Reshoring Success Stories: What's Branding Got to Do with It?

By Bill D'Arienzo, Associate Strategy Advisor, U.S. Markets, TEH, Ambrosetti — February 03, 2016

Challenged by fast fashion, prompted by speed to market and buoyed by thoughts of small runs/low inventory levels, reshoring or the return of manufacturing for a company and its brands to its country of origin (COO) has sparked continuing interest in the best strategies for market entry and what it takes to succeed once you are there.

In presenting entry/success formulas, almost all of the pundits on apparel and textile brands have focused on five business factors which they argue should drive consideration and success for those who are thinking of coming home:

  1. Best for niche market brands
  2. Producing for mass customization categories
  3. Pursuing premium price positioning  
  4. Embracing advanced technologies for operational efficiencies
  5. Targeting Millennials & socially conscious consumers
What's missing from the line-up is the role that brands play and how deeply they anchor the five dynamics listed above.

By "brands" we mean something more profound and pervasive than a name or a logo. The brand, especially in the context of re-shoring, is an emotional connecting rod between companies and consumers.  Business success begins when the brand experience is perceived by the target consumer as both highly relevant to the consumer's lifestyle values and highly differentiation from the competitors' positioning. Without both being optimized, the reshoring effort loses its connection with the consumer's feelings and those emotional drivers that generate brand loyalty.

So what is the "brand experience?" It's any of the interactions or touchpoints between consumers and expressions of the brand. These include something as simple as a phone exchange or as challenging as a product exchange. Partly, it is driven by expectations that the consumers have that are provided by the brand managers through communicating the brand's identity and its unique value proposition. 

Marketing and advertising play a role here, as does social media, wherein the community of brand followers contribute  in defining those expectations. Brand identity mixes here with brand image to produce a brand persona, a fictionalized yet extremely meaningful sense of how the brand is perceived in the marketplace such as "elegant," "quirky," and perhaps most important, "authentic." Beyond all other "personality traits," the brand's authenticity is what resonates with the deepest and most resounding consumer commitment manifested in advocacy: recommending the brand to others. This precludes commodity products and those that are driven and defined in terms of their value by the lowest price.

Beyond the "Made in" effect or "country as the brand," what has emerged to underscore the brand experience is the importance of the locale and the facility itself where the product will be produced and the process and purpose for producing it. Adding these four elements to your communications as brand elements provides more avenues for reaching and meeting the emotional wants of key consumers.

So for example, Detroit is heralded in the tagline of the Shinola brand watch and accessories ads and online as "Where American is Made," lavishing praise on the city as the original source of America's manufacturing prowess while speaking of the skillsets of craftsman and artisans who were brought back to create premium products in the inner city. This is a call to both historical heritage and artisanal authenticity.

Chrysler taglines its ads with "America's Import" and later "Imported from Detroit" with a tongue-in-cheek dig at foreign manufacturing.  New Balance speaks with pride about its Depot Street factory building in Boston, erected in 1945, which "...carries a little bit of the long history that is the town and its people." In all of the above, a strong sense of social purpose (e.g. resurrection of dormant artisans, re-employment of inner city technicians, etc.) is proudly mentioned as to why staying in the U.S., which grounds the business, is good business.

While these brands have always been made in the United States, their COO branding strategies go beyond the "Made In" effect and suggest where deeper brand differentiation can be found and developed by reshored brands to win the hearts and loyalties of American consumers. Consequently, COO branding is a necessary pre-condition for re-shoring success but not a sufficient condition for sustaining and optimizing it! Brand narratives need to include more than just "Made in America."

These added elements are extraordinary branding opportunities. The challenge becomes to capture and convey, authentically, the identities and values of these brand elements. Recent research offers some insights in this regard.

In a recent study, the Levi Strauss brand was presented to a randomly drawn sample of denim consumers.  The study sought to answer the question as to the degree of emotional attachment leaning toward propensity to purchase that consumers held when an apparel brand associated with a city with a branded identity and a manufacturing facility with deep roots in that city and with that product brand; in this study, it was San Francisco and a heritage factory built by Levi's in the 1900's. 

Would consumers who were both inclined to purchase the Levi's product and brand be more likely to do so if they thought the product was manufactured in an authentic location (a city with which the brand was identified) and an original facility (a classic brick-and-mortar factory) rather than a different U.S. city and a new factory? 

The answer was: yes.

The research looked into what's known in consumer psychology as "contagion," a well-documented tendency for individuals to believe that objects can acquire and retain the essence or aura of the person or place with which it was originally in contact. This helps to explain the longstanding pattern of people collecting memorabilia once owned by celebrities and a willingness to pay a premium price for the associated item. Think: Venus Williams' tennis racket or a Tiger Woods golf club. 

In the aforementioned study, the contagion effect was explored to determine the degree to which the consumer believed that the essence of the Levi's brand and therefore its authenticity and true value (including the assumption of higher quality) were in the original factory from its original location, each of these elements contributing to the perception that it contained some essence of the brand.  Here, the idea of the brand as a person plays as well into solidifying the perception of the brand as authentic, real, not a phony, so the persona of the brand infused the consumer's perception of the product, i.e., as "the genuine article." 

The conclusion was that the original factory in the origin city produced the product most likely to be more authentic and therefore more likely to be purchased by this consumer cohort. Quoting from the research survey, the data strongly supported the conclusion, that "participants were willing to pay significantly more for the jeans produced in the original factory than the jeans produced in the foreign factory or the newer factory located in the same city." To display the scope of this analysis, the Louis Vuitton brand and its opening price point handbag were also subjected to a similar exploration...the "original" factory in Paris versus a new facility producing the exact same bag in California with the outcome the same as with the Levi's experiment. 

In looking at some actual re-shoring success stories, a consistent pattern of brand strategies emerges. For example, in men's tailored clothing, Brooks Brothers has reshored some 70 percent of its suit manufacturing to the U.S. by purchasing the historic Southwick Factory in Haverhill, Mass., and touting both its history and location. When the factory moved across the street to accommodate the increase in production, they continued to refer to the plant as "Southwick," maintaining the connection between brand, place and facility.

When Men's Wearhouse purchased the Joseph Abboud business and brand in 2013,  the historic factory in Fall River, Mass., came along with it. Place and process authenticity were served by marketing that the Abboud Collection was "Made in the USA" and given a craftsman dimension by including that Abboud himself designed the collections. Among other aspects of the business, the Made to Measure business continues to be very successful as Millennials flock to the brand and its fully authentic brand value proposition.

In accessories, the fabled Kangol headwear brand, won by a host of celebrities, announced in November 2015 that it is bringing the manufacturing of its iconic 504 style back to the USA from China -- and producing it at a factory in PA. Open in 1868,  it is the oldest hat factory in the US. As Kangol's president and CEO has said,  "This is historic time for a historic brand and a historic company. We have a chance to influence and be part of history."

Finally, the niche strategy for specialty markets served best by mass customization has a re-shoring champion in the Boathouse Sports brand. Boathouse was founded in the 1980s by an American Olympic rower athlete for manufacturing performance apparel for rowers. Today Boathouse serves school teams, individuals and professional sports. With a highly skilled workforce, it produces some 96 percent of its 1 million+ technical units each year apparel in Philadelphia, with short product runs and premium pricing, producing most items in 3.5 days from when a cutting ticket is issued. 

This combination of speed to market and niche products  provides an example of the business model that suggests what works best in re-shoring and Made in America, both of which the company president strongly supports. In founder and president John Strotbeck's words, "To manufacture apparel in the U.S. and make a profit you need a niche, a unique audience and a specific skill set … ours is mass customization at its best"— and a brand that has stayed true to its craftsman and American roots.

Proper branding that embraces in its imaging and messaging location, facility, history and social consciousness, coupled with a savvy relevance/differentiation strategy, can make brands more than just marketing plays — they can help to make a reshored business robust and sustainable.

Bill D'Arienzo is associate strategy advisor, U.S. Markets, TEH, for Ambrosetti.


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