Good morning, my memory lane guru and tour guide.
One of my favorite posts remains your 2017 introduction to the "Life Cycle of Preppy Companies." ("Many peddle aspirational vulgarity." Brilliant.)
I was wondering if you plan a 'ten years on' update - I think it would be well received!
All the best from this New Englander in his Mid-Atlantic exile,
So, with the goal of filling in an updated chart:
From your experiences, focused on clothing and accessory companies that fall roughly in the Preppy/Ivy/Sloane lane, and for Men and Women, which companies would you include on the chart today, and in which category?
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| Chart Designed by Salt Water New England |
The broad characteristics of each stage are as follows (and all characteristics won't apply to all companies):
Crucible
Crucible
- A company serves demanding clients in authentic environments significantly better then competitors.
- The company’s founder is hands on.
- Products rapidly evolve, with dozens of failed prototypes. The company typically does one thing very well.
- Marketing is not done.
- Other people often love the products without necessarily recognizing the company that made it.
- As any VC knows, companies here are highly unstable; they can change nearly instantly, from experiencing overnight rapid growth, to selling out, pivoting, or going away.
- Not all start-ups begin in the crucible stage.
Precious
- Fiercely passionate customers, who are "in the know," are very loyal to the company.
- The company has much higher prices than competitors, which fans are happy to pay. Prices are fair and constant, and when a new variation on an older product is 20% more expensive, for example, the product will be worth 20% more.
Precious companies have much higher prices than competitors, which fans are happy to pay. Marketing is poor, and not a priority. Web sites may be disastrous.
- Quality is paramount.
- Customers can still call or email and get the owner (and often work through any problems).
- New, great products are added, seemingly effortlessly. The company has an aesthetic certainty, neither derivative nor capricious.
- The company has widely recognized popular and unique items.
- Great pride is taken in the company by employees, who go "beyond the call of duty" to make happy customers.
- Items are expensive, but high quality.
- New items, extensions of old, are added.
- Companies gain increasing brand recognition well beyond passionate base.
Iconic companies worry about becoming trendy and stylish, something that cash grab companies are desperate to be.
- The company worries about becoming trendy and stylish. They also fear complacency, bloat, and smugness, and don't want to be thought of as the category leader. They sell great products, not a great brand.
- A short term flattening of growth can cause panic.
- The company is often under new management, typically with MBA and logistics-centric credentials. The company increases focuses on greatly improving contribution margins, often in association with new investment money.
- The new management begins to purge many of the old employees and suppliers/branded vendors that had contributed to the success of the company.
- Companies feel entitled to their traditional customers and markets. Companies in this stage are very interested in new categories of customers, and take the existing customer base for granted; many loyal customers find themselves buying less and less.
- The new management experiments with "leveraging the look and the feel of the brand and brand experience" by tentatively lowering the quality and increasing the channels, supported by ramped up marketing, including social media. Cheaper parts are swapped in wherever possible.
- Marketing gets increasingly - often awkwardly - self-congratulatory.
- The company makes big deals of changing the colors of successful products.
- Vendors open ancillary stores, for example, in this stage, which do not yet influence design decision making.
- No new great products are launched, despite expensive misfires. Companies go after markets they don't understand. From a marketing and design perspective, the company becomes derivative, dated, and piecemeal.
- There is a nearly impossible to resist opportunity for upper management to personally cash-in with a one-time windfall through a rapid market expansion with much lower quality goods at still high prices with very high margins, irrevocably sacrificing brand, long-term employees and partners, and traditional customers. In other words, transforming nothing into a great company is somewhat profitable. Transforming a great company into nothing is highly profitable.
- Companies believe success comes when they can best distract from, rather than highlight, what they are actually selling. Many peddle aspirational vulgarity.
- There is significant confusion from traditional customers. Long time customers start to experience return-fatigue.
- Some classics remain (but fewer and fewer).
- There are wild fluctuations of prices (higher prices, then massive sales, with various coupons and sweepstakes).
- New products are low quality and relatively expensive. Companies design for 75% to 80% mark ups.
- Ancillary stores grow in influence over the direction of the company. Outlet stores open. Companies here may invest in "big data" programs. The culture embraces short cuts to short term success.
- Companies increasingly outsource production to low-cost providers.
- Companies are desperate to be stylish and trendy.
- A cash grab company further increase their PR budget, first spent trying to differentiate the company from their past and pushing new, very-high-margin products, then relentlessly trying to invoke their heritage when the new products flop. The term "iconic" is used. A lot. Companies become louder and more strident.
Company Shell
- The company's new owners think they can market their way out of their dropping sales.
- Companies' products are no longer significantly differentiated in the marketplace. Branding chugs along. Companies here find themselves with new competitors and engage in a race-to-the-bottom in quality to shore up crumbling margins.
- They shift, almost overnight from an external market perception, from relevant and interesting to irrelevant, tired, and over-exposed.
- Outlet stores and other bottom feeding strategies become highly influential in setting company strategies.
- Company shells use old black and white photographs that have no connection to the current organization.
- They rely on good customer service to overcome quality problems, not to meet individual needs or repair but to efficiently replace or refund. Guarantees become more restrictive. Finally, customer service, typically the last point of pride and holdover from the once strong company, fades to squeeze out a few more dollars of profit.
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