On Point: Here today, gone tomorrow

Could your brand end up on the auction block?

By Tom Weir

As 2010 was drawing to a close, a group of people gathered in a Manhattan hotel to bid at auction for brand names most of us recognize but have not thought about in some time. Among some 170 brands on the block were Meister Brau, Lucky Whip, Mum, Phar-Mor, Saturday Review and Victrola, all once mainstream names in America.

Only a couple dozen sold and a number of those went for bargain-basement prices—in some cases two for $1,000—considering they all had some degree of name recognition attached. Try creating a new brand and see how much consumer awareness $500 will buy you. Part of the reason for the low prices was that the rights to some brands came with use-it-or-lose-it time limits. But it is a wakeup call to think that the rights to Allied Signal, a corporate name from our nation’s mighty industrial past, could be had almost as cheaply as a low-end personal computer.

Whether these brands’ new owners will revive them and make them resonate with a new generation of shoppers is anybody’s guess. The food and beverage brands that were being offered might find supermarkets a challenge. Do you have an extra slot for Meister Brau beer, Snow Crop orange juice or All­sweet margarine?

The future of castoff brands makes for interesting speculation. However, their past should be much more important to any retailer trying to maintain its own banner near the top of shoppers’ minds. There’s probably a case study in the failure of each of the 170 names that were up for bids, but it’s a pretty safe bet that many could have been saved if their stewards had kept a closer eye on the world around them and adapted to it.

It has often been written that America’s once-powerful railway companies failed because they thought they were in the business of running railroads when they should have recognized that they were really in the transportation business. No enterprise or brand can survive long-term if its leaders do not anticipate change and get out in front of it. Given the continuing decline in supermarkets’ share of grocery sales, there is likely to be more weeding out in our industry and it is increasingly apparent that some well-known national and regional names may not have much of a future.

If you are sure your banner is not among them now, are you just as positive it will not end up on the list later? Amazon.com seems intent on selling groceries to every household in the country. Walgreens’ latest ambition appears to be stocking more fresh and packaged groceries in its typical drugstore than you can find in a 7-Eleven. Target is rapidly expanding its efforts to sell food and with the Walmart example as a painful reminder, grocers have to take that very seriously. These are only three of the retailers on a long list of threats.

Every loaf of bread or jug of milk that is sold through an alternative channel weakens grocery and each individual supermarket has a breaking point at which the sales it manages to retain won’t justify keeping the doors open. Tried and true practices will not save anybody. The supermarkets that survive and prosper won’t be the ones that know the most about groceries; they will be the ones that know the most about consumers and the ever-changing world they inhabit.

Tom Weir can be reached at tom@taweir.cnc.net.

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