Photos: Dollar Shave Club; Gillette
Knowledge@Wharton
Presented here for discussion is a summary of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
A number of legacy retailers and classic consumer packaged goods brands are struggling — some exiting the marketplace — despite the pull of nostalgia that might have protected those brands in the past.
Santiago Gallino, a Wharton professor of operations, information and decisions whose research focuses on retail, said the idea of a family tradition of buying in a certain store as part of a certain routine is still very relevant. But one countervailing factor now is the abundant and easy availability of information about what other stores are offering.
“Years ago, if you were a Sears customer or a Macy’s customer, you might have known what other companies were doing, but it was not as prevalent as it is today,” Mr. Gallino noted. “If you were offering not-so-great service or not so up-to-date stores, you could get away with that easier than today. I think as much as we like to keep our traditions and routines, nowadays with all the information and reviews out there we can quickly learn that a company is cheating us.”
If legacy brands were once efficacious to consumer fidelity, then social media has added an element of “promiscuity” to the retail environment, said Americus Reed, Wharton marketing professor and identity theorist. “It’s like being on Tinder — there are thousands of objects you can get connected with,” he said, referring to the dating app.
Other factors competing for customer affection with the nostalgia-legacy factor have multiplied in recent years: concerns about a company’s politics and ethical behavior, its policies on environment concerns and child labor, or the sourcing and composition of ingredients.
It’s shocking to see big legacy brands like Gillette and Johnson & Johnson struggling, said Barbara E. Kahn, Wharton marketing professor.
New business models challenged some, according to Ms. Kahn, citing the impact of Dollar Shave Club and Harry’s on Gillette’s. But in many cases, legacy brands have failed to meet digital natives. She said, “Digitally native vertical brands go to millennials with an emotional, branded story that speaks to their lifestyles. Legacy brands didn’t see the change and didn’t change fast enough.”