Volume 60: Break up with your brokerage.

1. A confusion of strategists.

tl;dr: Twitter wag gets scarily close to the truth.

Over on Twitter, someone recently asked what you’d call a group of people from your chosen profession, like a pod of whales or a flock of sheep. Among some rather brilliant responses (a balance of accountants, a drip of urologists) was “a confusion of strategists,” which hit me right between the eyes because it’s exactly right.

The problem, I think, is that the term strategist doesn’t represent a shared craft but is instead a self-appointed identity.

Unlike architects or doctors, or designers who spend years at school learning the practices, philosophy, and skills necessary to excel in their chosen profession, a strategist can come from any background with any level of expertise and with any level of understanding. As a result, strategists lack a shared foundation of knowledge and practice, sometimes even a common set of facts.

No wonder people working with strategists can find them so confusing. In my own career, I’ve met or worked with people who had backgrounds as varied as management consulting, design, advertising planning, creative writing, project management, the law, and even a couple of non-practicing architects. All of whom approached the field of brand strategy quite differently, one to the other.

Now, the great thing about this diversity of experience is that it provides for a richness of varied ideas and ways of thinking, many of which I’ve learned from. But it can also cause major problems when people don’t share the basic building blocks of understanding. Something that is particularly important right now as CMOs rank brand strategy a critical priority coming out of the pandemic we’re currently in.

So, with this in mind, what actually matters in a strategist?

Let’s start with the things that in and of themselves don’t matter. The process steps, frameworks, and deliverables that typically make up the strategist’s toolkit don’t really matter. It doesn’t matter whether you’re talking insights or purpose or positioning or personality or values or manifestos or principles or brand triangles or brand houses or brand vision or whatever. I’m agnostic to all these artifacts. I’ve seen too many different things work to be all that dogmatic about any one of them being better than any other.

What does matter is that anyone calling themselves a strategist must at a minimum understand what strategy is. Unfortunately, too many do not.

Strategy is resource allocation. If we had infinite resources, there’d be no need for strategy; we’d just do everything and double down on what works best. But since we don’t have infinite resources, we have to make choices, and the act of making choices means deciding what we will and will not do. As a result, strategies are the focusing mechanisms we create to guide our choices in a clear direction. And if a strategy does not guide choices, then what has been created is not actually a strategy, no matter how it might be labeled.

This matters because the single most common mistake I see in strategists' work is the creation of artifacts labeled as strategies that are not, in fact, strategic. Rather than something that meaningfully guides choices, we’re all too often given loftily worded artifacts that fail to connect to the business at all.

A brand cannot be what we want it to be just because we declare it so. The strategist's job is not to create the lofty but disconnected statement and then walk away. It’s the act of helping an organization figure out how to make the hard choices between competing priorities so that they can nudge the brand in the direction opportunity lies.

Everything else is just fluff.

2. Perfect timing and the value of novelty.

tl;dr: Break up with your brokerage with Public and Michael Bolton.

By now, the byzantine story of how Robinhood makes money, seemingly at the expense of its customers, has been well told. While to you and me, they appear to be offering free trades, market-makers pay Robinhood for order flow behind the scenes. While the mechanisms of this are complex, the effect is that while your trade may be “free,” you’re actually paying a little more for any stock that you buy and getting a little less for any stock that you sell, with middlemen billionaires pocketing the difference.

Now, this didn’t matter all that much until it did. After all, we’re pretty used to “free” services where we’re not really the customer but the product. And we’ve proven to be largely OK with them as long as the value seems worth it.

However, amid the Gamestop debacle, the whole idea of payment for order flow blew up into the national news. Without getting into it, the optics of the situation were terrible, making it look to customers like Robin Hood was siding with the market maker at the significant expense of its customers.

From stage left, enter Public.

Public is a small, scrappy startup riding the free trading wave with a slightly different and more community-driven model. The genius move, though, is that Public responded to the Robin Hood news-cycle with a classic exercise in competitive contrast by shifting its business model to no longer take payment from order flow but get paid through customer tips instead. And, as a result of this being a nationally newsworthy story, they rapidly grew to over 1m customers.

Doubling down, they’ve now released a new ad starring fading crooner Michael Bolton singing about how you should “break up with your brokerage.” It’s brilliant. Not just because it’s funny and timely and creative, but because the novelty effect has given them another bite at the national news cherry at exactly the right time. Individuals currently make almost 20% of all US stock trades, and Robinhood's customer growth has spiked considerably every time a stimulus check is paid out. With another round of stimulus likely imminent, this is exactly the moment Public needed to exploit to shift its brand to top of mind status.

Public is not a big company. They don’t have the money to spend running this ad broadly. But, they can use something creative and timely, and relevant to get the news cycle and social media to spread it for them, which it’s doing. They’re using the power of novelty to accelerate attention. It’s really quite brilliant.

It’s an exercise in why timing and novelty matter so much to brands. We sometimes get so lost on what we’re doing that we forget that the right decisive moves at just the right time, enabled by creativity and novelty, really have the power to drive growth.

Now, to be clear, when I say novelty, what I don’t mean are stunts—irrelevant stunts weight down advertising. What I do mean is putting something highly relevant into a very unexpected context. It’s the unexpectedness that we respond to, which is also why it has such a rapidly decaying half-life. As soon as something novel shifts from being unexpected to becoming a formula, it loses all its power. (To follow up on my previous rant about best practices, the best practice here is to be novel, not turn what was novel into a commodified formula. I’m looking at you, DTC).

Anyway, bravo Public. Great stuff.

3. Like a phoenix from the flames of retail?

tl;dr: Online retail going physical will transform Main Street.

If you’re a brand junkie like me, you’ll no doubt have a fairly well-thumbed copy of “How Brands Grow” by Prof. Byron Sharp laying around. In it, he makes the point that brand growth is largely dependent upon two things - mental and physical availability. Mental availability so the brand springs to mind when you have a need and physical availability so the brand is literally physically close by and easy to get hold of when you want it.

If you think about it, it makes perfect sense. You’re more likely to buy a brand if you think about it first, and you’re doubly more likely to buy it if it’s right there in front of you.

As we’ve gone through the Covid-19 pandemic, we’ve seen the rise and rise of e-commerce and the crushing of physical retail. But looking through the lens of physical availability, there’s now a singular opportunity for the enlightened e-commerce retailer with cash in their pocket: Rents are cheap, and there’s a lot of quality square footage available.

If we combine cheap and available real estate with the empirical evidence that physical availability is a key component of brand growth, we’re left with the beginnings of what might be a powerful renaissance of physical retail through the lens of what was once labeled online DTC. Arguably the first shoots are already peeking through.

This week, luxury online consignment store The Real Real announced its intention to expand the brick-and-mortar “neighborhood store” format it’s been experimenting with. And the why is very simple. People who shop in-store and online spend 3X as much as online-only, and the people who bring goods to be sold into the store bring 1.5X more product value than those who send it in online.

And The Real Real is not alone. Allbirds has accelerated its physical expansion through the pandemic, as have Casper and Warby Parker, and Freshly Cosmetics has started opening stores. Meanwhile, luxury home goods retailer Restoration Hardware has doubled down on its physical presence, and discount brand TJ Maxx has done the same.

The Real Real won’t be the last online direct-to-consumer brand that does this. As the cost of “digital rent” to Google and Facebook continues to rise, the prospect of cheap rent on Main Street is only going to become more and more attractive as vaccines roll out and the pandemic recedes into the rearview mirror. (I don’t know about you, but I suspect by this point a lot of people are desperate for full contact retail therapy after a year of online only).

Oh, and don’t believe the naysayers who proclaim that physical stores will hold back DTC. This attitude just demonstrates an ideological predilection toward digital that fails to take into account any of the things that actually drive growth. They’ll be saying that Target stocking Harry’s is a bad thing next.