Does a Brand Need to Die Before It Can Be Resurrected?

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Many of the legacy brands that recently shuttered stores are relaunching under new concepts: from Milwaukee-based retailer Boston Store relaunching as an online-only brand with physical aspirations, Toys \’R\’ Us relaunching as True Kids, and even poor old Sears/Kmart starting over with small format stores and a more concrete marketing strategy, it\’s beginning to look like a brand needs to be abandoned before it can start again.

Customers can be quite forgiving of a brand\’s faults once they\’ve witnessed a staple brand from their childhood (temporarily) disappear. Nostalgia is a driving factor in modern retail– anyone who doubts this just needs to head over to their local Urban Outfitters to see how Caboodles makeup totes, disposable cameras, and even unlabeled bundles of old VHS tapes are once again hot ticket items to see how far customers will stretch their wallets to experience a small taste of what once was.

But, when a brand goes under is it really the customers that rally to save the brand, or is it that company ownership finally becomes ready to make some much-needed changes once things start looking unsalvageable?

Consumer Sentimentality Give Toys \’R\’ Us New Life

Toys \’R\’ Us was one of the most lamented store closures in recent years. When the toy chain announced that it wouldn\’t survive bankruptcy, sentimental memes of Geoffrey the Giraffe reigned on social media and it seemed everybody had their own personal story about how their grandpa/nanna/auntie would take them to visit the store growing up. Short of a candlelit vigil, there was little customers wouldn\’t do to save Toys \’R\’ Us from its impending fate, which begs the question \”where were Toys \’R\’ Us brand\’s fans when the store was struggling to stay alive?\” Chances are they were shopping on Amazon.

The truth is that Toys \’R\’ Us was severely overstored, and the stores it had were way too big to create the intimate, service-oriented shopping experiences that toy stores need to merit customers paying higher prices for the brick and mortar experience. The retailer\’s claim to fame were its options. In an era where customers have access to more toy options by browsing WiFi on their smartphones, Geoffrey the Giraffe failed to give customers reasons to keep coming back.

But there\’s something about the death rattle of a beloved brand that makes customers willing to forget that it failed to differentiate. Just a year after Toys \’R\’ Us announced store closures, the company has found new life as Tru Kids, opening 70 stores across Asia, India, and Europe. But that\’s not all… Richard Barry, Tru Kids Inc. CEO, will reportedly launch six small-format (10,000 square foot) Toys \’R\’ Us stores across the U.S. along with an ecommerce site. The new stores are going to be experience-focused and the warehouse vibe of classic Toys \’R\’ Us stores will remain a thing of the past.

Change Was Overdue for Sears/Kmart and Boston Store

Boston Store and Sears have a similar story. Although both brands forged lasting connection with customers in their prime, the two legacy retailers failed to give customers a reason to visit their stores in the face of online competition. Soon consumers and corporate employees alike forgot why they were enamored with the brands in the first place, which led to short-term but much publicized declines (i.e. bankruptcy court). As Mark Cohen, former Chairman and CEO of Sears Canada, said, \”There\’s no leadership (at Sears), there\’s no strategy in place that demonstrates any viability for the future. So, the sad news, which is certainly to me not a surprise, is that this incredible American – if not international – icon is about to disappear.\”

Yet Sears didn\’t disappear. Not for long, anyway, and neither did Kmart. Sears is relaunching as Sears Home & Life, a small-format specialty store with the slogan \”Making Moments Matter.\” Kmart is relaunching as a neighborhood general store with the new mantra \”Love Where You Live.\” The creation of the new Sears and Kmart slogans weren\’t outsourced to outside agencies, but done in-house, which could reflect a shift from top-down delegation to a willingness to draw on the experience and expertise of employees to create meaningful change– which would be wise considering that forward-thinking retailers are staffing stores with highly-trained, more highly paid employees that companies can trust to create compelling brand experiences.

After Boston Store\’s bankruptcy and store closing, on the other hand, the retailer took a page from ecommerce-turned-physical brands – such a Glossier and Warby Parker – by relaunching as a reportedly successful ecommerce site with physical aspirations. The brand\’s new CEO, Jordan Voloshin, is aggressively pursuing multiple small format store openings in the metro Wisconsin area, although the verdict is still out on where and when said stores are actually launching.

Palessi\’s Failure to Launch in a New Marketplace

Unlike the retailers we just discussed, discount shoe retailer Payless wasn\’t able to come back from the brink. Despite the fact that the viral campaign for \”Palessi,\” where Payless opened in an a former Armani store in Santa Monica and sold $20 shoes at a 1,800 percent markup was a raging success on social media, the company wasn\’t able to translate the social push into lasting success. This was in part because of the fact that Payless didn\’t have an online catalog to funnel click traffic from the company\’s trending Palessi campaign and failed to follow up on Palessi in any meaningful way to sustain traffic.

Instead of investing in their marketing strategy and keeping employees informed on company issues, Payless executives chose to invest in aggressive discounting. Former Payless employees cited a slow top-down infrastructure and a failure to relaunch the company\’s ecommerce site as the primary reasons for the company\’s (re)failure. After all, if Boston Store\’s newfound ecommerce success has taught us anything, it\’s that digital and marketing investments should precede physical resurrection post-bankruptcy.

The ever-growing list of ecommerce brands buying stores is evidence that brands need to research their customer base, have a social media marketing campaign that translates to ecommerce ROI, and have an on-brand physical retail experience to lure in customers before building out through brick and mortar retail. Brands such as Sears/Kmart can take a page from Target\’s book by innovating before bankruptcy necessitates it by partnering with digitally native brands. Instead, brands like Payless wind up rushing into re-opening physical storefronts before they have the following (or online store!) to back up their investment.

Do Brands Need the Ashes to Rise?

There\’s something about bankruptcy that makes customers willing to forgive. More importantly, bankruptcy creates change. In some cases, it makes legacy retailers willing to make the changes they\’ve been procrastinating, such as: opening smaller format stores, partnering with brands and influencers with a strong online following and targeting a niche market instead of trying to be everything to everyone. In others, new management steps in to make the changes their predecessors wouldn\’t.

Top-down thinking needs to change. In many cases, a retail employee on the ground-floor has access to company insights that high-level corporate executives have no way of knowing, so it\’s time to find ways to open up those lines of communication. Yet all too often the employee voices on a company\’s ground floor are the last ones that executives are willing to hear.

So, to harken back to the original question: Does a retail brand need to die before it can be resurrected? Yes, but a brand doesn\’t need to go bankrupt in order to start over… management just needs to be willing to revolutionize the business from the ground up. When a fear of stagnancy replaces a fear of change, retailers won\’t need to go under to stop doing things how they have always been done.



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