Mills on Marketing

When you discover a compelling difference that sets you apart from your competitors leverage it for all you are worth.

Commerce Bank, from New Jersey, offers its customers extended opening hours - which typically run from 7:30am to 8pm, 7 days a week. These operating hours mean Commerce Bank is open for more hours than any other bank.

To drive its difference home, the branches follow the ten-minute rule. Branches open 10 minutes early in the morning and stat open ten minutes later than the official closing time. Can you remember the times when you ran towards your bank to see the staff close the doors at 4:59pm?

The 10 minutes dramatizes Commerce Bank’s key differentiator by adding an additional burst of creative magic.

Popularity: 100% [?]

Hot fashion retailer Zara has one plaudits for the way it taps into fashion trends and converts them into hot clothes that are affordable - amazingly fast.

A Zara design can go from concept to store within 30 days. Zara employs over 200 staff in its Spanish design and development team. The team churns out an amazing 1000 styles a month.

The mantra in Zara is react rather than predict. Zara’s designers don’t attempt to predict or share the market like most of their competitors. Zara reacts to what they in the night clubs, on the streets and on the catwalks and tests them in their shops. What sells is replaced quickly. The sale dogs are cut.

Its a magic formula. Customers love it. They get the latest fashions, fast and cheap.

Zara’s short lead times means it continues to deliver more fashionable clothes. Thats why customers return to the store - on average an amazing 17 times a year (most competitors average 3). The lower quantities mean the fashion items are often in short supply. Low surplus stock means Zara doesn’t have to regularly purge its stock with massive end of season sales - so margins remain high.

The huge range of styles gives the customer more choice and improves the odds of Zara getting it right. Because Zara customers know Zara is always updating its stock, Zara spends very little on advertising. Zara’s hot fashion creates massive word-of-mouth among it’s target customer base.

When Ortago Gaona, the founder of Inditex, the owners of Zara, is asked what Zara does, he replies “Zara provides freshly baked clothes.” For the staff this translates into: react rather than predict.

The Zara formula also suggests that before long we will find that a lot more fashion brands will have to own and run their own retail outlets. Zara’s “fast fashion” is built on getting daily feedback from its own stores and using it’s sales associates and store managers as “trendspotters.”

Popularity: 37% [?]

Traditionally brands have used advertising to excite demand. The problem is, it is very difficult to communicate your cutting edge features and end-user benefits in a magazine ad or even a 30 second t.v. spot.

More and more brands - especially those who have supreme confidence in their products superiority are allowing customers to try before they buy.

Take Bose, the world leaders in speaker technology. Bose now offers to send its new wave music system to customers and let them try it out for 30 days at no cost. If they truly don’t like the product they can return it to Bose at no cost. Bose now runs Try and Buy retail kiosks in airports - where flyers can trial Bose’s noise canceling headphones.

Tryvertising obviously has its costs, but as brand experts Keith Lincoln and Lars Thomassen point out in their book, How to Succeed at Retail (Kogan Page, 2007):

“Marketers operating a tryvertising mindset will find completely new ‘conversation channels’, if not the most unexpected partners and alliances.”

Popularity: 15% [?]

I’ve had lots of fun recently visiting ZARA fashion stores in Barcelona and Paris.

Customers flock to their stores, literally grabbing the latest fashions which seemingly come into their stores in a never-ending stream.

Zara is not just cool for its modestly priced, affordable clothes. What makes Zara really cool is its ultra-competitive business model which allows it to design and deliver product to its stores within 15 days.

Competitors typically take 9 months.

Zara’s designers start by attending the fashion shows looking for cool designs. They then produce small batches of imitation cool product which is shipped to stores to test for demand.

Product runs for popular lines then are scaled up. Zara avoids the big mistakes its competitors regularly make. Plus it doesn’t have to spend much on advertising because its customers are always coming back looking for the latest cool wear.

Compare that to competitors, where you wait around for the end of season sales.

No wonder Zara is so cool. Or should I say hot?

If you haven’t already, make sure you check out my other blog, The Naked Negotiator - The Secrets of Big Deals, Big Sales and Big Pitches - laid bare.

Popularity: 19% [?]

Every industry I work with is relentlessly under attack from commoditizers.

When Bronco Wine Company, now the fourth largest wine producer in the U.S. produced an under $2 bottle of wine, industry insiders treated the offering with contempt.

The quality had to be CRAP, and I don’t mean CReative Accounting Practice.

Critics and fans have named the product “Two-Buck Chuck.” So imagine the surprise, at the 2004 Eastern Wine Competition, Bronco’s 202 Shiraz won the coveted double gold medal from a field of 2,300 entries.

It will be interesting to watch the reaction to the high-end $3.99 Merlots and Chardonnays, nick-named “Four-Buck Fred.”

You may hate the Two-Buck Chucks of this world, but unless you come with a superior value proposition that sets you apart your business is history.

Popularity: 17% [?]

Who would have thought that Mattel’s Barbie would ever fall from her throne. Since its launch in 1959, Barbie has sold over 1 billion dolls.

Then along came the Bratz doll line. Launched in 2001 by MGA Entertainment, the Bratz targeted precocious older girls who had grown tired of Barbie.

The Bratz look like street-savvy teenagers younger girls like to copy. Bratz has become the top lifestyle brand for girls aged 7 to 14.

Popularity: 6% [?]