Michaels has been a mainstay retailer in the hobby, crafting and décor space for half a century, but it is in the middle of its own DIY redo. At our August Brand Insider Summit, CMO Amanda Rassi explored the company’s major rebranding effort to future-proof against a brand blindness in the category dominated by discount promotions and couponing. With over 1300 stores, this entails a lot of change and redesign work. But we were so impressed by the ways in which Mandy and her team meticulously thought through every bit of detail and trim of this makeover we wanted to spend more time digging into her thinking behind it all. You can listen to the entire podcast at this link.
MediaPost: Now that the pandemic-induced burst of craft and hobby interest has ebbed, people are back out of the house and wallets are tightening, what are your consumers’ spending habits like now?
Amanda Rassi: In 2020, and even 2021, there was that crafting boom right as people were at home and it was a good opportunity for people to learn new things. And frankly -- bored kids at home -- creative projects are a great way to keep them entertained. But we also heard a lot of people who went back to creative pursuits that they may have had before maybe life got so busy before they started working full time or had kids. And I think in the pause that the COVID time offered many people, they were actually able to get back to some of these creative pursuits and remembered what they loved about them. It has been interesting, as we've cycled out into this next phase because people are back to life, particularly people with kids in the household is where we've seen some customer trends of people not crafting as much as they did during the pandemic or exiting the category even altogether.
And it is a discretionary category. So, you're exactly right. As the economy started to turn, stimulus ran out, we are in a category that you don't have to buy for most people. I came from the land of grocery shopping. Yes, the category will grow and shrink, but you aren't in the most essential of needs. People are going to go to the grocery store. You don't have to go to the craft store. As we have looked at where the consumer is now, you do have those core people with their creative pursuits through thick and thin. But then you had a lot of people who came in and aren’t making as much, or this is falling off the radar screen. We really have to do a two-prong job. One is, give people a reason to engage with our category. And have a point of view about creativity, why it matters, how it can fit into your life. But then it is also a share game. There is still a huge pool of creative needs that are out there. What we're trying to do with Michaels right now is to make sure we are the most top of mind place for anyone who has a creative need, whether they're a beginner, or they're a pro, across demographics, if there's something that you want to do in the creative realm, we want Michaels to be the sort of top choice for you to get that need met.
MP: Let's just hit on some of the key aspects of the rebrand in terms of messaging, look, and feel.
Rassi: We started with our strategy. We really got grounded. We changed our purpose. Our new purpose is to fuel the joy of creativity. We started by thinking about the business we're in, which obviously we've been in the Arts and Crafts category since our beginning, 50 years ago. But with where the consumer is now, we need to serve not just people who are makers like arts and crafts, people making things with their hands, but all creative people. For example, a lot of our business is things you might decorate your home with. So right now, Halloween is huge. The December holidays will be another big moment for us. And our prior approach focused on what we call the makers, which was just one subset of creative people. We started by getting really clear on who we want to serve, what's the business that we want to be in, and then really mining the business context, the consumer context, and the DNA of this brand to define our points of distinction. Then that really led us to the campaign.
Our campaign is really about bringing your ideas to “I did it.” Anytime someone has a creative idea, we want Michaels to be the partner to help them make it a reality.
And we're telling more stories. So yes, it continues to be the making, and the hands-on creative projects. But we have a big custom frame business. So, one of our launch spots is all about custom framing. Another one is about Halloween and decking out the most spooky house on the block. Which are all expressions of creativity.
In terms of the look, we looked at our category, and it had become a sea of sameness. [It was] very discount focused, tons of coupons and 50% off this. A lot of the offers that we run are very similar to the ones our competitors run and have had for a long time. And as we talked to customers, we found that they sometimes couldn't tell our ads apart from our competitors, if you pulled the branding off. They will say, I love Michaels, which is the fun thing of being in a creative category. But then, as soon as you ask why, you'll get 35 different answers. Which indicates that we have an opportunity to sharpen our point of view and make sure that customers who are seeing Michaels stand out and frankly attribute our ads to us, not to our competitors.
And we worked with our agency, and they came up with a design system that, I think is doing a ton of the heavy lifting on this. It is very pop art, very bright, colorful, it sort of dovetails off our purpose, which is all rooted in joy. It's a very joyful look to the brand. And we made our products into works of art. There's this beautiful macro photography. Imagine one of my favorites is like, you're looking at a canvas with paint, and the paint is dripping down in this multicolored view or zooming in on a spool of yarn or something that's been knitted where you can see all of the texture and the color. That really brings more creativity back to the way that we're showing our products. Also, we need to do coupons, but why can't we make them look a lot more interesting? We also have a distinctive font that helps even in some of those very performance-oriented things like a coupon or an email that's talking about the promotions this week. By having a distinctive design system, the font choices that we're making, the brand tone of voice. All of that now becomes part of a branded ecosystem, even if it's doing a very blocking and tackling short term sales kind of objective.
MP: Let's talk about KPIs a little bit - how you're going to measure success. Since differentiation is going to be a key part here, are there particular indicators you will look for?
Rassi: We have multi-level measurements. One is, we do have a brand tracker, more consumer claim data but trended over a long period of time and distinctively is one thing that we ask about. Does this stand out from the category? We have some specific measures there, as well as some of the core things we want our brand to stand for that we’ll track progress on from a consumer’s sentiment point of view. We also look at our media metrics. There are some things we can look at daily or weekly, things like ad recall, looking at engagement rates, even some of our more tactical stuff on social. Just looking at it like, are we getting better engagement when we're presenting it in a more creative way? We have a whole scorecard of things that we look at like that every Monday. And then we have some longer burn things. We still do a monthly marketing mix which is a great source of truth for us. We have it trended over a long period of time, so we can get to creative effectiveness as a breakout of the measures in there as well. But ultimately, we are in retail, so it can't be beautiful branding just for the sake of it. We are really looking at the customer health of our business and making sure we are attracting new people, that we're retaining more of our customers, that we're getting them to engage with us more deeply. Something like taking classes or coming to events that they haven't done before or joining our loyalty program. We have a few different things that we're looking at but ultimately the work has to perform.