That's Not Cool

Your brand has left the list of must-haves and is headed toward the list of things people wouldn't be caught dead with. How do you turn it around?
Magazine Contributor
11 min read

This story appears in the June 2002 issue of Entrepreneur. Subscribe »

It's every entrepreneur's dream: You're in the right place at the right time, and your product, service or brand takes off unexpectedly. You're the coolest thing going.

Then just as suddenly, you're not. Your cool has almost run its course, and you run the risk of becoming a cautionary tale in some business textbook. So what will you do when you start losing your cool? It's an important question to ask yourself if you want to be more than just a fad.

The minute you're on the 'in' list, you're preparing to be on the 'out' list," says Nina Kaminer, president of Nike Communications Inc., a New York City luxury-product marketing firm with clients that include Montblanc and Jaguar. If you want more than your 15 minutes, you'll have to find a new way to leverage what you have to offer.

"Brands lose their cool when they lack the will to change, and they abandon what made them cool," says Roger Baxter, who heads the account planning group at The Richards Group, a Dallas advertising agency. Here are the stories of three companies finding a way to be cool all over again.

Mossimo: New Success in Mass Appeal

In the late 1980s, Mossimo was hot. Some touted the boutique sportswear brand as the next Armani. But in the 1990s, it was overshadowed by Tommy Hilfiger and Gap. By 2000, the company faced distribution problems and bankruptcy. What it needed was a new strategy. "When you hit a funny place in the road, you'd better find another road or you're dead. So that's what I did," says Mossimo Giannulli, founder, chairman and creative director of Mossimo Inc.

That new road is a three-year exclusive licensing agreement with Target estimated to be worth about $1 billion. Mossimo licenses its name and designs, and Target handles all manufacturing, distribution and marketing. Giving up boutique chic for the profits of wider distribution has been a shot in the arm for the Santa Monica, California, company. While Giannulli, 39, won't divulge company sales figures, they "are exceeding our internal plans; that's for sure," he says. "We're extremely pleased."

Yep, They're Cool, Too
Feel free to emulate these cool kids as well:

Beanie Babies and Swiss watchmaker Franck Mueller are just two brands that built a following simply by being hard to find. "That's how the product maintains its cachet," says Basil Englis, chair of the marketing department at Berry College in Mount Berry, Georgia, and partner in market research and consulting firm Mind/Share Inc.

This strategy is working for Vernon, California-based Lucky Jeans. Lucky's founders, Barry Perlman and Gene Montesano, also started the widely available Bongo Jeans in the 1980s, and watched the brand cool off. This time, they're keeping the label exclusive. It's sold at only 500 upscale U.S. stores and 53 Lucky Brand stores. While Lucky doesn't release sales, it plans to open at least 20 more retail stores in 2002.

Trendy, 4-year-old Too Faced Cosmetics is also going for exclusive distribution. The Irvine, California, company's celebrity clients include Madonna and Britney Spears. CEO Jarrod Blandino, 31, has been approached by a variety of retailers, but he's only selling the line at 300 locations worldwide. "If you can get a piece of Hollywood everywhere, who wants it?" Company sales are expected to be between $8 million and $10 million this year.

Appealing to a wider audience isn't without risk, however. "Sometimes when companies try to create more of a mass market, a lot of the early adopters feel the brand is being bastardized," says Carla DeLuca, principal of Luca LLC, a marketing consulting firm in San Francisco.

Giannulli admits worrying that mass distribution through a discount-oriented retailer would diminish the brand's cachet. "I was a little concerned. I was hoping it wouldn't screw with the integrity of the brand," he says. But he was bowled over by Target's ability to market designers like Phillippe Starck and Michael Graves.

Mossimo's alliance with Target has turned out to be a stroke of business luck in an economy where fashion-conscious people are looking for hip goods at reasonable prices. The whole concept of mass market is changing anyway, as large retailers gravitate toward previously elite designer brands that help them establish a unique niche in the marketplace, says Maureen Smullen, president and creative director of Smullen Design, a marketing firm in Pasadena, California, that has worked with large retailers including Target. These days, "there's nothing wrong with being mass-marketed," she contends, adding that large retailers avoid the phrase now. "'Mass' is not a word they use anymore. They don't like it because of what it used to imply-cheap, uninteresting and not well-made-and that's not necessarily the case anymore."

Giannulli thinks that creating fun fashion at a fair price has made Mossimo a cooler brand. "We're able to do so much more product and get to so many more kids who can afford it now," he says. "I think that's really cool."

The biggest challenge in making a decision like this is to decide what you want as an entrepreneur. "Do you want your business to be a million dollars a year?" asks Giannulli. "Then that's really cool. If you want a billion-dollar brand, then there's another way to get cool. It's all in the eyes of the leader of the company."

Razor USA: Scooting On While You're Hot

Reinventing your company or product is another way to regain your cool. Consider Madonna, who constantly reinvents herself to get attention. Along the way, it's given her longevity in a tough business. Reinvention is especially important if your product isn't multidimensional. "There's not a lot you can build on to a pet rock," Smullen says.

Razor USA LLC had the product for the 2000 holidays with its Razor Scooter, which flew off shelves at toy and gadget stores. "The way people responded before they even knew what it was, you knew it would be a hit," says Carlton Calvin, president of the Cerritos, California, company.

He was right. By summer 2000, Razor was shipping 250,000 scooters a week. Soon the Razor Scooter was everywhere, from the cover of The New Yorker to a question on Who Wants to Be a Millionaire.

Inevitably, the product started cooling off with consumers. Orders started dropping. "It was pretty precipitous," Calvin says. "It was like, 'Hurry up, hurry up; I need to get as much as I can.' And then it was, 'Whoa, we've got enough. Don't send any more." Scooter sales have fallen off considerably. "It's not the new-new thing anymore, and it's also fully saturated in terms of people having it," Calvin says. Which begs the question: So now what?

Calvin realized scooter crazes come and go every 20 years. So while the Razor Scooter was still hot, he was already thinking about a follow-up product. Studying Southern California culture to find something new, Calvin, 40, noticed the old-fashioned pogo stick was getting popular in trendy circles and decided it would be the next toy he would reinvent. The result is the Airgo, an air-powered pogo stick that can be adjusted for weight, folded up and carried in a backpack. Like the scooter, the Airgo is sold at toy and sporting goods stores and The Sharper Image, and it's being marketed mainly through live product demonstrations instead of print and TV advertising.

But will the Airgo take off like the scooter did? Time will tell, but by the end of December, Airgo sales were already three times the company's projections. "It's an innovative product," Calvin says. "Pogos have been around a long time, and there's been a resurgence in their popularity before." Another product in production is the "Punk," a minibike that's been trendy in Southern California.

Above all, don't be afraid to try to top yourself. Calvin suggests keeping your ear to the ground for trends, putting a lot into a unique design and having patience and confidence while your product inches toward critical mass. Says Calvin, "You have to be able to go through the trough while you're waiting for your next product to get hot."

Airwalk: Playing Hard to Get

Sometimes, to regain your cool you need a whole new brand. It's working for Airwalk, the Golden, Colorado-based shoe-maker targeting skateboarders. Founded in 1986, the company was one of the first in the action sports arena, which has mainstreamed with 12-to-20-year-olds, thanks to events such as NBC's Gravity Games and ESPN's X-Games.

But Airwalk went through a period a few years ago when it was pretty uncool with its core audience. The typical skater is someone who "can smell a fake from a mile away," says Bruce Pettet, 37, CEO of Tare7, the holding company that includes Airwalk. In trying to reach a larger audience, the company's message and products had drifted away from the hard-core skater. "Quite frankly, we left our authenticity," Pettet says. "It was a huge mistake."

Trying to make these kids think Airwalk was cool again wouldn't work. Instead, the company needed a whole new brand. Last spring, it released Genetic, a shoe for the hard-core skater. While the Airwalk brand continues to seek mass appeal, Genetic is aimed at action sports fanatics who care about performance as much as looks.

Genetic has a strict distribution policy to keep it exclusive and harder to find, and it's advertised only in skate publications. You have to be in the know to get it, which only makes the shoe cooler to the people who wear it.

The company is going with a grass-roots approach to reach this consumer. Category managers are all under 30, and Pettet spends a lot of time hanging out at skate parks, just watching and listening. And the strategy is working: Domestic bookings for Genetic in 2002 are 80 percent higher than last year. Total company sales are about $100 million annually.

So which strategy will work for you when your brand is cooling off with consumers? "You need to reassess what's important to your customer and how the emotional connection with your brand has changed," DeLuca says. "Then reinvent your relationship with them on their terms."

Who knows? You might find yourself in the right place at the right time all over again.



Can having customers from different age groups make your product seem less cool? When Abercrombie & Fitch saw a 14 percent drop in sales at stores open at least one year in last July alone, some analysts blamed it on the chain turning off its college-age customers who didn't want to be buying the same clothes as tweens and teens. To regain its cool with the college crowd, Abercrombie & Fitch has started two new stores: Hollister Co., a new, lower-priced store aimed at 14-to-18-year-olds, and abercrombie (with a small "a") for 7-to-14-year-olds.

But the opposite is true for Queens, New York-based shoe designer and retailer Steve Madden Ltd. Teens, Gen Xers and boomers all wear his shoes. Having such a wide demographic seems to work-company revenues for the third quarter of 2001 stood at $70.25 million, an increase of 16.9 percent over 2000-and it doesn't seem to bother founder Steve Madden. In fact, knowing older consumers buy his shoes excites him. He says, "I think that having older buyers makes our shoes more cool."

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