Old school’s in session: the secrets behind the retro brand revival
If history has taught us anything, it’s that trends are cyclical. Our kids might laugh at the flares we wore in the 1970s, but you can rest assured that they’ll own a pair at some point in their lives. Retro trends are predominant in fashion and have been for years, but our passion for the “old school” goes beyond the clothes we wear.
Our desire to engage with vintage products, services or even styles is, like anything, a form of self-identification. We want to be associated with a period in time, be it because we lived it first time around or because we wish we had. But consumer appetite for nostalgia doesn’t guarantee a brand success throughout the decades.
All brands have a finite lifespan – if they aren’t nurtured, they won’t grow. A company can have significant brand equity for the majority of its existence, but if there’s not new investment at the right time, the organisation can lose momentum. And it can be difficult to recover.
Converse: a brand as tough as old boots
Just because a brand is associated with a certain product, service or market vertical, doesn't mean it can’t pivot its business and reinvent itself. Converse is an example of a brand that has done just that. The footwear company made its name in the early 20th century through its association with basketball, which as a sport was also exploding in the US. Every basketball star from Wilt Chamberlain to Bill Russell wore Converse “Chuck Taylor” All Stars on the court. At its peak, Converse controlled an estimated 80% of the US sneaker market; the brand’s appeal spilled from sport into wider American culture, appearing in Hollywood films and adorned by icons of the time like Kurt Cobain.
But the sneaker market and manufacturing techniques evolved and, amid increased competition from the likes of Nike, Reebok and Puma, Converse’s dominance was cut as the century drew to a close. The firm filed for bankruptcy in 2001. A turnaround team was brought in after a management buyout by Footwear Acquisitions to help revive the brand, which was successful enough to convince sports giant Nike to step in and scoop the company up for $305 million. Nike quickly saw a return on its investment. Converse generated just $205 million in revenue in 2002 – in 2015 that figure was $2 billion.
Nike saw the power of the Converse brand and backed its belief with fresh investment. Nike saw how the “All Star” transcended sport organically and took the sneaker out of the sports arena, planting it firmly in fashion. This chimed with the rock music revival of the early noughties when popular new bands like The Strokes channeled the fashions of idols like The Ramones, wearing All Stars with skinny drainpipe jeans and driving renewed interest in the sneakers from a generation of teenagers. The launch of the Converse All Star II last year positioned Converse as a premium brand, with the shoes retailing at a 60% markup on the originals.
Lego: rebuilding the empire
Fresh investment to revive an ailing brand doesn't have to come from outside sources – and it doesn't always have to be financial. From its formation in 1949 until 1998, Lego was seemingly unstoppable. Its building blocks were in almost every child’s bedroom throughout the Western world. But the rise of computer games cast a dark shadow over Lego and, as the millennium approached, the company began hemorrhaging cash. In 2004, Lego lost $287 million.
But the company stopped the rot, first by selling off all non-major assets and then by changing the organisation’s culture and placing a greater focus on research and development to keep pace with the shifting entertainment market. It’s paying off: Lego pocketed $1.4 billion profit in 2015 thanks to its renewed focus on its core product and moves into ancillary areas such as videogames and movies (The Lego Movie grossed $469 million in 2014). The benefits of these successes, punctuated by the global smash hit movie, were more than financial – they all helped Lego build its brand momentum back up.
While loved by children, Lego has a retro appeal for adults too. As much as 10% of all Lego sales in the US is accounted for by items bought by adults for adults, and there are even conferences held around for world where like-minded “AFOLs” (adult fans of Lego) can congregate and learn more about their favourite retro brand.
By taking stock of its strengths (in this case its strong brand identity) and singling out opportunities through which to accentuate those assets, 67 year-old Lego managed to drive a revival and enter a second golden era.
Polaroid: a picture of health – eventually
Polaroid is an example of a brand that has experienced highs and lows – and is now enjoying a retro renaissance. The decline of Polaroid’s business in the wake of the digital photography revolution is well documented. The firm boasted a $4.1 billion market cap at the turn of the 1970s as it launched its collapsible SX-70 Land Camera. Just 30 years later private equity firm One Equity Partners bought bankrupt Polaroid and its assets for just $13.4 million.
Photography had moved on – and Polaroid had failed to move with it by investing in its future. It took two bankruptcies and subsequent investment to help the company back on an upward trajectory. Now, the brand is reinventing itself for the digital age, offering a range of products including digital cameras, smartphones, tablets and HDTVs. Polaroid is also tapping into its retro brand equity with a number of instant cameras inspired by the products that made the company famous, capitalising on the nostalgia for physical photographs and the popularity of faux-vintage image-sharing sites like Instagram.
The thread running through the stories of these three brands is that name alone is not enough to ensure continued and consistent success. Converse, Lego and Polaroid had to take stock of their situations, invest in their future and take risks – even if that meant deviating from the products or services that made them successful the first time around. They regained their brand momentum and subsequently their brand equity. And all three are now reaping the benefits.
Trends may be cyclical, but brands cannot rest on their laurels and assume that the market conditions that launched them will once again propel them to success – they have to take their future in their own hands. If they don’t, then the next generation will be learning about them through history books.
__Drew has left The Frameworks._