The last few decades have seen many brands fade away, only to have a number of them make a comeback in recent years.
Many people used to believe that brands follow a predictable life cycle, growing, maturing, declining, and dying, but this is no longer the case. Some brands fade away as a result of shifting consumer needs, technological redundancy, competition, the economy, or just simply poor judgment from executive management. But in the last few years, a number of brands that were thought to be dead have had a resurgence and are now being given a new life in a new opportunity space.
There have never been so many brands up for sale.
The idea of rolling viable brands into larger portfolios has been commonplace for decades. Just look at the businesses of fast moving consumer goods such as Procter & Gamble, Kraft, Unilever and others to appreciate the continued economic and global reach of such strategies. These global consumer product brands have become masters of brand management, gobbling up businesses and expanding their multi-billion-dollar brand empires. This strategy is based on careful valuation of the viability of a brand now and in the future, on a global scale and across cultures.
At the other end of the scale, private equity firms and liquidation specialists are also seeking products that have a strategic fit with their growing brand portfolios, looking to pick up once-relevant brands. This can be a good strategy because it allows a smaller company to launch a product with existing brand equity, which can be polished and strengthened following acquisition.
But what is driving this? Perhaps it’s simply because there have never been so many brands up for sale. The recent recession resulted in millions of Americans struggling financially, negatively affecting the retail landscape and consumer product manufacturers alike. The resulting fire sales created an opportunity for liquidators who have bundled together a myriad of once well-known brands into portfolios that include a diverse range of products, such as household products, consumer electronics, and technology.
How much do consumers really care or know about brand authenticity?
Companies such as Hilco Consumer Capital are betting that brands such as Polaroid, the Sharper Image, and Halston will once again resonate with consumers. Similarly Imation, a 3M spin-off, is betting on the re-launch of ’80s consumer media brands Memorex and TDK.
Creating brand equity from scratch is an extremely expensive undertaking, so the opportunity to re-frame a brand that still has emotional relevance with consumers seems, on the face of it, to be a very good bet. In fact, in a strange irony, the same low-cost manufacturing economies that contributed to the demise of many well-known brands is now the key source for these same brands’ revival. These countries with low-cost manufacturing can provide access to low-cost technologies, products, and manufacturing expertise, which is then used to physically embody these “new old” brands, quickly and cost-effectively, something that was simply not possible a decade ago.
Ultimately, I like to think that authenticity will play the key role in determining long-term viability. However, with the seemingly endless re-introduction of old brands, it makes me wonder how much consumers really care or know about brand authenticity. Modern consumers are very fickle and more informed than ever, so it would seem that only the brands that feel authentic and that are able to make a real connection with consumers will succeed, yet consumers seem to be eating up the re-introduction of old brands, with little concern about choosing genuine authenticity over a manufactured authenticity. We will have to wait to see how these new old brands are doing in a few years before we can judge how consumers have responded to these old favorites.
[Image above: Lady Gaga showing off a Polaroid she recent gave to the MIT Museum as part of her promotional deal with the company, by Greg Johnson]