The proper way to the beach

 

I was taught the planning cycle at a relatively early age - not quite as early as my times tables, but I had it drummed into me in a similar way. 

Where are we now? (With our brand or business)

Where do we want to be?

How do we get there?

Are we getting there?

I have the feeling that because the whole area of marketing has exploded into so many specialisms, t the focus has slipped right onto “how do we get there” in its intricate detail of touchpoints, new tech, personas and all the rest without any consideration of where we’re going with this and why.

I recently had a brief that went along the lines of - we have to develop an app that’s going to do x, y & z - without any thought given to why, or even who this app might be for.

I’ve seen this wonderful picture recently from The Proper Marketing Club (Matt Dillon) , which gently reminds marketers of the starting point if you want to be the brightest brand on the beach.

Even if your business can’t afford stacks of ad-hoc quantitative surveys, desk research on markets and trends plus a couple of questions on an omnibus and a few intelligently-conducted stakeholder interviews are always a good start.

 

The new Caroleans

 

I’m skulking around my country of birth at the moment - nothing exciting, dealing with the aftermath of a burst pipe. These visits satisfy - to some extent - my yearning for home, and a simpler place and time. Although again and again, I’m reminded that it’s probably a yearning for something that never really existed, except in my mind.

I was here for Queens Elizabeth II’s funeral last year, but it looks like I won’t make the coronation in May as musical commitments call. However, it was nice to be here as the emblem (not logo) for the coronation was announced (not launched or - heaven forbid! - “dropped”). It’s rather lovely and rather charming, with the rose, thistle, daffodil and shamrock reflecting the King’s love of nature. The designer describes it as “gentle” and that hits the spot.

It’s infinitely better than some of the ghastly Olympics logos we’ve seen - and I suppose at least it doesn’t look as if His Majesty picked it up at Fiverr or 99Designs.

But. Part of me remembers a past when Britain was brave and bold and forward-looking, at least in design terms. It happened long before I was born, but the Festival of Britain posters and style is something that has always been at the back of my mind when I think of the start - and promise - of  the New Elizabethan age.

And I make no excuses for linking to this for all design fans to revel in. Perfection.  

RETROWURST: Armani meets Aldi February 2005 Mark 2

 

Sometimes trends become - quite simply - part of the accepted fabric of life and you wonder what on earth the fuss was about, or why such a phenomenon was ever considered worthy of comment. Apart from giving journalists and trend forecasters a chance to exercise their creativity in coming up with a silly name.

But back in 2005, a younger me was excited as anyone about the mind-blowingly amazing news that Karl Lagerfeld was putting out a collection for H&M. Imagine that!

Was this a taste of things to come? Could we maybe expect the much-maligned “middle” to disappear in a puff of mediocrity by 2020?

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This month, I’m going to write about a general trend that I’m sure is prevalent in other markets too, but I thought you might like to hear how this is affecting the German market in particular. It’s the trend variously called “Armani meets Aldi” or “Prada and Zara”, which is best symbolized by legendary designer Karl Lagerfeld putting out a collection for H&M last summer. Now, the collection will probably never be repeated (apparently Lagerfeld was upset that H&M produced his designs in sizes a little bit bigger than those to fit the average stick insect, which is rich coming from him as he used to be quite a porker himself!) but what the whole action represented was an important milestone in the development of this trend.

 

The trend itself is characterized by the growth of the luxury and discount sectors of many markets and the consequent shrinking of the middle. It’s estimated that in 1980, the middle-price segment represented 49% of sales but it is predicted that this will fall to 20% by 2010 at the expense of growth from the luxury and discount sectors. In contrast, discounters are estimated to have accounted for 38% of sales in 2003. Companies such as Porsche and Gucci on the one hand and Aldi and Lidl on the other are enjoying growth, while the traditional middle segment, such as retailer Karstadt-Quelle or car manufacturer Opel is suffering here in Germany.

 

The consumer behaviour that is fuelling this trend can be variously described as “trading up/trading down” or “mixing”. Instead of spending our cash on the ‘safe’ middle, we are ploughing what we’ve saved at the discounter into the new luxury segment. This behaviour can be traced back to a number of factors in Germany; shopping at the discounter was a necessity for many, including new groups of people hit by the last recession from which we’re just beginning to emerge. Another factor is the new responsibility that people are beginning to take for themselves; instead of relying on the tried and trusted ‘safe’ brand names, I’ll decide for myself in which areas I save and in which I splurge! This feeling has now translated into a perception across all bands of society that it’s no longer prestige just to buy expensive things; those who are really clever and ‘in the know’ can tell you exactly which manufacturer produces which Aldi goods! The discounters have not been slow to pick up on this trend and are broadening their offer accordingly. Aldi, for example, makes €1bn from clothing alone and is the 7^th largest textile retailer in Germany.

 

Within areas other than retail, brands are picking up on the trend. A good example is the Korean car manufacturers Hyundai and Kia. These brands are deliberately attacking the value end of the car market with emphasis on quality and design. Hyundai recently ran advertising under the headline “Es gibt wieder richtige Volkswagen” (“Now there are real Volkswagens (peoples’ cars) again”). Both these Korean brands are enjoying double-figure growth in a stagnating market. In all branches, those that offer design at a good price are winning, from H&M to IKEA.

 

Part of the problem of the middle market is that the discounter products are, in many cases, as good. It is really not worth paying a little bit more for a brand name, especially when Aldi is a strong brand name in itself these days. The middle-market brands can no longer rely on their brand name; they must find a way upwards to the new luxury market and offer something worth having. The new luxury market is based on the principle of offering ‘specialness’ in fields where the basic price is not so high. In this way, Danone’s Actimel yoghurt can sell quite happily at a price premium of 100-200%. It is expensive (but jusitified, due to the L.Casei bacteria!) but affordable.

 

Some of the traditional middle-market brands are beginning to incorporate ‘luxury’ elements into their offer or communication in the hope of winning back customers. It is certainly true to say that the boundaries of what is discount, what is mass and what is luxury are becoming more and more blurred but it is questionable whether these actions which are not unique or an integral part of the brand concept will be powerful enough to buck the trend. For example, the mass-market mail-order catalogue Otto now has collections from Heidi Klum and Claudia Schiffer (have they not noticed that the old Supermodel trick has been used to much better effect by H&M for the last ten plus years?). C&A now have TV advertisements with super-high top fashion production values but at the end of the day, you can’t make a silk purse out of a sow’s ear.

 

Maybe the German middle-market brands should learn from M&S in the UK; increasingly, this is all about personalization, not about buying into a ‘blanket lifestyle’. It is about picking and choosing to suit oneself across categories, styles and price-bands. It is also about substance and attention to detail. A final example of the ‘new luxury’ is the Internet shopping site www.brot-und-butter.de .Here we see “everyday products but not everyday quality” (the cynical could add something about ‘not everyday prices’, too!).

This has all the elements of specialness, individualism, authenticity and a touch of luxury that I can afford. I imagine that it won’t be long before Aldi offer a similar selection of ‘special everyday’ products to go with the €12.99 champagne!

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It’s true to say that this “trend” has simply become a way of life - fashion designers, influencers, TikTokkers and probably activists can all have a go at doing a collection for Lidl or Aldi. It’s no shame for Gucci and The North Face to use a super-nerd in their brand communication. And grocery discounters don’t just have “everyday luxury” food ranges, but ironically branded fashion items, too. 

And, on top of that, I think that sustainability and a shift in values have led to questions: what is luxury? There are some thoughts on that here. And what is discount? Is it cheap at any price (to the environment or society?). How do people’s priorities shift in times when we’re more cash-strapped? I’m reading a lot about the “lipstick effect” in all of this year’s trend reports. But the question is not so much whether but what - maybe this time we’ll be giving something a second life rather than splashing out on something new to treat ourselves. Doing good to the conscience and the wallet.

... and, well I never! I blogged on exactly this article this time last year. “Giving something a second life."Whoops. The system is out of sync. Oh well, I’d already taken the picture, and some of the thoughts are new.

Talking of which, the “middle" is still here - especially the “spare tyre”. It’s a mark of what does change. 

Can anyone imagine Karl - should he still be alive today - having the audacity to complain about his clothes being made in sizes beyond that for a stick insect?

WFO(AH)

 

Do you know that feeling? You discover a perfect little restaurant tucked away somewhere, then before you know it, it’s featured in some fashionable magazine or the latest influencer swans into it. Your little secret is secret no more.

I feel the same about my working arrangements as a freelancer, especially now that the sharks are out for that recent acronym, WFH. The good, not so good, great and think-they’re-great of the Davos set are proclaiming that “remote working has not worked.” That was Larry Fink of Black Rock, apparently.

Meanwhile, at the other end (?) of the political spectrum, certain journalists are having a bash at “the pyjama classes” and “the laptop elites.” I have some sympathy with this view, having seen efforts from ad agencies in 2020 featuring every WFH cliche going: the pyjamas and jogging pants, the dog/cat/kids invading the Zoom conference with its silly, jokey background. Meanwhile, there weren’t any people featured in these Covid vignettes who were out there doing a job, keeping the world running. And yes, it make me wonder about the value of what I do here ...

But there’s a difference. I have been self-employed for twenty years now and I started without a laptop, just a cheap Aldi computer,  a Freenet email address and a trusty Nokia mobile phone. Within 18 months, I was lucky indeed: we bought a house and the top floor became my office. From the start, I was disciplined, although it was against my nature - but I had to be, starting out in business with a toddler in tow.

Having an office space (which happens to be in my home) does make the difference. There is a door, which I can shut. A whole weekend can go by without me going upstairs to the top floor. Sometimes I am up there evenings, or for a few hours on Sunday afternoon, working, but that’s usually my choice. The clue is in the term “self-employed."

This isn’t meant to be a whinge about being lumped in with everyone else who was forced into WFH in 2020, although it does sometimes feel to me like my experience with gin & tonic - something I’ve always enjoyed, which became terribly fashionable but is now on the wane again. All  I want is to make a simple distinction: I’m working from an office - which happens to be at home.

WFO(AH). 

My most helpful brand of 2022

 

With all the trend reports and round-ups of 2022 I’ve been reading, I gave pause for thought. What has been my favourite brand of the last year? I was tempted to go for something that had done brilliant brand communications, but realised pretty quickly that I’d probably only seen those communications by reading Campaign and the rest of the trade press.

Rather, it’s a brand that entered my life just over a year ago, and one that, in the words of the “meaningful brands” questionnaire, I’d be genuinely upset if it disappeared. 

It’s DeepL. In November 2021, I was searching around for a decent online translator that would do a better job than my memories of Bing, or Google or Facebook. I’m still not sure whether DeepL found me or whether I found DeepL, but does that matter?

It’s a quiet, unassuming, unobtrusive brand - in fact, I’m not sure whether it officially thinks of itself of a brand or not. But it has a logo and a look, so I’ll give it the benefit of the doubt. What is certainly true is that I have developed an extreme loyalty to DeepL over the last few months and it has become ingrained in my working life, particularly when I’m working with predominantly German clients, as has been the case recently.

DeepL is just one of many AI-based brands that I’ll be getting used to using in my work. The next one could be ChatGPT - but that’s a story for another day. 

RETROWURST: Tchibo January 2005

 

What tickles me about some of the Retrowurst articles that I unearth is the sheer sense of glee I evidently had in writing them. Take the following article, written in January 2005, when I was clearly in thrall to Tchibo, if not completely enchanted by the brand. “Starbucks meets Innovations!” - not my words, but that obviously captured my imagination regarding this strangely German institution. No wonder, perhaps - Tchibo at this stage was Germany’s third largest “internet retailer” (how quaint) after Amazon and Ebay. Why, I even believed that Tchibo were aiming at offering mass market trips to the moon.

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To start the new year, I thought I’d write a piece on a familiar face on German high streets for 50 years, which has recently also found its feet in the UK (if you’ll excuse the mixed metaphor); Tchibo.

 

In a retail climate which seems beset by losses, redundancies or desperate attempts at ‘pile it high, sell it cheap and scream about it’, Tchibo is one of the few retailers that are actually doing reasonably well here, along with Aldi and Ikea. This does seem to have something to do with having a good concept and sticking to it but Tchibo’s concept does really seem quite weird at first glance. I saw it described as ‘Starbucks meets Innovations’ on a UK website and I think it really is an example of a concept that has evolved through mutation and adaptation to be successful. That is, it is a concept that would have been strangled at birth had anyone had the audacity to come up with such an idea in the post-war 1949 German version of a brainstorming.

 

Tchibo is currently a concern with 10,000 employees and 54,000 purchase outlets in Germany. As a retailer, it has 99% awareness in Germany. Tchibo sells not only coffee but also household goods, flowers, mobile phone services, insurance and holidays. You can buy goods and services from Tchibo via their shops, from store-in-store in the supermarket or bakery, via the magazine or mail order or over the internet. Their ambition is to offer the first mass market trips to the moon.

 

However, none of this happened overnight and one can quite understand the initial wariness of the Dutch, Brits or Poles when confronted with the full-blown Tchibo concept 2005. Tchibo had very a simple and one-dimensional concept at its birth- the company was established by Max Herz and Carl Tchilling-Hiryan in 1949 as a mail-order coffee company. The name Tchibo actually comes from a mix of the name Tchilling with the word for ‘bean’ in German, Bohnen.

 

The first Tchibo shop opened in Germany in 1955; what was unusual was that people could actually try the coffee before buying. Moving this to its next logical step, Tchibo set up mini-stores in bakeshops in 1963, where people could eat a roll or cake and enjoy a cup of coffee at the same time, not forgetting to buy a pack to take home with them. In the next decade, in 1972, the third ‘prong’ of Tchibo’s concept was introduced; the launch of weekly-changing consumer goods under the TCM brand name. The first goods offered were not a million miles away from coffee, being mainly kitchenware. However, Tchibo gradually branched out into other areas such as home textiles and fashions. By 1996 the mail-order arm was established and Tchibo made its first offers in the holidays and tourism category. In 1997 Tchibo went online and is now Germany’s third largest Internet retailer behind Ebay and Amazon. The late 90s and early 2000s saw Tchibo continuing its international expansion with the first shop opening in the UK in 2000.

 

Perhaps the biggest clue to Tchibo’s success is to look at its customers. With a consistent promise of change, ‘Jede Woche eine neue Welt’ or ‘A new experience every week’, Tchibo taps into and reconciles one of the biggest paradoxes in our lives- the need for stability and consistency and the need for change and newness. The result of this strategy means that many customers simply become Tchibo junkies. Tchibo is like a drug, complete with withdrawal symptoms if one ‘misses’ what’s on this week. According to the market research company Icon, 42% of Tchibo’s customers are ‘Tchibo lovers’ or the extreme loyal. Even Ikea with its cult following and over 30 years in Germany can only boast 23% of its customers being ‘Ikea lovers’, according to Icon. On a consumer forum recently, a 23-year-old woman and self-confessed Tchibo-junkie admitted to being so impressed with an ‘Italian eating’ week at Tchibo that she immediately wanted to buy the full range of products on offer. Finding this a bit embarrassing, she bought half of the items at one Tchibo shop in the morning and the remaining half in another branch that afternoon!

 

What factors have made Tchibo so successful, apart from the consistent inconsistency (!) of its product range? First and foremost, Tchibo is part of German history which imbues the brand with trustworthiness, loyalty and a feeling that ‘you can’t go wrong’. This history is reinforced by the logo and colour scheme of a steaming coffee bean in gold and dark blue which acts as a positive emotional anchor, literally sending a warming glow straight to many (23m households) German’s hearts. For many Germans, Tchibo’s advertising campaign from the 60s and 70s, featuring the same actor throughout on a quest for quality coffee on behalf of the people remains fresh in their minds.

 

Tchibo also has a role in making life easy for people. Arranging the consumer goods by themes rather than categories and offering only one choice per item (or, in the case of clothing, only one colour and a limited range of sizes) takes much of the time and uncertainty out of shopping. One assumes that Tchibo has done the work and research to select the best asparagus steamer; if camel is not my colour then I need look no further at the cashmere sweater on offer- take it or leave it; everything is simple. Another element to take it or leave it is ‘take it now’ as it is almost guaranteed not to be there next time I look; with the weekly turnover of offers and a new theme each week, Tchibo thrives on impulse purchase. Tchibo also has a pretty good knack of choosing themes and items that hit the tastes of the early majority. Tchibo send their scouts to ‘where it’s at’ - Tokyo for electronics, Milan for fashions or Canada for skiwear to check the pulse of the market. They are generally very good at gauging what’s about to be hot for the middle-market; some classic successes in Germany are the asparagus steamer, which appears every two years and one-offs like the ‘Jan-Ulrich bike’; a specialist bicycle for only €399 which led to mass-hysteria in the Tchibo stores. Of course there are flops too; in Autumn 2003, Tchibo tried to sell 1000 special-edition Fiat Stilos but this went down like a cup of cold coffee. A flop on a similar scale was a planned ‘Concert Event of the year- The three Divas’, featuring Whitney Houston, Natalie Cole and Dionne Warwick. Instead of the 200000 planned, the audience was a mere 45000.

 

The factor that perhaps best encapsulates Tchibo’s success is another paradox. Despite their size (and it is well-known that they now hold a majority stake in Beiersdorf and have their eyes set on ownership, although this is played down in public), Tchibo still gives the German public the impression of a small, local concern. This impression is partly derived from the ubiquity on the one hand but small size on the other of their outlets and from the limited at any point in time but rapidly changing product range. Tchibo are well-aware that others are hot on their heels with their own version of some of these success elements; Aldi for one have started ‘theming’ their weekly offers, be it ‘riding’ or ‘back to school’ and Aldi products are even more reasonably priced than Tchibo, although there is never a cup of coffee thrown in!

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Eighteen years later, Tchibo still operate on the “simultaneous need for consistency and novelty” principle, but in my eyes they need to dial up the “novelty” part of that. Too many others have latched onto the same formula. While I guess they haven’t actually drowned in the great digital transformation wave, I do feel Tchibo is stagnating, stuck in the doldrums, which is apparent from the sales figures which have declined since the glory days of the early 2000s. 

Every week, with reliable tedium, there’s a “new” world of loungewear, or yogawear, or mindfulness wear, all in drab shades of dirty rose, dull green and faded apricot. Even the promise of a loungesuit with cashmere for €208.95 isn’t tempting. 

Come on, Tchibo - where are those dreams of the moon? Or are you just past it.

We weren’t so bad

 

As yet another year draws to a close, I have to admit that I’ve been having some angsty, existential pangs in a “and what have you done?” sort of mode. Not in a full-on George Bailey-James Stewart manner, but irritating twinges, nonetheless.

What am I still doing in this business, at my age?

Couldn’t I have put my education and talents to better use?

Why am I just a touch ashamed to admit, these days, that my working life has been spent in advertising?

Thirty years ago, in London, every taxi driver knew the name Saatchi & Saatchi. Respondents in group discussions regularly joked about enjoying the ads more than the programmes. Our agency hired Alexandra Palace for the Christmas party - and I nonchalently flew off to LA the next day on three hours’ sleep for client product experience with British Airways.

It’s fashionable to regard advertising as a rather sorry, grubby little business these days. The glamour has passed its sell-by date and attempts are made to elevate it from the snake-oil salesman via association with super-scientific data-driven rigour or a holier-than-thou world-saving loftiness. The rot set in already in the 1990s when Kevin Roberts proclaimed Saatchis to be an “Ideas Company” rather than an advertising agency. 

But now and again, I read an article which warms the cockles of my old ad woman’s heart. And I’ll end my blog posts for this year with this marvellous article by Tom Roach . Although the main theme is the much-hyped imminent death of advertising, the underlying message is that maybe those working in the business could be a touch prouder of what they do. 

How the advertising industry uses the power of human imagination for commercial impact should be something we’re all in awe of.

As a measure of that commercial impact, Tom quotes a Deloitte study which estimates that every $1 spent on ads generates $6 in broader economic impact. Not bad for a grubby little industry - one of the few true proven levers of growth.

The role we play in driving the economy, and therefore society, forward is something we should be proud of. We often highlight advertising’s societal impact when talking about social purpose, but advertising’s economic impact alone should be a sufficient source of pride.

Well, maybe if you put it like that ... I may hang on in here for a while yet!