding and marketing have managed to attract a following. Peroni, for example, reports that it has a strong female following and attributes it to its brand positioning of Italian cool versus lads down the pub. Molson Coors themselves as part of the announcement of closure noted that its own brands Coors Light and Carling Zest attracted a higher proportion of women drinkers without even trying because they were gender neutral in their advertising. In the case of both Peroni and Zest the advertising included both men and women and was more aspirational and inclusive than for example the Carlsburg “Probably….” campaigns which perfectly targets its chosen market demographic.

So will this current failure mean that brewers will stop scratching their heads coming up with beers targeted at women, probably not. I suspect though that the lessons being learnt that creating a beer that is brewed and marketed as being great for both sexes might be.

Tim Youngman is head of digital marketing for Archant follow him on Twitter @timyoungman