Is Martha Stewart Overextended at Retail?

0
Discussion
Mar 05, 2012

A recent article in USA Today, "Is Martha Stewart’s brand too confusing?", explored whether Ms. Stewart has overextended her name across retail, particularly as her new line of office supplies for Staples hits the selling floors.

Ms. Stewart’s retail career began when she became a Kmart spokeswoman in 1987. The Martha Stewart Living Everyday line at Kmart didn’t launch until 1997, but blew up with revenues peaking at $1.6 billion in 2002. Ms. Stewart’s relationship with Kmart began to sour after a deal in 2005 was reached with Macy’s for a line of home products. Her contract with Kmart expired in January 2010 amid lawsuits.

While the Martha Stewart brand had been languishing at Kmart, given the discounter’s struggles, the move also allowed Ms. Stewart to diversify the line’s retail distribution and at the same time broaden the product line.

Michael Kupinski, who follows Martha Stewart Living Omnimedia for Noble Financial Group told USA Today, "They decided that they did not want to put all their eggs in one basket like they did with Kmart."

But now some are saying the name is sold at too many stores. Starting with the Martha Stewart Collection for Macy’s in 2007, the brand has expanded to include crafts sold at Michael’s and Jo-Ann Fabric, home improvement goods at Home Depot, pet supplies at PetSmart, and now office supplies at Staples. A deal signed in December to bring Martha Stewart boutiques to J.C. Penney starting in 2013 has led to a lawsuit with Macy’s.

The move to offer office supplies at Staples — including filing cabinets, sticky notes, journals and rubber bands — was seen by some as an example of her moving into too many categories.

Ms. Stewart claims that as a lifestyle company, the name can span a wide range.

"You don’t find me making things that don’t fit into the home," Ms. Stewart told USA Today.

Martha Stewart brand fans point to ongoing success. Martha Stewart Living Omnimedia generated more than a billion dollars in retail sales last year (up from $750,000 in 2010) with 8,500 products in more than 38,000 stores nationwide.

"Sure you have new names like Rachael Ray," Phoenix Partners Group analyst Robert Routh, told Businessweek. "Martha was the first. She is the original, like Betty Crocker, Pierre Cardin, Laura Ashley."

Discussion Questions: How can retailers gauge if the Martha Stewart brand has become overextended? Generally speaking, how can retailers gauge whether a brand is losing its appeal?

Join the Discussion!

17 Comments on "Is Martha Stewart Overextended at Retail?"

Notify of

Sort by:   newest | oldest | most voted
Paula Rosenblum
BrainTrust

Office supplies is a really interesting play. I think JCP and Macy’s together are a bit much (too similar), while for Home Depot it has been an interesting way to extend a subtle invitation to women (which was one of the chain’s problems), whether or not the customers actually buy Martha Stewart’s stuff.

In a space like office supplies, where consumers often don’t know which of the big-three they’ve left, at least a consumer will be able to say “Oh right, the one that sells Martha Stewart stuff.” I think it kind of works.

The only one that’s vaguely bizarre is PetSmart.

So the net question is really “Does traffic rise and do overall sales go up when Martha is in the house?” (Couldn’t resist that one.) If the answer is yes, then the brand isn’t over-extended. Pretty simple really. A halo effect works too.

Dick Seesel
BrainTrust

The Martha Stewart brand may feel that adding JCP distribution is a big win, but I’m not so sure. Angering its biggest account (Macy’s), who has invested a lot of floor space and ad space behind the brand, will backfire. (Macy’s didn’t hesitate to drop Liz Claiborne, and its volume has hardly suffered for it.) JCP also has a right to be concerned about what happens to the Martha brand cachet over the long run, and whether it helps the store broaden its appeal to a younger consumer.

Beyond the Macy’JCP issue, the retail world is littered with designer and celebrity brands that overextended themselves to too many stores and too many product categories. Pet supplies and office supplies may be a bridge too far.

Doug Stephens
Guest
Doug Stephens
4 years 5 months ago

It starts with the question “Who is the target market for these lines?” If your 35-45 year old consumers are responding by saying “Martha who?” then you can assume that the brand has lost its essence — at least with the generation of consumers that will fuel your business over the next 20 years.

50+ year old consumers may remember the peak of Martha Stewart’s success. I doubt we could say the same of 18-34 year olds. If anything, they may associate the brand with financial scandal.

It’s no surprise to me that Martha Stewart is doing anything and everything she can to milk the brand before it’s over.

W. Frank Dell II
BrainTrust

One of the best defenses against Walmart is to stock products they don’t sell. When everyone stocks the same item, it is difficult to be different and for a retailer, their reason for being. Stewart likely made a mistake taking her line into Kmart. Neither the product quality nor price relationship seems to fit for Kmart. Macy’s and Kmart customers are very different. If Stewart cheapens her product for Kmart, that will only shorten the product life cycle. When sales slow down compared to total store sales, that’s the first clue that a product or line should be discontinued.

Carol Spieckerman
BrainTrust

The proof is in the sales and in many categories, Martha remains a top seller. Macy’s fight for Martha isn’t just a grudge match and Martha was the one major brand acquisition announcement that J.C. Penney saw fit to include in its transformation strategy under Ron Johnson (even as Penney hints at rationalizing its overall brand portfolio). The fact is, there is a dearth of true lifestyle brands in retail; there are Ralph, Martha, then all the rest. I’ve said many times that “Omnimedia” is one of the more prescient names for a lifestyle branding company. Martha got it that each channel and touch point would build brand equity that supports all of the others. Martha coined the name years before omni-channel was cool and the brand is now living up to its promise: omnimedia, omni-channel, omnipresent.

Dr. Emmanuel Probst
Guest
Dr. Emmanuel Probst
4 years 5 months ago

Martha Stewart is a lifestyle brand. The stores and websites that carry her products are just distribution channels. Sales figures are the ultimate measure of a brand’s success, although retailers should keep an eye on ‘softer’ indicators such as Stewart’s online reputation (number of Twitter followers, Facebook fans…).

Liz Crawford
BrainTrust

This is essentially a market research question. A hundred years ago, when I used to run focus groups, we had exercises which enabled consumers to indicate how far a brand name could extend (into which categories) before losing its meaning. While this kind of testing was qualitative, it set up the parameters for creating concepts, which were tested quantitatively.

There shouldn’t be too much mystery about the impact of a product launch on a brand name. If there is, it may indicate that business people want it more than the shoppers.

Kai Clarke
BrainTrust

Additional revenues compared to incremental branding costs are the easiest way to determine the value of a brand. Martha is definitely overextended. Office supplies? This is truly a stretch for the Martha Stewart brand. The Macy’s lawsuits and others all point to a damaged brand that has overextended itself.

Bigger is not better, and “more” can be deadly to a brand. Unfortunately, only historical performance can truly determine the value of a brand, but with so many other items with her name on them, it is clear that putting Martha’s name on your brand will certainly not offer a unique branding advantage.

David Slavick
Guest
David Slavick
4 years 5 months ago

To state the obvious, it is always about the marketing organization being willing to allow borrowed interest to support their brand appeal. In many cases, it is a sign of weakness in the class/category of merchandise involved — household goods, paint, apparel, etc. Can’t do it on your own to generate differentiated reasons to buy – so give away a slice of profit margin through a licensed deal.

For Staples the female shopper is an elusive target, so it makes sense — on the surface. Martha provides new news to what is an undifferentiated product category. It creates a spike, awareness and support on the floor in-store and then there will be a maintained presence on the shelf. Doing this in advance of Back to School is smart. Will it have a significant incremental effect on their business? No.

Gene Hoffman
Guest
Gene Hoffman
4 years 5 months ago

If ever I get to Heaven, will I have to wear Martha Stewart angel wings? Yes, extension happens.

If Martha Stewart is a lifestyle brand, should America expect her to expand into the current lifestyle hula hoop — birth control? Hush, Uncle Rush!

How do you gauge whether a brand is losing its appeal? By its sales trends and favorable customer reactions.

Brian Kelly
Guest
4 years 5 months ago

Martha’s brand is not confusing. She is very good at managing her brand. Her retail distribution is a bit awkward. But then what of most apparel/fashion brands. It is amazing despite being ubiquitous, each continues to justify inclusion in assortments. But isn’t that true of most CPG brands? Outlet brands need to create meaningful differentiation. “Showrooming” proves the challenge of look-alike assortments.

Or as we like to say, “retail ain’t for sissies.”

Ted Hurlbut
Guest
Ted Hurlbut
4 years 5 months ago

When you read through the list of all the product categories that the brand’s been extended into, and all the retailers that are involved, you get the sense that maintaining brand integrity has been sacrificed for grabbing the quick buck as quickly as possible.

Craig Sundstrom
Guest

How can retailers gauge? That’s easy. When the merchandise doesn’t sell. Oh, how can they gauge BEFORE that? That’s a bit harder, but the fact that the question is being asked suggests the moment is near (or here already). I wonder where it will end … Martha Stewart Motor Oil maybe?

Ed Rosenbaum
BrainTrust

Martha Stewart’s brand has become more appealing since her ill gotten, not necessary trip to prison. (One person’s opinion.) However, there comes a time when the extended line might be going a bit too far. I think MSL is reaching that point.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
4 years 5 months ago

The PetSmart association with Martha is pretty cool. Did you miss her chow-chow, Genghis Khan, winning Best in Breed at the recent Westminster Dog Show? This is a natural fit. (I wonder if she mispronounces “Genghis” like that other New England elite, John Kerry does.)

James Tenser
BrainTrust

There’s very little that’s confusing about following your brand potential down every channel available. Martha Stewart Living is both energetic and well-defined in its pursuit of profitable sales.

Brand exclusivity by category is a decent tactic for the retailer who struggles for individuality. Those who carry MSL lines can easily gauge a softening of shopper interest by tracking the transaction log.

Jerry Gelsomino
BrainTrust

Why? Why do we need Martha Stewart branded items? Are they better than the rest? Is there some advantage to using her branded products? Is she giving the money to charity (Paul Newman brand)? The branding agency who is taking Ms. Stewart’s products out of the kitchen must be relying on fans only.

wpDiscuz

Take Our Instant Poll

How would you rate the strength of the Martha Stewart name at retail?

View Results

Loading ... Loading ...