May 22, 2016

Lands' End - Wall St. Journal Article

You probably read the article in the Wall St. Journal a few weeks ago, but if you haven't and are not a Wall St. Journal Subscriber, go into Google and type these words exactly ... New Lands' End CEO Delivers High Fashion - and a Culture Clash, then click through the WSJ link and you'll be able to read it (you can try this link first).

I'm going to talk more about Brand Ecosystems this summer.

Describe the traditional Lands' End brand ecosystem - circa 1999.
  • Catalogs.
  • Quality.
  • Customer Service.
  • No Discounting ("We Will Never Create A Fake Markup And Then Discount - Gary Comer - Founder - Lands' End").
  • Basic Merchandise.
  • Basic Presentation.
Then describe the Lands' End brand ecosystem - circa 2012. 
  • Catalogs, E-Commerce, Sears Stores.
  • Customer Perception of Lower Quality.
  • Customer Service.
  • Rampant Discounting (Destroying The Promise Of The Brand, But Mr. Comer Isn't Here Anymore So We'll Remove His Words From His Creed, Who Cares, It's As If It Never Happened).
  • Basic Merchandise.
  • Basic Presentation.
The theme was that "Sears Ruined Them". The company was spun off. A new CEO was brought in.

Describe the Lands' End brand ecosystem that is coming.
  • Catalogs, E-Commerce, Sears Stores, Engaging Content, Shedding Traditional Catalog Customers, Digital Initiatives.
  • Customer Perception of Lower Quality.
  • Customer Service.
  • Modest Reduction in Discounting.
  • Move to Fashionable Merchandise.
  • Move to Fashionable Presentation.
  • Additional Brands.
Now go read the comments in the article. Former employees, "former" customers, and pundits are all piling on, with a common theme ... "PLEASE GO BACK TO THE WAY THINGS WERE IN 1999".

The company that Gary Comer sold that Mike Smith led is not coming back. Is Seinfeld coming back? Jerry Seinfeld is sixty-two years old. Sixty-two!!

When Lands' End was spun off a few years ago, it was the same size it was when Mr. Comer sold the brand a decade-and-a-half earlier. And it was in hundreds of stores. And it moved to discounting (discounting/promos grow sales, right?). Back those two factors out, and merchandise productivity likely declined by 20% or more.

What you have, then, is a patient that was sick. Very sick. Stage four slow-growing cancer. And the new CEO comes in and is in the process of applying chemotherapy and radiation to the patient. She might kill the patient. The patient might die anyway. Or she might return the patient to health.

Decisions have been made over seventeen years - and the world has changed over seventeen years. You cannot go back to 1999, no matter how loud the former employees and associated customers/pundits yell in the comments section of the article. Ask any cataloger ... every cataloger is dealing with this issue ... most catalogers still act like it is 1999 and they are not growing, so the prescription cannot be "go back to 1999".

What we do know is that the track record of brands applying chemotherapy and radiation and having instant sales success / growth is, well, not good. Look to JCP for a case study. But notice something about JCP. When JCP went back to doing what they were doing, sales did not rebound. And now sales are falling at JCP once again. Going back to doing what has always been done appeases a few of the boisterous nostalgics and 60% of the existing customer base. It does not solve the core problem ... the core problem is that the brand is sick.

Here's what I want you to do. I want you to play Doctor. Lands' End is sick, and you cannot shave seventeen years off of the age of the brand ... just like when you are sick and you are 55 years old and cannot go back to being 38 years old. You have to fix what you have, and you cannot go back and make things like they were. Please answer the following question.
  1. How do you position yourself as new/interesting to new customers while positioning yourself as being "the same" to existing customers ... how do you do both at the same time?

P.S.: One of the terrifying things companies like Lands' End have to deal with is the concept of a "local maxima". Look at the graph below.

Look at the peak of the curve at the x-axis value of about -1.5 ... what if that is where Lands' End is, and the only way to get to x = 4 on the graph is to go through what they are going through? And conversely, what if they are going down the path at x = -4? You never know. But the critics, well, they jump all over any decision that takes a brand off of a local maxima.


Advertising is largely a rental platform ... you rent space or paper or a click, and it's your job to demonstrate that you made a goo...