The Decline of Brands
November 5th, 2004 | Published in Out Loud
OK, I saw this Surowiecki story linked on kottke.org, so I read it. And it’s a typically simplistic/provocative thesis (in this case ironic as well), the kind Wired should have patented by now. I used to be an editor at the magazine in its earlier days, so I’m familiar with the approach. But as is more frequently the case, Wired’s all flash and bang, with little substance after that. In other words, the article rings hollow.
Why is it that every large magazine treats its readers like idiots? Reporting is good, analysis is good. Teach me something, dammit! Advance the argument!
Surowiecki’s story is about the “decline in brands”. I don’t know what this means. He seems to have adopted an earlier definition of the term “brands” – one only a couple generations removed from “cattle marking”. Today’s definition of branding has far surpassed “trademarks.” It encompasses all of a company’s interactions with consumers. Everything counts in the big equation.
Wal-Mart Is the Ultimate Brand
Yes, there are a lot of brands today – there are a lot of companies. This would create pressure on consumer loyalty on its own. But, as Surowiecki fails to mention, we live in a society commanded by Wal-Mart and hypermarts. Today, America shops – wittingly or unwittingly – based on price. It’s the Wal-Mart way. Wal-Mart drives an increasingly harsh bargain with suppliers, demanding ever-increasing discounts. Wal-Mart’s “brand” is based on a foundation of lower prices. And it’s the Wal-Mart “brand” that has grown to eclipse all others.
In addition to price competition, we are enjoying the fruits of a better, faster distribution system. FedEx, UPS, Wal-Mart, Amazon.com – all these companies have played important roles in helping shape how we get products from overseas to store shelves (or our doorsteps). This has helped open US markets to many new companies, here and abroad, and this has in turn increased pressure on price sensitivity.
The biggest explanation is “swelling strength of the consumer”? WTF does that mean? The people that drive Wal-Mart do not spend their days combing the Internet for product reviews. This is a massive myth. The strength of the consumer lies in the price sensitivity that Wal-Mart has driven like a stake into the minds of US consumers. It’s drilled into us every day that lower prices are what matters.
Also—Epinions blows. There’s hundreds of actual review sites available that provide far more valuable information than Epinions. Plus, have you ever been to Amazon? Their reviews are far more numerous and more likely to contain useful information. Epinions has been search-engine optimized so it shows up a lot in Google searches. That doesn’t mean there’s anything useful behind that link. Get a clue.
The “What Have You Done for Me Lately? economy.” (sigh) Why does every idiotic idea at Wired have to be an “economy”. You guys are becoming a parody of yourselves. I blame Surowiecki’s editor for that one.
As for Sony, the company is in trouble because it’s entertainment arm has forced it to develop shitty products that no one wants. Again, it’s the company’s actions that define its brand.
Fashion prices falling? That’s nice. But what’s happened to sales and profits? Private label products can allow a manufacturing plant to stay efficient, by keeping machines running and people employed, while it addresses lower end markets it wouldn’t otherwise touch. Efficiency trumps price, for the simple reason that it lowers costs, allowing a company to compete on a more crowded field. (Again, a function of Wal-Mart’s influence.)
What Does Loyalty Mean, Anyway?
I wholeheartedly agree that consumers will have more power in the future, but not because brand loyalty is dying. A consumer is loyal to a company because there’s a relationship the consumer is interested in maintaining. A company is not your friend. You don’t hang out and BBQ with Nokia. They make stuff, you like the stuff or you don’t. Besides, it’s a friggin’ phone, probably one of the most commoditized electronics on the face of the planet.
It must be pointed out that Apple’s loyalty goes far beyond the iPod. There are legions of devoted Mac users who could care less about what the company does or what kind of iPod it’s releasing. To ignore them is to be disingenous at best.
A pretty sticker on a box does not make a “brand”. Any seasoned marketer will tell you this. A brand is irrevocably tied to its customers, piss them off and yes, they will leave and your brand will suffer.
What insight is there to be had in telling us what we already knew we knew?.