Makers, Curators, and Sneakers

Etsy versus the rest of the field, such as GoImagine. Nike versus everyone. Hear what Mark and Lorraine think about Etsy's new campaign focused on human makers, GoImagine's up-and-coming challenge to Etsy, and Nike's apparent fall from grace. Is it too late for Nike to Just Do It!?! And can Etsy stay on top with challengers such as GoImagine?

Spend 30ish with Mark and Lorraine as they talk all things marketing, advertising, and of course ... positioning!

Transcript

Mark Vandegrift
Welcome to the Brand Shorthand Podcast. I'm your host, Mark Vandegrift, and with me today is the matron of merchandising, Lorraine Kessler. Lorraine, we're in August. Can you believe it's here already?

Lorraine Kessler
No, I cannot believe it's… I'm not even ready to give up on summer, right, until September. But funny that you termed me the matron of merchandising, setting aside matron per minute, which makes me feel terribly old. A little more than a month ago, actually, before July 4th, I went to the store At Home, a Dallas based retailer store that we have here. And they already were showing Halloween stuff. It's like manic merchandising has just completely overtaken. I mean, you know, we got Christmas in July. I don't know who thought of that idea? But these are merchandising schemes and they apparently they're effective because I guess there are some people who are, you know, thinking Halloween already.

I'm still thinking of pontoon rides and jet skis and beautiful summer nights. But anyway, and it also made me think I should just open one store called Four Seasons, you know, like the restaurant and just have everything for every season possible in one store so you can shop all year round. Stop the insanity.

Mark Vandegrift
I think that would work. If you think about it, there's a lot of Christmas shops. So wouldn't take much more to center it around Christmas, but add all the other ones as like individual areas. It blows my mind, when you get to December 15th anymore, they're already putting Christmas stuff on, you know, half or 75% off.

Lorraine Kessler
it's yeah. And forget about Thanksgiving. It's almost impossible to find anything for Thanksgiving. It's like that comes in. Yeah.

Mark Vandegrift
Yeah, no, they go from Halloween to Christmas, because I think pilgrims kind of is no longer in fashion. Or riding to grandmothers through the woods.

Lorraine Kessler
Yeah, it's like, it's giving just totally gets it gets now and subsumed into fall. It’s called fall. Yeah, we're one store and make it big. I mean, you know, make it really, really big. And then you have every one of your corners covered.

Mark Vandegrift
Yeah? That'd be cool. Well, the line I hear all the time is, as soon as you see the Christmas lights, know Thanksgiving's right around the corner.

Lorraine Kessler
Oh my gosh.

Mark Vandegrift
Speaking of holidays or celebrations, I have some exciting news for you. Today is our 50th episode. Can you believe it?

Lorraine Kessler
I do not believe it. That's... That is bonkers crazy.

Mark Vandegrift
We made it to 50. Now I have to tell you when I call you these things like matron of merchandising, know that matron, that title comes along with queen and how old was Queen Elizabeth when she came to the throne? She was a matron, so I'm not dating you by using this.

Lorraine Kessler
Well, she was young.

Mark Vandegrift
She was a matron in her 20s. So there you go. You can be a matron in your, merchandising in your 20s. Yeah, I think it's one, two, three, one, two, three.

Are you scared that I know that? Yeah. Well, I found a LinkedIn article that says that of the three million podcasts, and this was as of June last year, so 2023, of the three million podcasts available, only 156,000 make it past 10 episodes. So that's only 5.2%.

I can't find a stat on how many make it to 50, but an old article said it was 11%, but that would have been more than the 5.2 % current stats. So I'm going to go with our current, well, 2023 stat. Obviously, it would be less than 5 % since many haven't even hit the 50 mark yet. And there are probably many others that give up in the, maybe the tens and the 20s. So congratulations officially, Lorraine. We have made it into the top 5% of all podcasters, at least based on quantity. Now quality, that's another question.

Lorraine Kessler
Hopefully we have more than 50 viewers and listeners and subscribers. But it's good we hit it in Innis Maggiore’s 50th year, right? Yeah. So it's kind of a nice, what do call that? It's not a coincidence. It's, I don't know, I don't know what to call it, but that's kind of, that's,

Mark Vandegrift
A mile. yeah, it is kind of a coincidence or destiny, we'll call it Or as since Back to the Future's back in style now, call it density. “You are my density.” I always love that line from there.

Lorraine Kessler
Pretty doggone good. You know, when you think about it, it is pretty astounding because in our market, in the Cleveland market, well, there are very few agencies that have lasted 50 years, very few, nationally, right? They either went out of business completely or got subsumed by other larger global brands.

But in just the Cleveland market, there were like outstanding agencies when I started, Liggett Stashour, Wise, know, Smucker's famous for their campaign, gone. There was one you probably don't remember called Jamie, really great business to business, gone. They came and went. yeah, Wolf Group, yeah, another one, yeah.

Mark Vandegrift
yeah. What about Wolf Group? They're gone too, aren't they? Yeah. Yeah. And then you have the ones that have been acquired by others, so you don't hear of them anymore. Who was it our PR crew worked for? Jim and Jack. Sherman, yeah. They were purchased, Yeah. Marcus Thomas.

Lorraine Kessler
that was out of Young's town. Sherman? Yeah. Yeah. I don't really know what happened to Sherman. Yeah, Marcus, Thomas. So they're still around. Maybe, I don't know. I know Malone, of course, became part of J. Wilber Thompson and then Geometry Global and whatever, but.

Mark Vandegrift
Pretty sure. Yep. So they're still around, but I didn't they buy Sherman?

Well, they became a lot of things.

Yeah, then they became a bunch of initials and now they're VMR or VML or something like that. Yeah. So they're meaningless initials as well. But yeah. 

Lorraine Kessler
Yeah, that's really smart for an agency to do.

Mark Vandegrift
Okay, Matron of Merchandising, let's get to our topic today. We've reminisced a little bit much. I'm sure we've put everyone to sleep already. I think our topic is one with which we can have a lot of fun. This is thanks again to our loyal listener and our positioning pal, Doug, who sent us an article about Etsy and their marketing. 

It was an article in Adweek and it shares how it goes opposite of a lot of the technology companies, especially if you saw Apple's recent commercial that really got trampled on, where everything was about getting rid of the human aspect of creativity and compressing it and out pops a thin iPad. Their campaign focuses on technology, but it's human centric. So given our recent ponderings on big brands going opposite of the leader, so Pepsi new to Coke's old, what strikes you as interesting about this move by Etsy and their most recent campaign?

Lorraine Kessler
Well, you know, Etsy uses technology to promote handmade or finely curated or finely designed elements, artifacts, everything from fashion to tools to furniture, to real art. That's human made, right? Human curated, human designed. I think it's brilliant, but it's going to sound braggadocio, but 40 years ago, to my then boss in the agency I worked in in Toledo, I remember saying to him, the more things become technology and mass produced, and we optimize our productivity as a nation where labor hours, you need less to make stuff because you're using automation and all sorts of other technological things, I think it's going to create huge demand for handcrafted, right, artifacts or handcrafted things that have a thumb, like a pot that has a thumbprint on it, that we're going to go back to go forward and we'll see a renaissance in kind of real paintings and real things. 

So to the degree that I think that that's what Etsy’s about. And I think that they've tapped into that kind of being the counter to everything else being somehow mass produced, even paintings, are now mass produced, right? And people are doing them with computers and technology.

But there's still going to be, I think, a need for an appreciation for that human element. So, and it goes back to something we've talked about so many times, Mark, and that is that people are additive, not subtractive. So it doesn't mean I'm going to stop using my iPad or my iPhone or stop making photos that I can photo touch and make into beautiful things, but it does mean that I may add more real made things or more craft made things by human hands to my collection of things. And so I really think that's going to work. And I think their theme is “keep commerce human” is intelligent and it is what they do. So it just really plays on a tried and true refrain that we have said.

What is the alternative to mass custom? What's the alternative to standardization and inefficiency? I know you love that word. It's the human touch, okay? What trumps kind of impersonal created things? You don't know who made them and where they came from. Well, something that's patently emotional and I know the artist is signed or it's you know, has some sort of signature So as long as there's technology that's going one way it can't be all things, I think there's going to be room for Etsy and the ability to keep commerce human.

Mark Vandegrift
I think it's a refreshing campaign. And you know, we've talked about AI recently and there's all this techno talk about AI taking over the world. Like the article says, it's not that the campaign is anti-tech, but frankly what's sold on Etsy are many products that just can't be replicated by AI. Now maybe one day, but that day is not today. And one thing I thought was cool, and to me makes the platform even that much more attractive to customers like me, is the article read that they're going to add made, designed, sourced, and there's one other one. handpicked by the seller. So made, designed, sourced, and handpicked by the seller. I think “made” is the one that is going to interest me the most because, you can design and source it, design's okay, handpicked. Those sound like I could handpick them from China. But I think made is the most powerful and that should really catapult the creative makers on the platform. I don't know if you know this, Etsy has a competitor called goimagine.com. And they insist that the people on that platform have to make their goods.

What they're trying to separate from is Etsy's getting a little bit more with the made in China products that are coming over and people claiming that they're making stuff. Well, they're just altering it in ever so slight ways and then they say it's made by them. Goimagine.com is kind of going to an extreme of that which is only made stuff.

We know a gal, and this is where I learned about GoImagine, who does a huge amount of business on Etsy, and she repurposes the jeans, like old jeans, into rugs and purses and things like that. And who'd thunk that that would have an audience, but she does big business and she's on both GoImagine and Etsy. So, you know, this whole move around what they're doing, do you think this isa pretty strategically strong move.

Lorraine Kessler
Yeah, I think it's real strong. But I do think there is a threat to what you said is that there needs to be some integrity in terms of the made aspect of it on Etsy. And if they're getting too broad and too loose with that, I think that's going to hurt them. The experience of Etsy, which I purchased a lot through, is that you can talk directly to the seller. So whether they're the maker or... And all the other three things you said, design...

There's made to me, design and curated. I think those are the three categories, because if you sourced it, curated is a better word, right? And I would focus on that versus sourcing, because someone who curates may have a particular style, like Magnolia, right? They have a particular style. Apothic has a particular style in the fashion world or design world. And so what you're doing is you're buying that style and someone has curated that for you so you don't have to go to a thousand different places to put it together yourself. I think Etsy is going to have to stay pretty… rein in the rules on that to really make this stay where it is and not let it devolve.

Mark Vandegrift
Yeah, and they're on top now, right? And if they want to stay on top, they're going to have to kind of thwart the threats of, I would imagine, other platforms like GoImagine. And so they certainly can't become stale. And thinking of stale, if you want, let's shift to another brand now. So we've kind of exhausted Etsy here.

It's that challenge of staying on top. And you sent me an article about Nike and their recent stock. I wouldn't even call it a drop. It was a collapse, 40% in one day. Set us up on that discussion. What's going on with Nike?

Lorraine Kessler
Well, first, like it's not just 40% one day, but it's 20% at the end of the June quarter, quarter ending June, which was a four year low. And this is… so it's been persistent, right? And then one of the analysts who evaluates Nike and advises investors said, and this guy's name is Jay Sole, which I think is kind of funny, like the soul of your shoe, S -O -L -E. I thought that was kind of funny. 

He quoted in a Forbes article that there will be no quick rebound for Nike earnings as then he proceeded to downgrade Nike from buy to neutral. So that's like a yowza. So, you asked like what's going on, I'd say first and foremost it's a combination lack of fascination, which is deadly to any brand, and often comes with ubiquity and additional competition. 

So, you know that I believe familiarity is critical. It's like the goal to achieve critical mass if you're a new brand, for a newly differentiated brand. I could have the best differentiated brand in the world, but if no one knows about it, so what?

So really getting that known for that is, and Nike of course has done that. But the reverse side of that coin is ubiquity. When you become ubiquitous, meaning over familiarity, everybody feels they know you. It breeds boredom. And we are just like so Pavlovian. We are neophilic, right?

Neophilic means that we are always wanting new things. We always want new and different, you know, that's why brands would put “new and improved,” right, because they don't want you to think we're still the same old thing. So, boredom is once you lose that fascination, it's to me, it's it's kind of like losing the magical, mercurial ingredient that makes a brand rise quickly.

So, beyond its function or what it does, there's a mercurial, magical element. And when that mystique kind of goes away, you're in trouble. And it's not easy to get that back. So, I think the investor is right.==

Mark Vandegrift
Yeah. There was a sentence in the article that might speak a little bit to the broader market. And I think we probably need to give consideration to that because there's market forces that happen every day. Right. 

So here's the sentence that kind of jumped out at me. “It's broadly been a bad stretch for athletic clothing and sneaker companies. Shares of Lululemon stock down 17% over the last three years, Adidas down 26% and Under Armour down 68%. And for multinational companies with a high proportion of sales in China,” and they said, “see Apple,” another reference to selling lot over there. Is this an indicator that it's more of an industry downturn due to the Chinese economy maybe?

Lorraine Kessler
Well, it certainly is, that's certainly a sobering factor and you can't discount it, but I don't think entirely that's the problem. I think, and I didn't really talk to the second part of my equation, which was competition. I think there's just very, there's a lot more competition. We have Alo, I don't know how you pronounce that, A-L-O, and is it Hoku or, I actually have, Hocus, I think they're called Hocus, those shoes. 

These are just two incumbents that I've seen, but there's many more. There's a brand of sandal and shoe from Hawaii that's super interesting right now and has dominated a lot of the boutique stores that I visited up north where they sell that kind of stuff near water.

So the problem, the thing is what I see is a lot of small niche brands like this that are, have a lot of story around them and a lot of fascination, and they are guerrillas and you have a lot of guerrillas and I'm not saying guerrilla like the big eight, I'm guerrilla as in marketing warfare, positioning strategy, the guerrilla like a hit and run gunman has the advantage of narrowing the playing field, I mean, to their advantage, because they can play, they don't need to boil the ocean to be profitable or successful or please stockholders. And they can either just focus on a particular region or a particular area or a small segment of the market and be wildly successful from a sales and profit standpoint. 

And the larger brands like Nike and Under Armour, who have distribution that's wide, they can't afford to lavish resources on that small of an island, if you will. So, you know a lot of these hit and miss or shoot and hit kind of guys coming out with great stories that are captivating to audiences, and I think that's part of the problem too.

Mark Vandegrift
Yeah. Well, and it's interesting. The next line in that article was, “Nike has also dealt with an apparent decline in interest in its products. Its global search volumes have been down year over year, constantly dating back to last July. And we're down about 10% last month, according to Goldman Sachs research.” You mentioned, we talked about one, two weeks ago, remember Gymshark?

Lorraine Kessler
Yeah, yeah. That's another one.

Mark Vandegrift
There's one of your niche one and there how do you go after that? mean Nike's been known to be in the gym But here you have a specialist attacking right at that with a name That is perfect for that market, you

Lorraine Kessler
Right. And a story and a personality. And here's the other thing, these companies become so big, they lose touch, right? They become institutionalized. So they lose, I don't have a relationship with the founder of Nike, but the guy who started Gymshark, I'm reading stories about him. He's a young guy and he had this idea and he wanted clothes that wicked and that were comfortable. And they have a particular attribute that they focus on that you're going to be more comfortable when work out, you're actually going to have a better workout, well that's engaging. 

So it's hard to be engaged with these mega brands that get so big. So size can be a detriment. We don't talk about that enough. The other thing is you're in a fashion forward, fashion fast business where trends change quickly, more so than in many other categories. It can be lethal because when you're big, just think about how harder it is for a freighter to turn, right, than a cruiser boat or a speedboat. I mean, you can make moves really quickly, but a freighter is like, you know, it's very slow. And a very fast moving market that is kind of beholden or at least lassoed to changing tastes and behaviors very quickly. So that's another thing. 

But what you read about you know, they've lost, was it the lot, people have lost interest in the Nike? That's frightening. And to me, this is a very, I think there was another part of that too, that said something to do with search volumes are down, right? So it's cause and effect is, you fix the search volumes? No, that you go back to the root, interest is down. That's why people aren't searching. It's cause and effect.

So that's the problem you have to fix is how do you get interest back, not just in the category of athletic apparel. I mean, hey, everybody's buying it, but how do you get that interest back for your brand? And you know, another shoe sneaker that we talk about and I think is growing pretty well is Skechers, right? Because the slip on ease, my God, like it is once you have put yourself into that, you're like, why am I…

Mark Vandegrift
I hate to admit it, but I hate tying. I have two pairs of shoes with shoestrings and now I hate tying them.

Lorraine Kessler
It's, and they make them, look like they're tied shoes, right? I mean, really they can keep going with this stuff. It's a high heel without the heel, for women. But it's really, you know, so how does Nike combat that? I mean, that's, they have a very broad line. So I think it's not going to be an easy, I agree with Mr. Soul, S-O-L-E. It's not going to be an easy fix.

Mark Vandegrift
Well, you talked about losing touch. You want to hear something from that article that there's no one I know of that can comprehend this. In one day, Phil Knight, okay, Phil Knight, by the way, is 87 now, I think, and his son helped him run the company. Yeah, the founder. So I would say his son's probably in his 60s, if I had to guess. So he's not a young chicken either. His net worth.

Just guess how much it fell in one day because the shares fell 40%. Take a wild guess.

Lorraine Kessler
You are asking the non -math person a math question. Billions.

Mark Vandegrift
I don't care, take a guess. Yes, $5.5 billion. Can you imagine walking down the street and have $5.5 billion drop out of your pocket and go, oh man, I lost my money. I mean, to me, you talk about losing touch. I'm sure all his NIL spend on the Oregon Ducks players is taking a huge hit.

Lorraine Kessler
Oh my gosh,yeah.

Mark Vandegrift
Most of your college football fans believe that he's kind of supporting the whole NIL effort out there. I mean, what a disconnect if five and a half billion is just lost in one day. And I can't even comprehend having a million dollars, let alone having one billion or 5.5 billion in one day gone.

Lorraine Kessler
Yeah, yeah, yeah, I forgot that. I'm glad you brought that up. Yeah.

You know, that's where some of this is all kind of smoke and mirrors, right? It's all smoke, unless you have it in your hand. That's why my grandfather, the old Italian, had a safe. And he had all his money in the safe. I don't trust the banks, he said.

Mark Vandegrift
Right. Well, he won't lose 5.5 billion that way. So that's good.

Lorraine Kessler
No, no, that's a pretty frightening and you know, it's a long way from blue ribbon shoe company to Nike to losing 5.5 billion.

Mark Vandegrift
Yeah. Well, it just shows it's hard to stay on top. I sit there and think of Etsy and I hadn't heard of a competitor until talking to the gal that has that rug business on Etsy. And she immediately said, I love GoImagine so much better because of the fact that it doesn't charge the high fees and it requires people on there to actually make their own products.

Lorraine Kessler
Yeah, and then all they need to do is make the market more aware of that because that's how you go against that scene, still share from then.

Mark Vandegrift
Well, I know a good ad agency they could hire. you think maybe they would go with us? We gave them a lot of shout out today for not having heard of them before. Now they're getting a mention. We should get a sponsorship from GoImagine.com.

Lorraine Kessler
Well, that would be a good outlet for our past associate who created the company Unbox the Dress. know, Grace Rojek, where she makes all sorts of things out of people's wedding dresses.

Mark Vandegrift
Yeah. Yeah, we've spurred, we've spurred quite a few creators. I mean, you look at James Alay and his crack corn poppy, what's it called now? Puffy pop. Yeah. We bought four of those. Yeah. We bought four of those at a local market here just this past weekend and three of them are almost gone. So they're sitting on my waist though. I know exactly where they are.

Lorraine Kessler
It's called Puffy Pop now, by KrackKorn.

I had friends, I had James get that into a little boutique in Michigan. And so friends, when we went there, I said, try this, we be jamming and we were doing stuff. And when I opened the car, they had already eaten one and I said, we hate you. This is too good. Yeah.

Mark Vandegrift
That's great. Well, Lorraine, we tackled some big brands today, one seemingly doing the right thing and one suffering from perhaps a relevance or product innovation crisis. Any final thoughts before we bring this episode to a close?

Lorraine Kessler
Yeah, the biggest fallacy in marketing is that you're too big to fail. If you're too big, failure is right around the corner. So watch out how big you get.

Mark Vandegrift
Excellent analysis, o matron of merchandising. And that doesn't mean you're old.

Lorraine Kessler
Okay, I have to get the hand.

Mark Vandegrift
Yeah. Thanks for giving us your insights and I hope you have a great week. It's just hard to believe we're in the last full month of summer. It makes me sad, but, thank you for all of those who have joined today and for the new listeners. We just seem to be climbing every week. If you haven't liked, shared, subscribed, or told your friends about the Brand Shorthand podcast, please do. And until next time, have an amazing day.