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Eye on Retail: Protect the Brand

BY Larry Light

Early this year, The Limited shut down its 250 clothing stores and not long after that the women’s apparel chain announced it was filing for bankruptcy protection.

Just like that, a brand that had been a mainstay of shopping malls across America disappeared from the retail front.

What happened to force the company’s hand? Several factors came into play, including an inability to compete with “fast fashion” stores that rush the latest fashions into consumers’ hands, as well as the chain’s sale several years ago to a private equity firm that cut costs but couldn’t find a buyer. However, analysts also suggested that, like many retailers, The Limited failed to keep up with dramatic changes in shopping habits and quick-changing fashion sensibilities, making it less relevant to its target consumers.

While it’s not unusual for brands to head down the path to irrelevancy, it’s also not inevitable.

A brand can innovate itself out of a death spiral. Just as an example, IBM may have lost its relevance in computers and laptops, but it saved itself by focusing on servers, information, and cloud computing.

Some people insist that all brands eventually will go through a natural life cycle from birth to death, but he disagrees with that view.

“It’s possible for brands to live forever, but they have to be properly managed,” said Larry Light, co-author with Joan Kiddon of Six Rules for Brand Revitalization. “Too often brands get into trouble due to the self-inflicted actions of their owners.”

There are probably a dozen identifiable ways businesses can make a mess of their brands. Here are four:

1) The loss of relevance. Staying relevant means always staying aware of changes to the landscape, the customers, the competitive brands, and your brand. Understanding what your audience needs and how they obtain their products and services is the way to remain relevant.

2) The lack of a coherent plan to win. Having a coherent strategy that aligns employees and outside partners accomplishes a lot on the way to positive performance. But the plan needs the clear, consistent, visual, and verbal support of leadership. It also must contain the vision for the brand and the plan to achieve this vision. It’s a top-down strategy. Without a clear and vibrant plan to win, a brand is directionless.

3) The lack of a balanced brand-business scorecard. A brand-business scorecard allows leaders to view the critical indicators necessary to create growth that is both profitable and enduring, rather than one or the other. Light says such a scorecard reinforces the importance of producing a proper balance between both business and brand results. Using measurable milestones – such as sales, profits, price and promotion – it evaluates whether the brand leadership is doing the right things in the right way.

4) The disregard for the changing world. Technology changes, demographics change and so do plenty of other factors that can affect a brand. “Although it’s impossible to predict the future,” Light says, “it is absolutely necessary for business leaders to keep their eyes, ears, mind, and heart open to what may be possible and to what is actually happening around them.

Some brands that experience trouble are very successful in pulling out of the downward spiral. But the best way to not have to revitalize a brand is to avoid becoming a troubled brand in the first place.

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Larry Light is a global brand revitalization expert and the CEO of the business-consulting firm Arcature

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Market Recap: RISI Crow’s Construction Materials Cost Index

BY HBSDEALER Staff

A price index of lumber and panels used in actual construction for August 11, 2017.

Western – regional species perimeter foundation; Southern – regional species slab construction.

Crow's Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow's Weekly Market Report.

Lumber: A lack of sales forced prices lower in the SPF market. Producers in both East and West Canada discounted to varying degrees, although some producers approached the market less urgently, still holding onto order files extending into the latter days of the month. Production exceeded sales activity in Southern Pine, generating discounts across a broader range of items. The amount of excesses at mills did not warrant an abundance of deep discounting, instead, most price cuts were around $5 with a smattering of $10 declines. Buyers of Coastal species sensed a “plateauing of prices,” and approached the market with a little more apprehension. Still, concerns over log supplies, especially at Southern Oregon mills, remained in play, providing some additional resilience for prices. Inland lumber producers reported generally quieter activity, but prices that remained strong or stronger. This was particularly the case in Fir-Larch, which reflected gains in both #2&Btr lumber and uppers. Stud pricing was mostly flat to lower, with much of the more moderate weakness taking place in SPF. Spotty yet deeper discounting appeared in the US West. Sensing a degree of weakness, buyers held off purchases whenever possible. Radiata Pine reflects some difficulty in moving Mldg&Btr, according to sources. Most pine users have flipped to Ponderosa Pine because of the price gap that has continued for some time between the two species. Ponderosa Pine Selects and Commons show no changes in Selects, which remain reasonably balanced. Idaho White Pine was stable in both Sterling and Standard grades, but Utility reflected the same low-grade strength as other species. Western Red Cedar sales out of mills were sluggish, which likely led to the many opinions offered regarding future pricing. Buyers purchased hand-to-mouth when necessary, resolute about trying to force prices lower, especially in a few weeks when the duty-free gap begins.

Panels: After repeated price surges, OSB markets this week had a mixed look. Some regions showed cracks, others were flat, while some picked up strength. Buyers are leery of price levels and bought only needs. Sales activity at Southern Pine plywood mills was stuck between “decent” and “lackluster.” Most producers managed to garner sales into the week of August 21, but discounts were used in a number of instances to extend lead times. Availability also remained in August 14. Buyers continued to fear downside risk in Western Fir plywood prices and purchased accordingly, prompting assessments suggesting the market is underbought. This presented a market where order files moved more solidly into the week of August 21 as the week progressed, but discounts on carload volumes were sometimes used to establish those lead times. Canadian plywood markets are in a groove, currently, with mill-level activity a bit slower and prices stable. Yards are busy, but anyone buying is being cautious not to take a position. Wildfires in BC are of grave concern, and the province’s entire forest products industry faces questions about raw wood supply. As has been the case for much of the summer, particleboard and MDF markets lacked any considerable changes. Demand for particleboard and MDF continued at a “steady pace.”

For more on RISI, click here.

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LBM dealers take the lead in retail sales

BY HBSDealer Staff

Total U.S. retail sales slid backwards in June, but that didn't prevent LBM dealers from pulling ahead of the pack.

Building material and garden equipment & supplies dealers managed to eke out a 0.5% increase in retail sales in June — the largest increase among all of the retail categories.

Total adjusted sales reached $30.8 billion for the category, which represents a 5.1% increase over last year.

In total, advance estimates of U.S. retail and food services sales for June 2017 were down 0.2% to $473.5 billion, which is 2.8% above June 2016.

Nonstore retailers experienced the most growth over the last year, up 9.2% from June 2016.

Meanwhile, Sporting Goods, Hobby, Book, & Music Stores were down 8.9% year-over-year.

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