Every week or so, Brand Musings takes a look at the intersection of the worlds and brands and culture to provide some perspective on the week’s news.
Empathy Understanding
Empathy is a hot topic these days; books, papers, magazine articles, seminars, forums, and conferences have all covered it. It is a critical skill that can make us better people, managers, and if you also happen to work in the world of advertising, better creatives and strategists.
David Foster Wallace was one of the finest writers and thinkers Ameria has produced in recent times and sadly took his life. Still, he left us with something that drives right at the heart of empathy and explains it so and clearly that you almost need nothing else.
In 2005, aged 43 he beat out Hillary Clinton and John Glenn to give the commencement speech at Kenyon College. It has been described by Time as one of the best commencement speeches ever given.
Here is an excerpt…The point here is that I think this is one part of what teaching me how to think is really supposed to mean. To be just a little less arrogant. To have just a little critical awareness about myself and my certainties. Because a huge percentage of the stuff that I tend to be automatically certain of is, it turns out, totally wrong and deluded. I have learned this the hard way, as I predict you graduates will, too. Here is just one example of the total wrongness of something I tend to be automatically sure of: everything in my own immediate experience supports my deep belief that I am the absolute centre of the universe; the realest, most vivid and important person in existence. We rarely think about this sort of natural, basic self-centredness because it’s so socially repulsive. But it’s pretty much the same for all of us. It is our default setting, hard-wired into our boards at birth. Think about it: there is no experience you have had that you are not the absolute centre of. The world as you experience it is there in front of YOU or behind YOU, to the left or right of YOU, on YOUR TV or YOUR monitor. And so on. Other people’s thoughts and feelings have to be communicated to you somehow, but your own are so immediate, urgent, real.
2, Casper and the sleeping ghost of the profitability
Casper did well to take on the moribund mattress category and instill it with a new life and purpose. Following the now-familiar formula of ripping apart a category and uncovering its pain-points, the founders of the company concluded that instead of a sleep number- people just needed ONE darn good mattress and the convenience of having it delivered to their home in a cardboard box. Casper became a radical alternative to the soul-destroying and pocket-burning experience of buying one from the mattress store.
On top of these designed elements, they or rather the folks at Red Antler- layered a quirky and exciting little brand that made incumbents like the Mattress Firm look positively ancient.
Now Casper has reached the point where they seemingly have to go public with the predictable $1billon valuation and the founders and bankers wanting to cash out.
Ever IPO these days is being put under the We Work microscope. While Casper lacks the quasi-fraudulent scheming of Adam Neumann, it is undoubtedly receiving its fair share of criticism.
The biggest challenge is profitability- which is not there- the last published financial accounts revealed losses of around $90m. Scott Galloway summed up the company’s issues in his imitable style- “The economics work better if Casper sent you a mattress for free, stuffed with $300.”
Then there is the pre-requisite big story piece, which in Casper’s case is all about owning or being the Nike of Sleep. Something that sounds good on the initial hearing, but you then wonder what exactly that is and, more importantly, how are they going to own that space.
Casper, in many ways, is the poster-child for the latest generation of DTC brands. Like many others shows that they are just brands and businesses like other brands have been for centuries, Nothing about them makes them immune to commercial pressures, and one could even argue- especially given that Casper faces 175 competitors- that in the DTC space- makes it incredibly easy to clone and copy ideas. One competitor- Purple has found a way to sell more expensive mattresses than Casper and has turned a profit.
On top of all that, one of the most alluring parts of the DTC model was how they could eliminate the costs of physical retail and advertising. Now Casper has 60 retail stores and wants to grow that to 200 because they have found them to be very successful at driving business in their markets. With advertising - Casper is not just sending out emails but spending significant sums on television ads.
You may have thought you have a brand and a business- but if it is not genuinely distinctive enough or profitable, its longevity has to be in question.
Growth hacking, closeness to your customer, a brand magazine and stores, access to data, and a brilliant email newsletter does not make you immune to any of the usual pressures of business.
Despite the earlier promises of pundits and analysts- DTC brands are not all that different from regular brands and businesses.
Last week I was fortunate to attend a morning conference organized by PSFK on the Future of Retail.
At the event, two of the most compelling talks came from companies with very similar businesses, but slightly different approaches; b8ta and Neighborhood Goods.
b8ta is helping brands who want to build-out their own retail spaces and brands and also provide a showcase for tech, fashion, health, and wellness offerings. With some of this, I am thinking of a more relevant Sharper Image.
They also have a concept called Forum- which is about helping get smaller, often sustainable fashion brands presence and exposure.
b8ta is also part of the team responsible for bringing the formerly iconic Toys R’Us back to life. These stores will offer a fundamentally new experience with theaters for movies and video games, treehouses where kids can play, and a way for toy brands to properly showcase their products using technology and trained staff.
Neighborhood Good (bills itself as a new type of Department Store)is all about the store as a brand showcase and has been testing this concept out in a store in Plano, Texas. The company likes to cultivate an experience with food options and events and believes that data is its secret sauce- for example, telling an expensive sneaker retailer that its core shoppers also like to shop for baby clothes.
The company has recently opened a location in Chelsea, New York.
These models depend on brands who see value in these retail channels- either because they have unique technology and store employees are skilled enough to showcase products uniquely, and bring qualified buyers through the door. They are media players and have to deliver value- the scale is essential, but if the stores lose their edge and end up like all other retail- these businesses could wither and die. Maintaining differences, keeping the stores consistently entertaining, and enhancing the value add for brands will be essential to ensure these new retailers thrive.
For 50 years, the world’s elite has been attending the World Economic Forum in Davos, and in recent years it has not gone unnoticed that the world’s most potent are gathering at a time when inequality has never been greater.
The organizer is now wise to this, and this year, the theme seems to dwell heavily on the core issues surrounding Purpose- and specifically call out Climate Change and Social Inequality as crucial issues.
Leading lights like Larry Fink of BlackRock, who recently announced his firm’s expectation that Climate Change has to be a vital consideration of the companies BlackRock invests in. Swedish teen activist- Greta Thunberg, will be eagerly awaited talks at the event along with Microsoft CEO Satya Nadella, who is likely to be talking about his company’s plans to erase its carbon footprint and invest $1 billion in carbon removal technology.
Davos means well, and it is not an institution that is going to hold corporations' feet to the fire to ensure action. It sees itself as a place to raise and discuss ideas- today, it released a Social Inequality Report- which paints a particularly bad picture for the US and China, and the while the WEF makes recommendations for changes- it has no power to enforce actions. The WEF makes money from charging corporations to attend and flout their wares - it certainly doesn’t want to piss off these paying clients.
Many see the notion of Davos as an exercise in hypocrisy with senior execs talking climate change while flying to the event by private jet. A point raised by Rutger Bregman at last year’s event.
Other news
This Spring in NY - Sigrid Jacob and I will be organizing a Photography Bootcamp for Strategists. The idea is to spend a full day learning about and exploring through practical exercises, the intersections of the two disciplines. The camera becomes a conduit to help you see the world and people differently, and in so doing, change your perspective about the world of human insight and strategy. For more information, please contact me at edcotton1@gmail.com or Sigrid at sigridjakob@gmail.com
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Megan and Harry to pitch their brand and brands
Concerns over shrinking demand for gas is forcing the oil companies to make more plastic
Americans trust Amazon and Google more than the police and government