Motown Made

Motown

Made Luxury goods maker Shinola is marketing upscale watches and bicycles by playing up the brand’s blue-collar roots

By Christine Birkner | senior staff writer

 cbirkner@ama.org Photos courtesy of Shinola

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PerHaPS no aMeriCan CitY HaS a Better StorY to tell riGHt noW tHan Detroit.

Beginning well before the beleaguered city’s bankruptcy filing in 2013, tons of ink has been spilled about Detroit’s declining population, high unemployment, poverty and high crime rate. There have been photo essays both on its abandoned buildings and on its resilient and resourceful residents.

(Marketing News joined the fray in July 2013, running a story on urban planners’ and the business community’s efforts to reimagine the city as a hub for new businesses and tech startups.)

The ongoing tale of this once-mighty city’s comeback attempts makes for compelling content and—as a handful of auto brands and at least one luxury goods maker have found—positions it well to serve as prime marketing fodder.

Four-year-old Shinola, which makes retro-inspired luxury watches, bicycles and leather goods, has built its brand around Detroit’s nascent renaissance and the company’s own role in it.

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Shinola’s headquarters, in Detroit’s Argonaut Building, were once home to General Motors’ design facility.

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Shinola put down roots in Detroit in 2011 to leverage, in equal parts, the city’s well-trained manufacturing workforce and the authenticity and grittiness that the city’s comeback efforts could lend the brand, banking on the fact that the Detroit story would resonate with U.S. and global consumers. Shinola’s return on investment is solid evidence that the strategy was well-conceived: Revenue hit $60 million in 2014, up from $20 million the previous year.

“People want to know the story of your product, and being made in a nondescript factory in Asia is not necessarily a compelling story,” especially for brands based outside of Asia, says Allen Adamson, chairman of the North America region of San Francisco-based global branding agency Landor Associates and author of The Edge: 50 Top Tips from Brands that Lead, Including Apple, Zappos, GE, P&G, and even Justin Bieber. “Being connected to an American story that is real, tangible and important to turn around gives Shinola gravitas and grit. It’s a powerful reason for someone to choose Shinola over another luxury product.”

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Built in Detroit Even the brand’s name has more spunk than a typical luxury-oriented enterprise. When they founded the company, Shinola’s executives set out to build well-made products with a vintage feel that harkened back to America’s manufacturing roots. The company’s founder, Tom Kartsotis, also founder of Plano, Texas-based venture capital firm Bedrock Manufacturing Co., and Shinola’s current CEO, Steve Bock, both have roots in the watch business. Kartsotis founded Fossil Inc. in 1984 and Bock is a former Fossil executive. Kartsotis and Bock wanted to bring Swiss-based watch technology to the U.S., and build a company that also would produce other design-focused products stateside, such as bicycles and journals.

They needed a name worthy of their effort, and they found inspiration “organically,” says Bridget Russo, Shinola’s marketing director. “In a moment of frustration in a meeting, someone said, ‘You don’t know s**t from Shinola,’ and we said, ‘That’s the name.’ ” The saying, popular

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To emphasize craftsmanship and quality, Shinola's watches have serial numbers, and each watch comes with a card stating who made it.

in the 1940s and ’50s, referred to a shoe polish company that was in business from 1907 to 1960.

The company bought the brand name because execs liked its vintage appeal and its nod to America’s manufacturing history, she says. “In the ’50s, America was known for making things, both great design products and products that last.”

Shinola’s execs wanted to appeal to U.S. consumers’ preferences for American-made goods, and to leverage the positive perceptions associated with American-made products worldwide. More than 80% of U.S. consumers are willing to pay more for products labeled “Made in the USA” than those labeled “Made in China,” according to a 2012 study by Boston Consulting Group, and Shinola found that the brand could benefit by localizing the message even more.

Shinola’s marketing team asked participants in a Dallas-based focus group what they would be willing to pay for a pencil that was made in China, the U.S. or Detroit, specifically. “Everyone said they would pay more for the one made in Detroit,” Russo says. “ ‘Made in the USA’ doesn’t have an exact meaning. ‘Built in Detroit’ has a much deeper meaning.”

Shinola set up its headquarters in Detroit’s Argonaut Building, which once was home to General Motors’ design facility, and sold its first watches in 2013, quickly expanding its line of products to bikes and leather goods.

The company also tapped into the Detroit comeback story from the start with its tagline, “Shinola Detroit: Where American is Made.” One of the brand’s first ads, for its Birdy watch, ran just after the city’s bankruptcy filing in 2013 and carried the slogan, “To those who have written off Detroit, we give you the birdy.”

And to highlight the company’s role in helping to put Detroit residents back to work after the recent recession momentarily decimated the auto industry there, Shinola featured its employees in a March 2013 ad campaign by its New Yorkbased advertising agency, Partners & Spade. “It was a celebration of the beauty of manufacturing,” Russo says. “We highlighted people working in our factory, had beautiful factory photography and really made the claim that Detroit would be the next watchmaking capital of America. Telling the stories of all of the various people who touch our brand is important for us. In the fashion

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world, where it’s all about supermodels and celebrities, it’s refreshing for consumers to see who’s making their products, and making that connection.”

A video on Shinola’s website includes shots of employees working in its Detroit factory with the voiceover: “We’re knocking rust off the American supply chain with every chance we get. … This city has shown that the hard things get done when the stakes are higher. We believe in the glory of manufacturing, in a city where we know there’s not just a history, but a future.”

Shinola quickly expanded its retail presence well beyond Detroit, with luxury markets in mind, opening stand-alone stores in Detroit and New York in July 2013, in Minneapolis in June 2014, in Los Angeles in November 2014, and in Chicago and London in December 2014. Its products also are sold in the U.S. in Barneys, Nordstrom, Bloomingdale’s and Nieman Marcus, and online in Austria, Belgium, France, Germany, Italy, the Netherlands and the U.K.

Each retailer that carries Shinola is required to send a representative to visit the brand’s headquarters, where Shinola’s marketing team trains him or her to talk about the brand and the Detroit story. “It starts with getting those merchants and buyers interested, and they carry the story over to their staff,” Russo says. “Some of them thought we were crazy, but as soon as they got here, if they were watch buyers, they said, ‘Let me figure out if I can get a bike into the watch department.’ ” The brand story made them into instant advocates.

Celebrity-led ad campaigns also have engendered brand advocacy. For its 2014 campaign, in an effort to appeal to female audiences, Shinola tapped fashion photographer

Shinola’s Detroit Arrow, the company’s first single-speed bike, is being marketed through simple, uncluttered ads that showcase the bike’s streamlined profile.

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"it WaS reallY a loVe letter to Detroit, anD it HelPeD to DriVe tHe StorY oF tHe BeautY oF Detroit.”

– BriDGet ruSSo, SHinola Bruce Weber to shoot a six-page ad spread for the March 2014 issue of Vogue that featured photos of Detroit-based entertainers, such as 11-yearold rapper Asia Newson and soul singer Melvin Davis, as well as images of Detroit cityscapes and models riding Shinola bicycles down the city’s streets. The ad copy stated: “Detroit is magical. It’s sometimes pretty, sometimes gritty. It’s musical.

It’s uplifting. It’s my city, and I love it.”

In five short films, produced in conjunction with Weber’s photo shoots, on Vogue’s and Shinola’s websites, Detroit-based artists talk about their lives in Detroit and favorite neighborhood haunts. “We started by telling people what was behind our doors, and the Bruce campaign showed them what was outside of our doors,” Russo says. “It was really a love letter to Detroit, and it helped to drive the story of the beauty of Detroit. How many stories do you want to see with abandoned buildings? It was never our intention to show that because that’s old news.”

Shinola runs product-focused ads in The New York Times and The Wall Street Journal, as well

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as local newspaper and outdoor ads in markets where it has stores. “Weirdly enough, one of our most successful media is newspaper,” Russo says.

“We’re a pretty analog company through and through. You keep hearing that ‘print is dead,’ and I don’t think it is. There are certain media that work if you have a compelling message.”

The company also invests in its own content development, although most of it is distributed online. It sponsors guest blogs from Sara Moonves, a fashion editor at Vogue, and it’s developing an online magazine, the Argonite, which will launch as part of Shinola’s website in the fall and will feature work from contributors in the sports, fashion and music worlds, as well as stories about the brand and its products. Shinola’s marketing teams will distribute Argonite stories via e-mail, with the goal of driving traffic to the site.

HoW it’S MaDe “The Detroit piece is an important part of the brand, but it’s not the only part of the brand,”

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Shinola tapped fashion photographer Bruce Weber to shoot a six-page ad spread for Vogue’s March 2014 issue.

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Schultz on marketing strategy

Shinola has installed clocks throughout Detroit as historical, beautiful and functional art, hoping that the clocks also will build a sense of community, Russo says.

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Russo says. “Ultimately, if you have a great story, but you don’t have great products, it’s meaningless.”

Like many higher-end brands, Shinola emphasizes craftsmanship and quality to communicate that its products are worth the heftier price tag. Shinola’s watches have serial numbers, and each watch comes with a card stating who made it. “It goes back to caring for the customers and thinking of them as individuals,” Russo says. “The definition of luxury is changing. Today, meaning is the new luxury.

Products that have a strong story behind them are luxury.”

Shinola positions its brand and its products “at the entry point of luxury,” Russo says. Watches retail from $500 to $1,500, with most priced at around $500, and bikes range from $1,000 to $2,000. The brand’s target customer spans in age from 25 to 65, and is evenly split between men and women, she says. “We’re still attainable for a broader audience. We strive for products that are long-lasting. They look good, and they’re

products you can pass down to your kids.”

Shinola also is participating in the “maker movement,” which supports artisans who make handcrafted, small-batch goods. Shinola’s stores host exhibits and events to offer a platform for American-made goods, and in 2013 and 2014, the company ran a campaign called Makers’ Monday to back the movement. Starting on Cyber Monday—the Monday after Thanksgiving and one of the biggest online shopping days of the year—and running through the end of the holiday shopping season, Shinola’s website ran weekly stories about companies whose products its stores carry, including Syracuse, N.Y.-based Borough Furnace, which makes cast-iron skillets, and Carrboro, N.C.-based Map of Days, which offers leather goods, with links to the companies’ product information. “We said, ‘If you’re going to be shopping anyway, why not buy American?’ ” Russo says. “The response was great, both from a consumer standpoint and from the media, and a few of the makers said that they got sales generated directly from the site. People found it refreshing that we were pushing products other than the ones we produced.”

That focus on craftsmanship, and its celebration regardless of the products’ provenance, lends credibility to the Shinola brand, says Giles Gibbons, founder and CEO

of Good Business, a London-based agency that focuses on social marketing and social change.

“The concept of craftsmanship, and where it’s made and who it’s made by, is now a defining factor of luxury. Being able to say, ‘There’s a powerful story here about real craftsmanship, training people in a difficult area, and regenerating it,’ is a powerful narrative, and it’s all perfect marketing fodder for a sustainable luxury brand. … People want real, authentic luxury brands that are telling a story that they can become part of. It gives people the ability to be the brand ambassador.”

a Well-Told Tale Shinola’s story has helped it garner plenty of earned media, with features in The Economist, The Washington Post and Bloomberg, and on Fox Business and CBS News. Former Pres. Bill Clinton visited the Shinola factory in April 2014 and has mentioned the brand in various speeches. “The media have been very kind to us,” Russo says. “We were lucky that Detroit gained such a global audience and it was very timely.”

Not all press has been kind, however. In its review of the Shinola store in New York’s Tribeca neighborhood, The New York Times said: “Kartsotis is a midprice watch mogul looking to go luxury under the cover of charitable business practices. … There isn’t anything scrappy about Shinola.” Fashion blog Four Pins called Shinola a “misguided white knight,” and said, “Shinola is using [Detroit] as its shill, pushing a manufactured, outdated and unrealistic ideal of America.”

Shinola isn’t bothered by the criticism, Russo says. “We’re walking the talk. You can’t really scoff at 250-plus jobs in four years. The reason we’re in Detroit is about its future. We’re not a little office of people whipping up marketing campaigns and spinning Detroit stuff. We’ve invested in building the watch factory here, in training local workers.

I can understand, from afar, how people could be skeptical, but … ultimately, we’re in Detroit because we believe in the people here, and how supportive they were from the beginning when we were researching different cities and figuring out where to set up shop. It was more about U.S. manufacturing in a city where it would make a difference. It is a good marketing story, but that’s not why we’re here.”

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According to Gibbons, the criticism won’t hurt the brand. “The people who are making that noise are people who would never buy that product anyway.”

Adamson agrees. “Anytime you do something out of the ordinary, like selling watches that most people in Detroit couldn’t afford to ever buy, you’re going to get some flak. You need to dare to be different because if you do something that offends nobody, you’ll be invisible.”

Adds Gabe Karp, partner at Detroit Venture Partners, a venture capital firm that provides funding for startups in Detroit: “If they’re going to exploit an opportunity somewhere, great,

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exploit it in Detroit. It’s great for the community.

There are people working here who have great jobs who probably wouldn’t have them if Shinola weren’t here.”

Criticisms aside, it’s full steam ahead for Shinola, which plans to grow its retail footprint, opening six to eight stores every year, including a Washington, D.C., location that is set to open in July. In a nod to its heritage, Shinola now sells a line of shoe polish, and Russo says that other new products aren’t off the table. “We’re looking at categories that we’re either passionate about, or can manufacture on our own,” she says. “If we can

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“We’re walking the talk. You can’t really scoff at 250-plus jobs in four years,” Russo says. “I can understand, from afar, how people could be skeptical, but … ultimately, we’re in Detroit because we believe in the people here.”

make an amazing toaster in the U.S., we’ll do that next. That’s the kind of brand we are.”

And continuing to spotlight Detroit’s comeback also is part of the plan, she adds. “From the beginning, Detroit has been an amazing partner in this process, from being an encouraging place for us to set up the factory to being a wonderful city to work in. Detroit will always be a part of our story and a part of our DNA.” Playing up its Detroit-based sourcing simply is a strategic differentiator, Adamson says. “The difference between one luxury watch and another is very small, so it’s about finding that difference.

In this case, people know that this product was put together to help turn around an important city in America. Doing good for a city struggling to fight back is probably the best rationale for spending money on yourself. People want stories they can share, and Shinola is serving that up in a powerful way.” m •org For more on Detroit’s attempts at a comeback, check out “Jump-Starting the Motor City,” from the July 2013 issue of Marketing News, available on AMA.org.

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