Branded Matters

Why the Demand for Company Stores and Branded Apparel Programs Will Grow

Twitter is moving more and more mainstream everyday. Like Facebook, user profiles now transcend mere early adopters to the point that the average consumer is beginning to sign up and use the service with relative ease and comfort.

What does this have to do with branded stores?

Everything.

The comfort factor for purchasing and interacting online has grown exponentially. The concerns for security still exist but they no longer exist as a barrier to entry for many consumers; we'll happily purchase online through brands we know, trust, and love. Amazon's tremendous growth from merely an online bookseller to "purveyor of virtually anything" provides a simple testament to the fact that many consumers are far more comfortable purchasing online for a far wider variety of items than is traditionally thought (see this New York Times article, "Can Amazon Be the Wal-Mart of the Web?"). This could mean that custom items online, even branded items, might be coming into a time of their own online (finally), though not without many (many!) pioneers face down in the mud with arrows in their back.

The point is: that end-user, the person who orders the branded shirt, hat or mug is far more comfortable purchasing online than even a year ago and is not only comfortable with it but actually expects dynamic technologies that deliver from the brands they interact with. That means that if you are an employer with an employee store or a non-profit with a store that provides branded items to your donors, the demand for these goods will continue to grow because the audience they are intended for is purchasing online to a greater extent than ever before. In fact, according to Internet Retailer, a recent study conducted by Forrester Research, Inc. revealed that "42% of online retailers increased their online visitor-to-order conversion rates during the first half of this year compared to the same period last year."

Add the continued growth in handheld technologies to the increasing availability of Wi-Fi plus home computing that replaces television sets for mainstream media/entertainment and you'll have a formerly timid consumer that's confident to interact and purchase with your brand and do so much easier than ever before. The bleeding edge of technology might not be as far (these days) from the mainstream as most might think.

Company stores: outsource or in-house?

Occasionally, I'll correspond with prospects (clients, even) on the subject of whether to outsource their company store or manage it in-house (I received a similar comment regarding this today). One thing I've learned about company stores is, despite their similarities, no two are alike: each have an eCommerce platform (purchase order options, credit card, points, gift certificates, approval processes, etc.) and each require some element of warehousing, distribution, procurement, and creative marketing but they are vastly different based on products, usage, and purchasers.

The most common trait they share is one of priority: each store is designed to create, make available and distribute branded products (print, apparel, advertising specialties) to a select audience as efficiently as possible. Getting branded products from concept to delivery is the most important criteria by which each store should be evaluated.

John Jantsch of Duct Tape Marketing recently wrote a simple but powerful blogpost directed toward marketers: The Five Things People Really Buy. John exhorts marketing professionals to make sure they communicate to prospects how their products and solutions are going to:

1. Make them more money
2. Save them more time
3. Allow them to avoid the frustration of doing stuff they don't like (like wasting time and money)
4. Help them save or not lose money today and in the future
5. Help them feel better about themselves
   

The bold emphasis is mine (not John's) but these highlight the common responses clients have repeated to us once we have successfully launched and managed a store for them. Creating a company store to manage branded materials saves time, helps outsource the things they don't like doing (or don't want to do) and helps them save or not lose money by bringing their branded products into a controlled environment.

When trying to decide whether or not to outsource your company store, the most important criteria by which each store should be evaluated, getting branded products from concept to delivery as efficiently as possible, should remain central in your consideration. Even if you can create, manage, make available, and distribute more efficiently than an outsourced vendor, you should still cautiously consider it. Becoming a fulfillment center requires warehousing, inventory, call center help and more, and some companies are doing it; most, however, prefer the alternative. Why?

When a CEO asked me why they shouldn't just manage their store in-house, I replied with a question, "Aren't you in the business of selling ______? Isn't selling ____ your #1 priority?" To elaborate, perhaps one should ask a few more questions:

1. Would diverting the time, energy and resources of your staff away from your most critical priority be worth it?
2. Does your current brand management system support your #1 priority? If so, is it worth the disruption to test your theory?
3. If you have no existing system for managing branded materials, do you create from scratch what already exists and if so, to what purpose?

Deciding to outsource or manage in-house is not merely a question of available resources, it is one of prioritization. Heed your #1 priority or opportunity costs are certain to abound. Instead of, "can we do it?", or "how do we do it?", the critical question to ask is, "should we do it?"

Replacing the on-site company store

Several years ago, an on-site company store was a common site at factories and headquarters that housed more than 1,000 employees. Today, the on-site company store featuring branded apparel and promotional products is virtually non-existent. What has replaced the on-site company store is seasonal "shows" that feature items that can now be ordered through the virtual company store online. This approach:

• saves time and money
• still gives associates a chance to touch and feel merchandise 
• creates an atmosphere of buzz and excitement about new products
• promotes merchandise that is slow-moving

Some companies host these around spring and fall, some implement an on-site show to coincide with an annual event, in any case, they are an excellent opportunity to show both associates and upper management that promotional products generate goodwill and are a tremendous asset for the brand. We've done many of these types of shows and, though they are a tremendous amount of work, they pale in comparison to the cost of a physical on-site store plus they provide an excellent opportunity to feature the store and remind everyone of it's benefits.

The Mozilla Store

I'm fired up about FireFox 3. I wasn't a big user until this latest release. I love it when technology blends speed + simplicty + sophistication in a single app. Making it my default browser gave me the excuse I needed to comment about a much lesser known Mozilla product: the Mozilla Store.

As a frequent reviewer of many corporate stores (swag stores, promo stores, branded products: whatever you want to call them), I found that the Mozilla store equals their powerful browser's traits: the site is simple to use and, like the LinkedIn Store, it is fun! I love how they incorporated the official FireFox 3 t-shirt into a contest. The store's design is very consistent throughout. Coolest of all, both at checkout and on the front page, you can subscribe to a newsletter that promotes new items (or probably helps move discontinued branded merchandise - all the stores we create have a marketing competent like this built in - most stores fail because they do not promote their merchandise). Following are a couple of take-aways from the Mozilla store that you can use to build a smart store for your branded products:

1. If you build it, they will come - once. Maybe twice. It takes consistent marketing (usually in the form of newsletters or flyers or both) to keep a store healthy
   
2. Remain consistent, even with the little things (like fonts) throughout the site
   
3. Make navigational buttons and purchasing options big but keep descriptive commentary small, this causes the eyes to drift to the most important aspects of the screen: the purchasing buttons
   
4. Mozilla pulled it off better than most I've seen, but if you can, do not photograph your branded products flat, always either place them on a person (employees, fans, etc.) or a mannequin
   

Congrats to the Mozilla crew for a creating a smart reflection of a brilliant browser.

5 Benefits to Having a Branded Products Company Store

With all my detailed discussion throughout the Company Store Series about inventory management, store creation and marketing your branded products through a company store, I never wrote a single post simplifying the key reasons to creating a company store for your branded products. Following are the top five reasons why companies create a company store to help manage their promotional products, printed materials and corporate apparel:

controlled branding: brand abuse is/was out of control; no system of protection for the brand

simplifying corporate apparel: apparel selection and ordering is messy - requires to much administration

central location, ease-of-use: no organized system for your branded products

controlled purchasing: product purchasing is fragmented, no purchasing leverage for the organization

minimize administration: too much energy duplicated across multiple locations to create similar branded products

Whenever I ask a client of ours why they chose to create a company store for their brand, almost always the response is the same: marketing professionals are spending too much time procuring and organizing material for their brand when their creative capital is best spent on mission critical objectives, i.e., selling, communications, market development, etc.

I can reduce this down to three simple words: speed, power and control ...

The LinkedIn Web Store

As someone who has reviewed a lot of company stores, I've always loved the simple, creative edge to the LinkedIn store and I had actually planned to highlight it at some point. Now I have an excuse as the LinkedIn store adds new gear and new pics with (very smart!) links to the LinkedIn profiles of their models. The store was created by Paul Navabpour with Jack Nadel. (Hey, I don't mind discussing the competition and their work, it's rare to stumble across a store site that has been done exceptionally well!) Kay Luo discusses the new store here. You can buy your LinkedIn gear here.

What would be really cool, particularly for a social media giant like LinkedIn, is to incorporate some sort of Reactee gear, (the shirts that text back). Better yet, with everyone getting into full iPhone/G3 mode where internet accessibility is now convenient, even something as simple as a custom shirt for LinkedIn users that features their LinkedIn public profile address would be enough to spark more connections on LinkedIn. I may not be so vain as to wear my own public profile often (okay, maybe I might) but I definitely would wear my company's profile, the profile of a charity I support or a group I belong to. Printing one-off's on t-shirts is now possible and those of us in the promo industry have always known that to personalize a product for someone greatly increases the branding factor (i.e., I will be more inclined to wear it or use it more if it bears my name, too).

If you are thinking of creating a company store or a gear store for your brand, a couple of key take-aways from the LinkedIn store will help:

1. Start small: begin with 6-12 items and then get feedback from your audience with plans to increase your store in the future
   
2. Take the photography of your product, seriously (even in a fun way). I've seen too many stores with shoddy pics of their product. Your internal audience (i.e., employees, colleagues) are accustomed to quality images. Don't sacrifice your brand's image, even on an internal store site.
   
3. Personalize your store. This takes time, but make your store reflect your brand. A great number of stores are created in haste without much consideration for how it reflects your image. Plus, if you can incorporate models from your company, do.
   
4. The cardinal rule: in the end, the functionality of your store is more important than aesthetics. Build both: a creative store and also a store that works. The final analysis of any store is how it performs. How a store looks brings first time users; how a store performs brings users back again (and again). Did your store users receive their merchandise as quickly as humanly possible? That should be the ultimate goal. (This post was not intended to be a self-promotion, but it fits well here: if you want more info on how to create an effective store, you can download my Company Store Planning Guide here).
   

Congrats to the LinkedIn crew, Nadel and photographer Dave Getzschman for a sharp store.

Update, July 17th: Dave informed me that Kay Luo was the genius behind the concept of the LinkedIn store.

Company Store: Toward Solving the Inventory Dilemma (Part II)

Customer owned inventory is what it implies: you own the inventory and have allowed the vendor to manage it for you. It, too, can have risk, but risk that can be avoided if set up with the right accountability parameters. When you own the inventory, it is clearly a matter of control. The vendor should present marketing suggestions and product ideas but you ultimately hold the trump card for any decisions made regarding your inventory. "Carrying" the inventory yourself allows 100% control over how the inventory is used and purchased. It is the ultimate option for those who wish to keep a strong hold on any decision making related to their branded products.

As we did with vendor-financed inventory, following are a series of questions that you should ask yourself if you prefer to use this method of inventory management:

How will the inventory and subsequent reporting be handled?

Will I have real-time access for accountability to what's going on in our store?

What sort of inventory management process does the vendor use?

How will purchasing and reimbursement be handled (if any)?

Will the vendor absorb any existing inventory we currently have? If so, what would be the cost?

What type of reporting will you process? Will it be monthly? Quarterly?

Do you have a history of working with inventory so you can advise on reasonable inventory amounts?

As with most stores, what ultimately should become the barometer for success is not how a store is initially set-up, but ultimately, how a store performs. Does the end-user (your colleagues, employees, franchises) receive the correct merchandise in a timely manner? This is the ultimate question. Issues like eCommerce and inventory management are critical, but when you boil a successful program down to its most essential ingredient, the ability to deliver the correct product in a timely manner is of utmost importance. I've written about my conversation with Gary Kelly, CEO of Southwest Airlines before (here). I mentioned in that article the subtle secret of logistics operations, which is: when you are operating at your very best, no one really recognizes it, everything is as it should be, on time and error free. The "recognition" of course, comes from customers who become clients with repeat business (the best kind of attention one could desire).

Making a store decision on anything less than final delivery of goods ensures failure, if not the least, constant turn-over with vendors (which equals frustration for everyone). Though inventory financing is an important issue, it is not the most important issue when it comes to a healthy process to deliver branded materials to your audience.

For our next installment, we'll look at one of the most significant Company Store trends growing today, a solution that will help alleviate your need for inventory: the virtual company store solution (known also as "just-in-time" inventory or "on-demand").

The material in this post has been lifted and modified from my Company Store Planning Guide, located here.

Company Stores: Toward Solving the Inventory Dilemma (Part I)

Company stores exist to provide immediate access to controlled, branded materials and to parcel these materials out quickly for use to the field. Your company store should include a healthy mixture of both inventoried products and non-inventoried products.

Regarding inventoried products, the main question that I am generally asked first is: Who owns the inventory? Will the vendor finance the inventory? Will we purchase the inventory and have the vendor manage it? “No obligation for inventory purchases” sounds like minimal risk, but beware, both areas are fraught with challenges if not approached with eyes wide open.

Vendor financed inventory has a nice ring: it sounds risk-free. Obviously, a no up-front inventory obligation is nice; it would be all the nicer if there weren't balloon payments or buy-back agreements attached. There is no such think as a "risk-free" company store. There is a calculated element of risk to both types. Following are a few questions to ask yourself and your vendor when it comes to vendor-financed inventory:

What agreement terms should we be aware of if we are sold a “no-risk” store?

Do we have to sign an exclusive purchasing agreement in exchange for vendor-financed inventory?

When a product runs out of stock or is close to running out, who makes the purchasing decision?

What if we dislike the product selection? Who "owns" this part of the process?

What if we see an item that we want in the store but the vendor is reluctant to finance it?

Is the vendor we are working with financially sound enough to finance our inventory?

What if the services we are rendered are not sufficient? What steps would we need to take to claim back our store?

Should we sign over control for our branded product selection to a vendor or should this be a shared responsibility?

Who bears the responsibility for marketing the store? What if this service is performed poorly by our estimation?

What if the vendor discontinues their service to us? Will the inventory be sold back?

Will there be regular reporting or accountability features built in on who gets permission to use the inventory?

The biggest challenge is not one of a financial commitment, but of a repetitive failure: There are few issues involving stores that create more frustration than to partner with someone who promises no-risk and yet commits very few resources to making your store a success. Why wouldn’t a vendor do everything in their power to make your store successful? Because their capital is tied up in what seems like the greatest service they can offer: financing your inventory. This is why vendor-financed inventory stores are rare and why they have a higher failure rate. The puzzling part about vendor-financed inventory is that you, the client, take great pains to ensure brand control yet, because of a perception of no-risk, you abandon controls by allowing someone else to own your branded assets. The most frustrating experience in starting a company store is having to start over. More often than not, vendor selection can be hastily made on a couple of hot-button issues, inventory-financing being one of them. Don’t sacrifice the service your colleagues will demand for short term gain or you could be rebuilding your store within a matter of months. Vendor-owned inventory stores must be approached with caution, just as client-owned inventory, but with client owned inventory you call all the shots and you make the rules.

For the next installment, we will discuss the other option: financing the inventory yourself. Of the two options, it is the most common and we'll discover why.

The material in this post has been taken (and modified) from my Company Store Planning Guide, located here.

Corporate Apparel: How to Start a Smart Program (Part II)

Creating a branded apparel program for your brand might surprise you. The project can spin wildly out of control. If you're not careful you'll be juggling so many styles and sizing options, not to mention inordinate amounts of inventory, that you've successfully pushed yourself into the retail apparel business when it was suppose to be a much more simple solution than that.

The initial objective was to make readily available a healthy selection of corporate apparel to accommodate a wide audience within a structured framework. In other words, some cool apparel that boasts your brand, controlled through the company store. One of the immediate challenges to building a successful apparel program for your company is a good problem to have: too many options. Five-to-ten years ago the options were surprisingly few. Most apparel companies were just beginning to provide ladies style branded apparel along with mens. That was yesterday's dilemma; it has now been, thankfully, resolved. Today's challenge is one of selection, a very large, wide network of apparel companies to choose from can clutter your company store with too many options to tame, providing all things to all people but with an everexpanding budget and (truth be know) unhappy audience.

If you'll allow a short diversion for a moment, I'll prove to you why such a simple program like branded apparel can be so complex and (more importantly) what to do to simplify it. Chris Anderson's book The Long Tail was a landmark publication. It defined a phenomenon that was happening in virtually any industry involved in eCommerce and even those that weren't. One of the questions posed was "what happens when everything in the world becomes available to everyone?" (e.g. the music industry and the rise of obscure artists through the advent of iTunes). The internet opened up options that didn't exist in the local store. Today, the era of the boutique brand is skyrocketing because the average consumer can get their hands on their favorite products via the web, instantly. This also means consumers can often be found possessing more information about their favorite products than the retail brands who sell it! (The book, Citizen Marketers, touches on this very subject).

What does this has to do with corporate apparel?

Everything. We are all consumers (no shock, there). This means we bring consumer expectations and consumer knowledge to our companies we work for. Which, when we come to our company's store, we are armed with expectations about what kind of product it should feature. Add to this dilemma the incredibly diverse tastes of your audience and you'll quickly see that you might not able to please everyone. You can try (many have tried), but the question goes back to how to simplify the program and, most importantly, how to build an apparel program that reflects, not merely individual tastes of the recipient, but the cohesive, consistent image your marketing message should convey.

First, start with the question "what is our brand" rather than "what does everyone want". It sounds unfriendly, anti-service to say so, but starting with your brand's image will help everyone define what these walking billboards do: branded products have an intrinsic value to your business, the reflect your brand. As such, they should represent your company's image, not only each person's selective taste. You can, and should, appeal to your audience's preference, (more on that in a moment). This doesn't mean everyone has to wear starched white shirts. It does mean, however, you must balance the reflection of your brand with the needs of your audience. Your company's brand/image should come every-so-slightly before personal taste. The good news is, often, you can find a happy medium. This is not an either/or proposition, because of the wide selection of product, you can find enough garments to not only reflect your brand but give enough options for personal preference.

Next, (I mentioned this in a previous post), you can start with a simple survey (use Zoomerang or Constant Contact) to poll your audience and get a general feel for what your colleages prefer. Employ your apparel provider in this - they are the consultants. Experts in the industry can make light work of your project. Provide images of different styles. Ask you audience what they prefer. Gather the data across your entire network. You might discover your vision of what they needed clashes with their day-to-day wear.

Finally: know your company. If you have an org chart, directory or any document or database that lists your company by division or department, review it and ask yourself 'what kind of apparel do these colleagues wear now?'. Casual? Professional? Starched white shirts? Fire retardant clothing? T-shirts? This will help prevent a glaring oversight as your build your options in the program ('No one told me we had a warehouse in Tulsa?').

Combining these three ideas: the proper reflection of your brand with the preference of your colleagues plus the demand for what people need to wear will help you bring back into control a program that could easily be dominated by strong opinions or driven completely by a select department's taste. Most of all, this helps democratize the process and makes the selection a genuine response to the needs for branded apparel without relying solely on your own personal preference. Striking a balance is the key: utilizing survey tools and considering your brand's image will help narrow down (literally) thousands of brand options and styles to a selection your audience would prefer.

After all, we're not only talking about making this a program easy for you to tame, ultimately, we want to be able to impress the final audience (your colleagues) with a fine selection of apparel that minimizes their time spent on selection and maximizes your brands exposure. When your colleagues go to your company store, wouldn't a nice response be something like this: "Perfect. How did they know?".

Keys to the Company Store - Key #5: Proper Metrics

It is critical in any fulfillment or company store endeavor to create proper metrics. (No yawning, please!) Branded merchandise, or any inventoried product, should be well-managed from creation all the way through to distribution and not having a proper metric could lead to some serious misunderstanding about your store!

This Operations and Fulfillment article, (Measure for Measure), discusses the importance of creating proper measurement tools for your fulfillment program. Whether you are contracting with a company to create and distribute your branded merchandise or whether you are doing it yourself, it is critical you layer in appropriate metrics in order to get feedback about your program's performance.

For us (ROBYN), metrics are not merely gauges, they are tools to help tune and refine our programs to ensure everything is running as smooth as humanly possible. In our world, two of the most important metrics we use for measurement are speed and accuracy. We measure how fast our orders go out the door for every program and, with the help of customer feedback, measure our percentage of error by order (not by line-item, which, if you read the Ops & Fulfillment piece, you'll see why). When it comes to fulfilling branded product, whether it is printed materials, promotional products or apparel, metrics become critical for analyzing the overall health of the program. The metrics help prevent knee-jerk reactions while allowing you to stop recurring errors and as important, helps you address recorded issues related to a program with facts, not feeling. Emotions are not a healthy metric for a program because on any given week, it can feel like "every order" is having problems (which in actuality, it might be an exceptional week). Performance metrics help answer that question, "how is the program going?" with evidence to support your response, sales alone will never be a sufficient metric.

Our CFO often reminds me that a 1/2% error rate is exceptional unless you're the one who received the only wrong orders ... their opinion is that your error rate is 100%! This perspective helps us set reasonable benchmarks while understanding that, though perfection may be impossible, it is certainly worth striving for.

If you are creating a new company store or branded merchandise program for your business or organization, be sure you ask your vendors for an example of the types of metrics they employ for each of their clients. The technology and capabilities can be so impressive you could forget this most basic question: how soon will we receive our merchandise and will it be right when it gets there?!

This "Proper Metrics" post is one in a series of random thoughts on how to unlock your stores best potential. For this and other keys to building effective Company Stores for your branded merchandise, visit The Company Store Series on this blog or our company's website: www.robynpromo.com