Branded to Sell
Retailers find path to differentiation through branded merchandise.
When Johnny Knoxville wore a black Kum & Go T-shirt in the 2006 comedy-stunt movie “Jackass Number Two,” it revealed to the West Des Moines, Iowa-based chain just how powerful self-promotion can be.
After the appearance, the company sold through hundreds of T-shirts and baseball caps, with much of the merchandise ending up for auction on e-Bay. While Knoxville possibly wore the T-shirt for subversive reasons, whatever the purpose, it’s all good, as far as the chain is concerned.
“We have a unique name,” Dennis Folden, former COO of Kum & Go LC, West Des Moines, Iowa, told CSP back in late 2011. “The ‘K’ comes from Krause, the ‘G’ from Gentle. It’s given us the opportunity to market that name.”
“That propelled us to fame, having that T-shirt in the movie,” says David Miller, senior vice president of marketing for Kum & Go, who points out that particular item is not currently sold— although it may soon be. “That was a more classic, retro design. We always look at what the current trends are and make considerations for our ever-evolving line.”
Kum & Go’s branded line includes 50 SKUs, merchandised in the store and sold online, with a range of branded T-shirts, sweatshirts, baseball caps, mugs and more unique items such as computer bags, golf balls and even a Kum & Go wine caddy available for purchase.
As Miller explains it, the branded line is there to help customers express their loyalty. “For Kum & Go, as one of the premier convenience retailers in the country, we’ve always felt our consumers have a certain affinity and loyalty for the brand,” he says.
Slidell Oil Co., Slidell, La., a fuel distributor that owns and operates 16 sites in Alabama, Louisiana and Mississippi, has attempted to move beyond its otherwise nondescript name and build loyalty by adopting a purple cow as its mascot. The bovine is meant to embody the very concept of differentiation.
“You are driving down the road every day and you look out in the field and see dairy cows,” says Jack Parker, general manager. “One day, you drive by and see a purple cow, right? That would be remarkable.” “Purple Cow” is also the name of a business book by Seth Godin, and a theme adopted by businesses ranging from an ice-cream shop in Chicago to a restaurant in Little Rock, Ark.
Slidell’s Purple Cow branded merchandise includes T-shirts, lighters, coffee mugs and fountain-drink cups provided by distributor Imperial Trading Co. The chain is working on a private-label cola, and it already sells Purple Cow single-serve and gallon bottled water and fountain drinks. In the works: drink huggies—also known as koozies—and Styrofoam ice chests.
“We just want to put the cow on anything and everything,” says Parker. Sixteen of the retailer’s stores are branded The Purple Cow; the company is rebranding 15 others that were acquired through Slidell’s 2011 acquisition of Interstate Oil Co.
The bottled water and lighters are the biggest sellers, Parke says, but he estimates that when all of the general merchandise items are combined, it accounts for only 1% of in-store sales. The purpose of the line is purely promotional.
The stores sell about as much Purple Cow branded bottled water and lighters as they do national brands, Parker says, “so it’s fairly good demand.”
Smell of Success
Stinker Stores’ mascot, Polecat Pete, is a fixture of rural Idaho. Funny roadway signs featuring the cartoon skunk have been a regular feature of the state’s highways for years, alerting drivers to local sights such as “petrified watermelons”— actually, watermelon-shaped rocks in a nearby field—and directing them to the nearest Stinker Store.
The company has since expanded to billboards with humorous slogans such as “He who knows everything eventually turns 21,” “If evolution works, why do moms only have two hands?” and “Avoid airport security. Fly naked!” Now the Boise, Idaho-based chain, which operates 70 sites in the state, is taking Pete into the 21st century with a Web-based store selling branded merchandise, due to launch this fall.
“The reason for the online store is we do get calls from someone out of state saying, ‘I heard about this; I was traveling through and forgot to grab it,’ ” says Lon Audet, marketing and merchandising manager for Stinker Stores. “This time of year, we have a few tourists in the stores—they’re a good clientele for it.” Locals, meanwhile, are waiting for next cool T-shirt.
Stinker’s branded lineup encompasses more than 250 SKUs, including everything from luggage tags, lip balm, air fresheners and ice scrapers to apparel such as T-shirts, sweatshirts, bandannas and baseball caps. T-shirts are the biggest seller for Stinker, ranging from children’s “Little Stinker” tops to adult “Finest Gas” tees. Novelties include stuffed skunks, and Daniel Boone-style hats with a skunk tail.
“If we find something that looks interesting and will sell with a skunk logo on it, we will see if we can negotiate a deal,” says Audet. The company, which self-distributes, handles the shipping and handling, and also uses local vendors to source manufacturing. At the end of the summer, the Stinker team reviews sales and decides what items to cut and which to ramp up.
The branded merchandise has become truly a team-building collaboration for Stinker, which gets inspiration for the phrases on its T-shirts from employees, including everyone from store managers to supervisors and office workers. “We can’t do everything,” Audet says. “We will roundtable it and say, ‘That sounds cool. Let’s put it on a T-shirt.’ ”
Beyond the Box
Stinker has no set approach to merchandising the line inside the store, namely because its 64 sites feature 58 different footprints. However, store managers are encouraged to be creative in their space, with the biggest challenge keeping the product clean at the high-traffic locations.
“The beauty of the whole thing is it’s fun,” says Audet. “You take the mundane stuff day in and day out, and it lets them have fun and be creative. We give them the autonomy to make it look good.”
Polecat Pete also inhabits Stinker Stores’ Facebook page, which features photos and videos of the mascot with customers, posing with product and hamming it up, and is frequently featured on the official Stinker Stores blog.
At Kum & Go stores, the merchandise is displayed in a 3-foot set of apparel and novelty items. “We try to carry as much of the core items as possible,” says Miller. The selection varies by store and is not necessarily the same as what’s sold online. The company is working on bringing consistency to the offer, so that the same merchandise found in stores can also be bought on the website.
Senior management and Kum & Go’s merchandising teams constantly review item sales and determine winners and losers based on a bell curve, examining the bottom 10% to see where they can improve. The most popular item? T-shirts. For 2013, the company is considering introducing retro design T-shirts, similar in style to that worn by Knoxville, especially in light of the retro trend that CPG manufacturers such as PepsiCo and General Mills have been playing with in their own product packaging.
Despite the viral appeal of its brand, Kum & Go sees its branded-merchandise line as mostly promotional. While Miller declines to share what percentage of general-merchandise sales it generates, he explains, “We’re not in the merchandise business and making a significant part of sales from it. We’ve answered requests from consumers that we sell brand loyalty. By offering it, it’s a great marketing tool, and a way for customers to wear and show the brand.”
The branded lineup at Stinker contributes the majority of sales in general merchandise, a category that otherwise has proven lackluster. That said, the company does not make much profit off the merchandise, says Audet; the margin on T-shirts, for example, runs around 15% to 20%. That’s because the retailer must keep a close eye on pricing.
“The price point is a lot more important,” says Audet. “People aren’t going to buy them if it’s a $24.99 T-shirt. It’s not The Rolling Stones.”
Rather, Stinker sees Polecat Pete and the branded merchandise as more of a promotional opportunity than a profit center. “It’s something that differentiates us,” says Audet.
“When you’re driving down the road and see a refillable cup on the side of the road, we want it to be ours,” he says. “It’s the same thing with our merchandise. We want the name out there, the fun and advertising.”