Brand Attribute #2: Diversified Portfolio

You either pursue this attribute as part of your strategy, or you don't. Simple as that.

Think about Macy's ... one company. Either the company wins, or the company loses. If it wins, it wins big! If it loses ... it sells off real estate to stay afloat.

Think about J. Crew. While J. Crew stumbles, Madewell appears to thrive. They have a portfolio of two brands, don't they? It's bad when J. Crew suffers ... but it isn't the end of the world.

Think about Gap. While Gap and Banana Republic struggle, Old Navy does ok. They have other brands as well. Their portfolio is more diversified.

Think about Williams Sonoma. They have a larger portfolio of brands, many of which are successful.

Sears / K-Mart? That's a portfolio that isn't doing so well.

I once spoke with a Professional at a conference - he built companies from search - up to about $3,000,000 in sales and $300,000 in annual profit. He sold the companies that worked, he shuttered the concepts that didn't work. He viewed his business as a "diversified portfolio".

Companies either possess this attribute, or they don't ... Wal-Mart is headed in this direction with Jet and ModCloth and others. Catalog Holding Companies exemplify this dynamic ... individual brands have minimal value as a "brand" ... they're part of a diversified portfolio that allows the cataloger to survive tough times and minimize customer acquisition expense by encouraging customers to cross-shop while sharing corporate expenses across brands.

Diversified Portfolio brands incubate ideas ... what might work at Pottery Barn might not work at Williams Sonoma ... but you have places to try ideas without tanking the "overall brand" ... because there really isn't an overall brand.

There's no better example of a Diversified Portfolio than Amazon ... thousands/millions of sellers competing, with Amazon winning. So what if 10,000 sellers fail, as long as Amazon wins (from an Amazon perspective)?

We're going to see more consolidation going forward ... consolidation leads to a diversified portfolio. A diversified portfolio minimizes risk. If you are Vermont Teddy Bear, you run a risky strategy in a modern world - if your merchants fail, you fail. If West Elm merchants fail, Williams Sonoma is still in good shape.


P.S.: One last point about Wal-Mart ... one could make a strong argument that they are an Omnichannel Zombie. So if that's a brand attribute that is negative, the attribute can be offset by offering a Diversified Portfolio.

P.P.S.: A follower on Twitter elected to criticize me (#shocker) - pointing out a handful of diversified portfolios that failed. Duh. I'm not saying this is the path to success ... I'm saying this is a path that minimizes risk. The best companies leverage the positive aspects of each attribute I will describe while minimizing the negative aspects of each attribute.