Four Years Late Linkedin Communicates Data Breach Action Plan

Linkedin recently did a nice job handling their data breach.  They sent the e-mail below to users.  The e-mail clearly communicates the most vital information a consumer would want to know and is done in a manner that's easy to digest.  The only problem is the data breach occurred in 2012 and was widely reported on back then.  While Linkedin didn't realize how broad the breach was, they should have taken these steps four years ago.  The situation highlights the need for brands to take extra precautions when a crisis occurs and go the extra mile at moment zero.


----- Forwarded Message -----
From: LinkedIn Legal
Sent: Wednesday, May 25, 2016 3:00 PM
Subject: Important information about your LinkedIn account

J.Crew Admits It Made Two Critical Mistakes

J.Crew sent an e-mail to its customers this week acknowledging and apologizing (well not really apologizing) for the two big mistakes it has made over the past few seasons:

1. Drifting the fashion style too far away from the brand core
2. Raising price above what the brand value proposition can support.

The email was sent as an informal memo from CEO Mickey Drexler and carries a very casual tone.  Take a read...

The refreshingly simple and conversational style of the e-mail definitely caught my attention.  I believe the messaging does the trick in terms of getting lapsed consumers to at least give J.Crew another look and may even help put J.Crew back in their consideration set the next time they are browsing for new clothes.  Based on a quick trip to J.Crew's website, the styles do feel more aligned with the brand equity than the past few seasons.  That said, the ticket price still feels more premium in many categories than I'd expect many customers to pay full price for.  Sure J.Crew may have invested in the quality, but observing that requires consumers to take a trip to the store and feel the product for themselves.  Given how reliant J.Crew has been on promotions over the past few season, one has to also wonder if they have trained their consumers wait for sales and not pay full price.

The Paper and Packaging Board Creates A TV Advertisement, And It's Great!

The Paper and Packaging Board is an association I never expected to see an advertisement from, let alone get me to stop and notice it.  However, that's exactly what its "Letters to dad" advertisement recently did around the campaign theme of "how life unfold".  The advertisement was created back in 2015, although I only saw it for the first time this past weekend.  Take a look...

There is no doubt that the advertisement grabs your attention and pulls at your heart string, in this way its a great commercial. One could argue that despite the advertisement being memorable, it fails to drive strong brand recall.  But in this case the Paper and Packaging Board isn't trying to make a branding play or even convince anybody to make a specific purchase, but rather remind consumers that there is still an important role for personalize, physical communication in an increasingly digital world.

Coca-Cola "One Brand" Approach Likely To Fail

Facing declining soda category trends in the United States and flat category growth globally, Coca-Cola is launching a new go-to-market strategy aimed at securing its market share and growth prospects.

The heart of this new strategy is unifying Coke, Diet Coke, Coke Zero, and Coca-Cola Life under a "one brand" marketing brand campaign and packaging architecture design. Historically, the company has treated the variants more as individual brands. The new design will be rolled out in Mexico first this May, with other markets adopting the new packaging throughout 2016 and 2017, with the US likely at the tail end of the transformation.

The marketing campaign will be based on the "Taste the Feeling" concept and supported by 10 TV ads, digital, print, out-of-home, and point of sale materials. The objective of this effort is to have all variants of Coca-Cola will be unified under this message and speak together as one voice instead of separate marketing for Coke, Diet Coke, Coke Zero, and Coca-Cola Life.

The packaging design is also aimed at driving a greater sense of brand unity and halo across the business.  All of the Coke variants will now all display the signature Red Disc, although the different variants will still feature a splash of their own unique colors: black for Coke Zero, silver for Coca-Cola Light/Diet Coke and green for Coca-Cola Life.  Marcos de Quinto, Coca-Cola CMO explained this decision by saying "Packaging is our most visible and valuable asset, . . .The Coca-Cola Red Disc has become a signature element of the brand, synonymous with great taste, uplift and refreshment. By applying it to our packaging in such a bold way, we are taking the next step towards full adoption of the 'One Brand' strategy, uniting the Coca-Cola family under one visual identity and making it even easier for consumers to choose their Coca-Cola with or without calories, with or without caffeine."  Although the company admitted it is still working to determine the exact packaging execution of this vision in the US where Diet Coke has a large market share and utilizes "Coke" on its packaging vs. the other variants, which use the more formal "Coca-Cola".

My take on this brand strategy approach is simple - it's a mistake and will likely fail.

The objective of this strategy is to clearly drive greater scale, which from a marketing standpoint traditionally means driving greater efficiency in advertising spending (e.g., getting a bigger bang for your buck because any advertisement should now drive sales across the broader brand portfolio vs. just one Coke variant like the historic marketing was targeted).  Accepting this premise would obviously seem very financially attractive as it would allow Coke to reduce its overall marketing budget because it no longer needs to run four independent advertisements to support the four different variants, it can now look to drive all four behind one advertisement.  However, I would argue that any shorter-term cost savings will be more than offset by longer-term revenue declines because the effectiveness of the 'one brand' advertisement will likely be lower than Coke's historic variant focused approach.  This is the case because to make this strategy work, Coke effectively needs to dilute its messaging to the least common denominator that halos across all four variants.  What made Diet Coke and Coke Zero so powerful is they each spoke to two very different target consumers than original Coke and I worry that one advertising campaign will soften the brand's ability to both target and resonate as deeply with each individual target, instead opting for being a bit of everything for everybody.

From a packaging standpoint, the company is also clearly trying to make a scale play by increasing the visual brand block at shelf with a sea of red.  This in theory should grab more consumer attention in store.  Additionally, for a design purist standpoint, the simplicity of the new brand architecture is far more beautiful than the current disaggregated design.  However, sometimes the uglier solution is the more effective solution from a consumer standpoint.  What consumer has ever complained they cannot find Coke on the shelf?  I have real worries that the new packaging will lead to significant confusion at the shelf and in some cases will lead to the consumer either walking away empty handed or with the wrong item.  Simply put the packaging is just too similar across variants to allow the consumer to quickly find their variant of choice - especially in a category dominated by a grab and go mentality.  Additionally, from an on-pack communication standpoint, the variant name is in the wrong location on the can and bottle.  It should be below the brand name where consumers eyes are trained to expect it, as opposed to up top.  The location on the top of the label is likely to be missed by many consumers based on the fact that the packaging pulls their eye directly to the brand logo and consumers are trained to read down, and not glance back up.  Finally, I'd argue consumers have a strong affinity for the can color of their personal favorite variant.  In many ways, what can color can you prefer has come to express something about your personality to yourself and others in our society - not necessarily good or bad - but something about who you are.  I'm a black can (Coke Zero) guy.  I don't think consumers will ever articulate this, but I expect the black can people and the silver can  (Diet Coke) people to have some hesitations about picking up a new red disc can.  I think they'll miss how their old can helped expression a very small piece of their personality.  In this way, Coke will be a victim of its own historic success.

Canned Beverages Making a Come Back?

One of the trends I'm anticipating over the next few years is the revival of canned beverages.  The twist is that this time we should expect to cans popping up in beverage categories where the packaging form was previously not leveraged on a broad scale. I believe two categories in particular are primed for growth: canned wine and canned water.

The case for canned wine is simple - single serve and convenience.

The case for canned water is also simple - the increasing backlash against plastic bottles.  I'm a big fan of this resealable cap execution that Noah's is currently offering:

Victoria’s Secret Takes One Giant Leap Forward, Followed By Two Steps Back

Victoria’s Secret has made two big announcements recently, the first I believe will set the brand up for long-term success, while the second will likely compress sales until the decision is reversed.

Victoria's Secret's first announcement was to combine the store and direct-sales (online and catalog) businesses into one formal organization and P&L.  This is a move every retailer should make as soon as possible. The move will create a more seamless omnichannel shopping experience. Consumers do not put up artificial walls between a retailer's physical stores, catalog business, website, or mobile/digital vehicles - and neither should retailers if they want to serve them effectively.  Separate organizations and P&L's create misaligned incentives to maximizing a customer's journey across channels and hence risks hurting purchase conversion, compressing basket size, and limiting the ability to drive longer term loyalty and lifetime value.

The second move was to announce the brand was discontinuing its paper catalog.  This I believe is a large mistake.  On the surface, it's easy to understand why the Victoria's Secret management team made the move.  In past years, the company has mailed up to 22 issues per year to over 15 million consumers and fans alike, which in some years likely total to more than 300 million catalogs per year.  Printing and shipping all these catalogs is no doubt quite expensive, even accounting for the brand scaling back the number of total catalogs it sent out in recent years.  In fact, according to recent Citi retail analysts estimates the company could save up to $100 million with this move.  Couple the large cost savings opportunity with the fact that sales coming directly from the catalog have likely fallen significantly over the last several years as consumers shift their spending to online and mobile channels, and its not hard to imagine how the brand completed the math to decide to eliminate the catalog.  Victoria's Secret will look to reinvest much of this savings into its loyalty program and "brand-building engagement".

Still, I believe this move to be a mistake for a few key reasons.  

• First, the catalog is an iconic element of the brand identity.  Yes, the Victoria's Secret fashion show that's televised world-wide is pure genius in terms of generating priceless media impressions, social media commentary, and brand engagement outside the point of transaction, but nothing says Victoria's Secret like it's catalog.  It is a critical element that brand leverages to reach inside of consumers' homes and showcase what the brand stands for.  

• Second, the catalog's ROI or effectiveness can no longer be measured in terms of sales it drives directly.  It's role has shifted to driving awareness and consideration, which ultimately pushes consumers to purchase online or in store.  This creates real challenges with directly measuring ROI and effectiveness, especially if the catalog has not been full optimized from a format and content style to fulfill this new role.  It is also very hard to optimize the catalog for this role or accurately measure ROI or effectiveness, when the store and direct division P&L's are split.  

• Third, digital awareness vehicles, while highly efficient from an ROI standpoint, typically reach a saturation point in terms of effectiveness (e.g., driving revenue). So I have a hard time believing redeploying the savings to digital vehicles will drive the same amount of sales either online or in stores.  

For these reasons, I believe that brand sales will suffer, at least to some degree, with the elimination of the catalog.  That said, I'm all for scaling back the catalog to some degree (both in terms of frequency of the mailings as well as the number of pages in each issue) to save costs and redeploying some of this money to digital vehicles.  I'd also potentially recommend revising the style and content to ensure it fills its new role of driving brand equity and traffic to the stores and digital channels vs. direct sales. 

Toyota Prius "The Longest Chase" Best Super Bowl Advertisement of 2016

Toyota wins my award for best Super Bowl commercial of 2016 for its Toyota Prius "The Longest Chase" advertisement.

The award is based on the premise that strong advertisements grab your attention, communicate a clear benefit, link to the brand equity, and have strong brand recall.  Many Super Bowl ads are entertaining and grab your attention, but few do all four of these things and hence don't move the needle in terms of driving brand perception and ultimately revenue.  Indeed, many brands fall into the trap of pushing too far on the entertainment aspect and fall short on the benefit, brand equity, or recall aspects.

While the plot of the Toyota Prius advertisement is sure to stir a little controversy (e.g., potential references to OJ Simpson), the commercial was both entertaining and effective.  In short, the ad did exactly what it needed to do for the brand - re-frame it as a car that is anything but boring in a way that was compelling, on equity, and memorable.

Take a look if you missed it:

Chipotle's Store Closure A Marketing Stunt

In the aftermath of Chipotle's E. coli and norovirus outbreaks, Chipotle said sales at stores open at least a year dropped 30% in December.

As a response, Chipotle Mexican Grill recently announced several moves to“to reassure our customers that this can’t happen again”, including:

• DNA-based testing on many ingredients to ensure quality and safety

• Making changes to improve food safely by moving the chopping of tomatoes/lettuce and shredding of cheese to a central location, blanching onion/avocados/limes to remove any potential germs before they're chopped, and updating meat marinating protocols

• New food safety training protocols

• Closing its ~1,900 restaurants for a few hours on February 8 to host an all company meeting via video conference with its ~60,000 employees nationwide to talk about food safety changes, thank its employees for their hard work during the crisis, and restore employee morale. Stores are expected to reopen at 3 p.m. local time that day, meaning the chain will sacrifice sales during lunch. "We're going to let all of our folks know about how this happened, and, in detail, all the steps that we're taking to ensure that it won't happen again . . . It's going to be a great rally" explained Chipotle founder and co-CEO Steve Ells.

• Paid sick leave for employee to help reduce spread of germs

• Launching a multifaceted marketing and PR campaign that includes direct mail and traditional advertising in early February after it expects the CDC to wrap up its multi-state investigation into the food-borne outbreak, with the goal “to tell our story about what happened,” according 
  to Mark Crumpacker, chief creative and development officer 

• Offering a $50 discount and a limited-edition gift from the maker of Tabasco on the first 1,500 catering or "Burritos by the Box" orders for 20 or more people for Feb. 7

• Rolling out a store-by-store grass roots marketing effort that empowers each store manager to create his/her own local reactivation campaign by doubling the amount of free food each store is authorized to give-away

With these moves, the company has finally decided to move from defense to offense in their response. But what took so long? Why hasn't the company moved quicker to own the conversation?

So far, the store closures have made the biggest headlines. But the jury is still out whether this is a smart strategic decision or not.

A restaurant chain temporarily closing its doors is not unprecedented. In 2008, after returning as the CEO, Howard Schulz famously closed all Starbucks to improve the consumer experience at the beginning of his effort to reignite sales growth.

But for Chipotle, this peace offering again seems like its too little, too late. If they were going to do this, shouldn't this have occurred weeks ago?  February 8th is still relatively far away, and several more weeks removed from the actual outbreaks. So in effect, the company is prolonging the news cycle.  

And, besides, is it even the right strategy and message for what the brand needs at this stage? The vast majority of consumers aren't reading the company's press releases or watching the news, so the store closures are likely to lead to some element of confusion and re-raise awareness of the outbreaks.  Was "my" store impacted by the outbreak?  Are they closing the store to clean it?  

From a symbolic standpoint, closing its doors to consumers may alos actually be sending the wrong symbolic message. In fact, the very act of shutting the doors, physically blocks the consumer out and reduces transparency verses inviting consumers back in to give the brand another shot. The notion of transparency in a crisis is critical, even more important when your brand's foundation is built on transparency as is Chipotle's. To this end, the store closures feel like the wrong action for this event and more of a PR stunt to grab headlines.  

I'd argue the brand's response should have been based on four pillars: responsibility, transparency, even higher standards, and community.

1) The brand, as it did, should quickly come out to take responsibility for the outbreak and ensure the risk of future outbreaks will be minimized. The brand needed to quickly present a clear action plan. Part of quickly taking responsibility means transitioning from defense to offense by owning the conversation and minimizing the spreading of any false information. To achieve this, in addition to actively pushing out information, the brand needs to be present in the places consumers are going to find information. To this end, I would have recommended activating a search engine campaign (both SEO and SEM) on a variety of potential terms consumers are likely to search (e.g., Chipotle outbreak, Chipotle food safety, etc.) to learn more to help funnel them to your website vs. third party websites.

2) The brand needs to maintain full transparency with its consumers. The company still has not broadly announced the cause of the outbreak incidents. This feels like a major mistake. Could it be that the either still do not know the cause or it's multiple products lack of transparency flies in the face of the company's stated values. Lack of knowledge escalates the fear. As opposed to consumer just avoiding the salsa or lettuce, they avoid everything. I was disappointed to notice that is was very difficult to find any information of the outbreaks or the action plan on Chipotle's direct website. As best as I could tell you either had to type in specific terms into Chipotle's search tool or run a google search to to find https://www.chipotle.com/update. I'd also argue the company meeting on February 8th should be open to the press and broadcast over the internet for consumers to view as well in an effort to continue promoting transparency.

3) Chipotle's brand is all about holding fast food to a higher standard in terms of food quality, and in many ways their response as outlined above does just this. Most of these measure far exceed industry standards and Chipotle should rally the cry for other restaurants to match them. The action item of offering employees sick leave is enormous and I do not believe the company has done a good enough job of promoting to ensure it receives more media attention. This should resonate very broadly not only as a food safety measure, but also as a workers rights/benefit.  By pivoting the media discussion to groundbreaking steps like these, Chipotle has the opportunity to regain its pedestal as a champion for fair and humane business practices. 

4) Finally, and most importantly, the brand needs to get people eating their food again, even if its free food. The best way to do this is through community engagement. This means not just open the doors to its community, but also actively going out and engaging in new ways with them. It's easy for consumers to distrust a national brand, but much harder a restaurant that's ingrained into their community. So investing in supporting local schools, holding community gatherings, offering free giveaways, or bring a friend in campaigns. The $50 off catering orders for the Superbowl is a good start, but why limit it to 1,500 customers? Eating the food at group gatherings reduces the stigma and judgement of coming back to the brand.

Apple iPhone 7 Headphones - When Simple Isn't So Simple

Reports recently surfaced that when Apple releases its new iPhone 7 later this year it will no longer include an industry standard 3.5 mm headphone jack. 

Instead, rumor has it, the phone manufacturer will design a new set of headphones that fit into the lightning cable port, which is the port that iPhones have historically used for power and data transfer. Consumers will also be able to use wireless headphones.

Apple will likely argue that this move allows the company to simplify the phone design and make the phone thinner. The notion of minimalism is at the heart of Apple's design principles - so this move is consistent with the brand's equity. From its products to its stores, Apple's simple design is as much about making the products beautiful as it is about making the usage experience as simple and easy as possible for the consumer.

However, in this case, Apple's quest for simple isn't so simple.

That's because the news, while seemingly minor, has unleashed a wave of consumer frustration with nearly 250,000 consumers signing a petition in a matter of a few days protesting the potential move. 

Many of these consumers are outraged that their existing headphones would be obsolete and they'd have to spend money to replace them. In this case, the simplest solution for consumers is continuing to allow them to use whatever headphones they want.  Other consumers, along with environmentalists, are also concerned about the environmental impact of the electronic waste from the disposal of obsolete headphones.

Simply put, while this move is inevitable in the long-term.  Apple may have to rethink the short-term impact of this design move or at consider including a free adapter.