Lexus Aims for Younger Crowd with December Ads

Remember those old Lexus commercials where someone opens a gift box and the climax is a Lexus (surprise!) sitting in the driveway? Everyone crowds around the car like it’s Santa Claus himself, just marveling and exclaiming with happiness.

An example of a December 2011 ad:

First of all, I think commercials where someone gets a new car in the driveway are logistically a nightmare. How did the husband have time to sneak out and deposit this shiny vehicle in the driveway without anyone seeing it until morning? Also, when the husband drives to pick up the new car, what does he do with his own? He certainly doesn’t drive it back. Or does he have someone else drive the new Lexus over for him? Who does he trust enough? Does Lexus have a car-delivery system, like chauffeurs? Look, I’ve got a lot of questions.

They don’t matter, though. The point is that Lexus has unveiled a new campaign for its December push, and in these ads, people actually drive the cars. They uproot from their tech devices, quit liking, sharing, and friending in cyberspace, and get out and do the real thing themselves.

A December 2012 ad:

So, the bit about getting off your arse to hang out in real life is not a new message in advertising (remember Applebee’s botched “Girls Night Out” campaign?), but it’s a notable change for Lexus because the brand appears to be targeting younger consumers.

The new direction actually makes the Lexus appear more attainable. The characters in these commercials are more relatable. And given that BMW recently unseated Lexus as the top luxury car brand, the entire campaign is extremely temporal.

Also, check out this pretty funny parody of the old Lexus commercials:

A Lemon Bar With That Jeans Purchase?

I love this article from Bloomberg BusinessWeek about the rise of the retailer-restaurant. It talks about how shopping stores from Urban Outfitters to JCPenney are adding cocktails, espresso bars, and other foodservice outlets to their storefronts.

Source: Creative Commons

Source: Creative Commons

Having covered the foodservice industry for the past couple years, before coming to NYU, I actually think that from the business’s perspective, this move is great. Malls have food courts, which are often crowded and bustling no matter the time. So why not create a mini-food court of your own, in your store?

As a consumer, this scares me a litte. Mostly because I think it will work. I know how much I love getting a bubble tea or frozen yogurt at the mall to walk around with, and the more stores that include yummy options like these in their stores, the more tempted I will be.

One of the last articles I wrote before I left QSR magazine and moved to New York was about Macy’s opening its first co-location with Pinkberry. I spoke to Pinkberry CEO Ron Graves and Macy’s director of brand operations, Chris Burr. They both concurred that their brands fit well together; the Macy’s shopper is also likely already a Pinkberry consumer, too. Thus, fans of both brands are already familiar with the other company, and if they’re only familiar with one, they’ll have a wide open opportunity to try the other.

This harkens back to the power of co-branding, which I talked about in my very first blog post(!) when I discussed the potency of Taco Bell and the Doritos Locos Taco. Co-branding associates two distinct brands at once, and if it works well, consumers remember not just one but two brand names at the end of the experience. Any fan of Taco Bell also knows the Doritos Locos Taco. A fan of Harry Potter may associate Universal Studios with the enterprise. Universal is owned by NBC, which has little link to Harry Potter otherwise, but its theme park broadens its fan base. And so on.

One downside to this new trend is that consumers allow retailers to dictate which foods we eat and make our dietary assumptions for us. Not wholly, of course; we can always exit the store. But their plan is to keep us in there for as long as possible, and if a store ever opened a taco window in its clothing or shoe department, I’d be hard pressed to say no.

The Problem That Spanx Covers Up

Spanx before and after. Credit: CottonTrendy

Spanx before and after. Credit: CottonTrendy

Spanx, the body-shaping undergarment brand, opened its first storefront at the end of November in McLean, Virginia. Spanx and similar garments have primarily been sold in department and clothing stores. Now, the company hopes to compete with Victoria’s Secret to become a brand for the “everywoman.” Hooray! Right?

Spanx has been famously used by women to shape their bodies by smothering flab and slimming unwanted bulge. That’s not to say it’s used primarily by heavy women; even some normal-bodied women enjoy Spanx to shape curves.

I’m all for a brand that boosts the self-confidence and body image of women. Absolutely nothing wrong with that. And in a nice move, Spanx has positioned itself as the more everyday competitor to Victoria’s Secret.

But here’s the problem with Spanx: it encourages the everyday woman to think she needs body-shaping. It still nonetheless reinforces the idea that her natural body isn’t quite good enough. She may not be able to attain the angel ideal of Victoria’s Secret, but she still needs something to fix those body flaws.

Remember the Dove ad campaign that promotes “real” women and uses models that are not of the industry’s thin standards? The Dove Campaign for Real Women, as it’s called, “started a global conversation about the need for a wider definition of beauty after the study proved the hypothesis that the definition of beauty had become limiting and unattainable,” according to Dove’s website.

While Spanx takes the time to broaden that definition by inviting everyday women into its stores, the brand may still makes them think they’re not quite up to standard.

As the BusinessWeek article states,

“The sale here isn’t sexiness. Rather it’s about looking healthy and fit—even for those who are neither—and self-affirmation.”

Well. As long as ladies continue to look the part, right?

The Future of Groupon Depends on Goods, Not Deals

As Groupon’s stock has tumbled recently—it is now down 80% from its IPO, at about $4.69—so has the company’s confidence in its leader, founder and CEO Andrew Mason.

Screen shot 2012-12-09 at 4.23.05 PMThat’s because the company’s strategy of selling discounted deals to local restaurants, shops, and entertainment venues isn’t profiting like it did at its debut. LivingSocial and other competitors rose up. People grew tired of Groupon’s ceaseless emails.

And though brands that participate in Groupon deals may prosper from increased awareness and customers, the deals themselves really don’t make participants much money. For example, if a restaurant sells a deal worth $50 for $25, it only makes $12.50 off the transaction. That’s a 75% loss.

(Here’s a breakdown of how Groupon makes money off deals, from an article I wrote for FSR magazine last year.)

The one bright spot in all this, perhaps, is that Groupon goods are accounting for more revenue at the company than its deals. This means that Groupon could reposition itself as a direct seller of goods, like Amazon.

The Journal article states:

“Direct merchandise sales like television and jewelry should improve the company’s overall revenue growth, though its profitability is threatened by fiercer competition from the likes of Amazon.com Inc. (AMZN) and eBay Inc. (EBAY).”

So what’s the next step for Groupon, given this? Perhaps a pivot into retail territory. It could keep selling deals as an offshoot, which would differentiate it from competitors such as Amazon and eBay, but a brand needs to a) know who is buying its products and b) continue to offer what is profitable. At some point, those discount deals will cost more than they are worth, and those nifty hair straighteners and wine openers known as Groupon goods will be the future.

Want A Rolls-Royce For Christmas? Good News, It’s Expanding

If you want a Rolls-Royce for Christmas but are having trouble finding it, the company has good news for you: it plans to expand its dealerships from 105 to 120. Phew. I just didn’t know what to get my family until I heard this.

My Christmas gift to my parents.

My Christmas gift to my parents.

Jokes aside, there is something to be said about Rolls-Royce doing well enough in this economy to expand. I have to wonder how in-demand the brand is. According to the BusinessWeek article, Rolls-Royce has been unfazed by the European debt crisis (it is based in England), and in 2011, the brand sold a record number of 3,538 cars.

There was a possibility that Rolls-Royce’s strong performance could mimic a comeback in the economy, but the article says that the leaders at Rolls-Royce admit there’s a possibility that developed markets could slump.

A company that specializes in luxury goods needs to be hyper-aware of which markets boast unencumbered wealth. Rolls-Royce has pinpointed Asia and South America as its growth targets for the coming years. (With its fiscal cliff and divisional politics, it’s little surprise that the U.S. doesn’t make the cut.)

Here’s why all of this matters: There is a lesson to be learned here. Rolls-Royce is a growing company and a smart brand. It knows which geographical consumers to target and which to let go of. It’s not pinning hopes on slowing economies or those stuck in political doldrums. It’s being realistic in a lazy economy and it’s teaching many other brands a lesson along the way.

As Apple Leaves Steve Jobs’ Ideas Behind, Competitors Catch Up

Let’s be serious: Steve Jobs never approved of the iPad mini. Yet here it is, available for users to play piano medleys of Heart & Soul and do whatever else they’d like on it.

 

Steve Jobs with the original iPad

Apple CEO Tim Cook took the stage last month during an Apple event and introduced the iPad mini and a smaller MacBook pro, among other items. As Forbes contributor Nigam Arora wrote, there was nothing flashy at this Apple event. No “wow” factor, no introduction of never-before-thought-of products—instead, there were simple improvements upon preordained products.

Why has Apple stopped introducing those mindblowing products? Where’s the mini music player that we all gaped at in 2003 before integrating the iPod into our lives and now being unable to live without it? Where are those flashy laptops with the pretty, indented apple logo that don’t run on Windows and are inherently intuitive? Why does the iPhone 5 have so many issues?

I guess it all leads up to the grand question: Where is Apple these days?

Let’s find a solution. Here’s a crash course in the basics of branding: it begins with defining your company’s personality or identity and building off of that.

Rob Frankel, an author and branding expert in L.A., spoke to BusinessWeek about branding and had some wonderful advice that Apple and Tim Cook may want to consider:

“Branding is about getting your prospects to perceive you as the only solution to their problem. Once you’re perceived as ‘the only,’ there’s no place else to shop. Which means your customers gladly pay a premium for your brand.”

Is the iPad mini going to continue to convince customers that Apple is the only destination for 7 inch? No. Absolutely not. Samsung has the Galaxy Tab. Google has the Nexus. And Amazon has the Kindle (Fire).

As Apple steps further and further from the revolutionary ideas that defined it in the first place—from it’s personality—its competitors are catching up.

Check out this article from BusinessWeek, describing how Samsung is the brand that’s hot on Apple’s tail. In fact, the article reports that Samsung outsold the iPhone during Q3:

“Strategy Analytics says that more Samsung Galaxy S III phones than Apple iPhone 4S handsets were sold in third quarter of this year. Samsung Electronics moved 18 million such handsets, while Apple sold 16.2 million during the three-month period, says the research firm.”

I can’t decide whether competitors are catching up to Apple now because it was only a matter of time, or if it’s because Apple has quit being the innovative powerhouse it once was. What I do know is that when my cell phone contract runs up, I’m considering ditching my iPhone for the Samsung Galaxy—and I never would’ve thought to do that two years ago.

The Truth Behind Whole Foods’ Appeal

Credit: Creative Commons

We all love shopping at Whole Foods, don’t we? The prices may be high (a myth I am about to debunk), but the interior is shiny, alluring, and has samples.

As a brand, Whole Foods has a reputation for clean, fresh food, especially if you have a special diet regimen such as vegan or gluten-free. It’s also well-known for its emphasis on employee healthcare. The Whole Foods healthcare plan encourages workers to work out and stop smoking in order to pay less for health care.

But, back to the point. How does Whole Foods remain so appealing to its shoppers? An article in BusinessWeek breaks it down for us (with fun cartoons!).

The highlights:

  • Whole Foods used to be overpriced, it says—living up to popular perception—but the recession forced it to slash prices.
    (The question remains as to whether Whole Foods needs to promote its brand as cheaper now. Will a post-recession advertising campaign talk about its lower prices? Or will doing so draw attention to the fact that its prices were high in the first place?)
  • Employees are encouraged to do things for customers, such as cut melons in half for the to purchase or open boxes of food for them to taste, if they ask.
  • The main competition for WF is Trader Joe’s. As a result, almost all of the groceries put out by WF’s store brand, 365, mirror TJ’s prices.
  • Feel like you’re filling up more in your WF shopping cart these days? That’s because the company has increased the size of its carts over the past three years, citing an ability to grow revenue by 40 percent.