Shinola Case Study Questions - Seminar 8 Branding

1. What is Shinola’s Brand Story and how powerful is it? From what does it derive its
power? How does it build meaning for the Shinola Brand?

Kartsotis, founder of Shinola, was a veteran of the watch business, starting with FOSSIL, he
created Shinola, a new luxury lifestyle brand in 2011. They wanted to create a new type of
luxury watch but at lower prices. Located in Detroit, in their first store opening,their annual
target sales were get over, as in New York.

Its power derives from their strategy of locating the brand in a city, Detroit, that was
completely destroyed, they wanted to create a business model that returned activity in
Detroit, they wanted to gain power by making people feel as if they were “doing their part in
Detroit’s fight for survival”. They created opportunities in a city where they needed and then
they cooperate with other companies all over the world to manufacture some pieces they
couldn’t by themselves.

As said in the text, for Shinola, built a company is not meant by the things they made but by
the people who make them. It’s cooperative work made by people that, for example, were
unemployed due to the poverty of Detroit and a new opportunity in working in this new luxury
brand appears.

2. Why do contemporary consumers appear to be responding to Shinola’s story?

Which needs does it fulfill for them?

As said before, people not only buy some luxe products, but also feel that they collaborate
with the recovery of Detroit. That’s is a reason why contemporary consumers highly respond.
Also they are buying a local product and even if it’s more expensive they apport to the
country’s economy. Then their target happened to be 18-34 years old old milennials to
people of 35 years, affluent and male as their variety of products increased and it was mid-
century design.

3. How authentic is Shinola’s Brand Story? How much does authenticity matter to
luxury consumers? What should Shinola do to be perceived as an authentic brand?

Authencity is what make the brand special, different from other. Having an history, culture is
important to differ from the other. Shinola has a story that comes from far, as its name goes
back to 1960, when Kartsotis was searching for a meaningful name and found it in a defunct
shoe polish company in Rochester, NY, he acquired the rights and he claimed it will mean
“the beauty of industry, our respect for craft, and a commitment to quality”.
We can also say Shinola is an authentic luxury brand as the review Forbes made a study
mentioning all characteristics the brand has to be real luxury authentic brand:
-Superior performance, Craftmanship, Exclusivity, Innovation, Sense of Place and time,
Creative Expression, Relevant, Heritage, Responsibility. All of these characteristics make
Shinola earn this title. Shinola has to link workers dedication to customers offering them
quality and values that link them to the brand.
4. How effective/ineffective is Detroit for place branding? What are the opportunities
and risks of aligning a brand with Detroit?

Previously we have given arguments that answer this question and it is quite clear that
Detroit has been much more effective than ineffective for Shinola. Even so, we want to
return to give those positive arguments that have benefited the company, as well as the
negative ones (which have also been there).

Contradictory as it may seem, despite the history of failure that the ruined American city of
Detroit represents, some brands used the name of the city to sell their products. More than
one company has sought to make this disadvantage work in their favor and, as we have
said, Shinola is the best example.
Part of the decision to choose Detroit was that they were riding the watch engine and "What
better place to be in the heart of the automotive industry, where so many engines have taken
place?" Said Heath Carr, General Director of Production Bedrock . They knew they wanted
to do their products in the USA and so they did. Shinola is known for using local workers
and, when possible, also materials from the area, although part of the components of their
watches also come from Switzerland and China.

The Shinola watch company has faced many negative criticisms over the years. Many have
accused the company of using Detroit as a marketing tool. In a Times metro article, they
commented that Shinola had "a proxy of the history of the return of Detroit", which some see
as a way to capitalize on the poverty of Detroit. Others disagree with Shinola's promotional
material that says there is an alleged exploitation of black culture and a perpetuation of his
image of "Salvador Blanco". On the other side of the controversy, others say that Shinola
cares and has helped Detroit to become a cleaner and more secure city to live by providing
jobs for the local economy. Although there is some controversy with the dubious marketing
campaign of Shinola and its affirmations of being 100% Detroit, they have the support of
their customers who love their watches.

5. As Shinola expands into US markets beyond Michigan and into international

markets far away from Detroit, how should the Shinola Brand story be changed, if at
all? Why?

It is true that a big part of the brand’s recognition is due to being founded in Detroit in a
moment where the city was in bankruptcy and decaying. But in order to expand to an
international level they do not need to focus on the city of Detroit. What they should focus on
when expanding their brand is more about the experience in store and the quality of the
brand. They need to deliver the best guest experience and focus on that. Something that will
also be important to change their brand story is that their shops are authentic to the city or
the location.

All in all, we believe that the company already has enough power and influence to be able to
expand without any problem internationally with its appropriate strategies. It is true that they
will have to make an effort and put more emphasis on the rest of the countries since they will
not have a clientele from the US.

6. Have Washburn and Kartosis made the right move in launching the sub-brand
Detrola watches? Why or why not? How might it affect brand equity?

Washburn and Kartosis have made the right move to launch the sub-brand Detrola because
it enables the company to reach a bigger audience. Also they have kept the essential
characteristics of their image, but at the same time creating a more affordable and original
design.

Brand equity is affected positively due to the fact that the sub-brand has a differential effect
from the core company as the designs of the watches are more attractive and colorful. It is
also very beneficial to the company because they have achieved to be very consistent on
their brand content regarding Shinola, and they have not lost their values and key
characteristics. For instance, they have not lost the importance of implementing Detroit’s
identity, as in Detrola’s products there are featured aspects of Detroit’s sports and cultural
scene. They have also stuck with the importance of emphasizing on their artisanal
production and craftsmanship with high-grade components, but all this in a more affordable
price.

7. How well does the Shinola Hotel fit into the brand strategy? Why?

Shinola’s main strategy was using Detroit as their production place so that they were seen
as “rescuers” and it was really effective for the brand.

They also chose a great location for it, the main street. This street lost importance when
Detroit failed and building the hotel there attracted new tourists, new people around the
street that all the locals remembered with pride. Shinola Hotel brought to the city movement,
money and recognition.

8. How should Washburn respond to the Rethink Shinola Movement?

The Rethink Shinola Movement was created by Rebekah Modrak. It was about putting on doubt
Shinola’s values and their compromise with the city and workers. She realized that there were some
immoral attitudes like racism or labor exploitation. This is a way of being critical with your own
company’s actions.

In our opinion, Washburn should face this problem by having clear their motivations and choices. In
this notice they must transmit their commitment with the city by showing clearly how they are going to
do it, for example, by giving work opportunities. He also must try to apologize to all those people who
could be offended by some campaigns. They will also have to change the image people have about
them, and it can be done by hiring Detroit’s people and giving them better places to work. In this way,
their image of empowering only white people would change. Finally, they would have to change their
content brand marketing too. The video “A Snapshot of Live in Detroit” got a lot of criticism by many
people in the city.

9. What can other luxury brands learn from Shinola’s experience of building a new
luxury brand in today’s contemporary marketplace?

This case was known as a “new luxury” case. These luxury brands tended to be artisanal, extravagant
and with a lot of time working, but Shinola appeared without a big legacy and many times without all
those inaccessible points other brands offered. For luxury consumers, how the product is done is
something they take into account at the moment of getting the product. Information instead of money
was what consumers needed to access. According to Shinola,: “Customer experience matters. It
builds trust, loyalty and repeat purchase. Price alone no longer defines a luxury experience. It’s about
values.”

But nowadays, things have changed a lot and everything is different. All those brands who face
challenges will be more valuable. Another thing they can do to success is to have be self-critique and
to know when they have done things right and when they haven’t, as in the Rethink Shinola
Movement.