"Whenever I go into a restaurant, I order both a chicken and an egg to see which comes first"

Friday, May 31, 2013

The American Brand And How It Is Irresistible

David Brooks has written in the New York Times (5.31.13) about the allure and power of American product brands.  No one can name any Chinese brands, he notes, but iconic images of Nike, Apple, McDonalds, and a hundred more American products are immediately recognizable and remembered around the world. Our ability to create such powerful brands is rooted in American capitalism – a blend of personal ambitions and visions, a strong countercultural tradition out of which commercial trends emerge, and a highly competitive consumer marketplace in which buyers are always looking for the next new thing.

The Chinese, on the other hand, have no similar models. 

Brand managers who’ve worked in China say their executives tend to see business deals in transactional, not in relationship terms. As you’d expect in a country that has recently emerged from poverty, where competition is fierce, where margins are thin, where corruption is prevalent and trust is low, the executives there are more likely to take a short-term view of their exchanges.

Another reason not mentioned by Brooks may be the retail export market itself. According to Trading Economics China’s major exports are: electromechanical products (57 percent of total exports) and labor-intensive products like clothing, textiles, footwear, furniture, plastic products, bags and toys (20 percent).  It is hard to recall a Chinese brand of clothing, for example, because the country simply produces the shirts and pants which are then finished and marketed by Gap and other well-known American companies.  Similarly toys produced in China then go on the shelves of Kids R Us under the Mattel brand.

China has tried to develop a brand-centered retail export market for years, but it has not succeeded.  It is not hard to see that these labor-intensive industries are critical for the employment of China’s millions of workers and that brand corporations are wealth-producing but for shareholders, not employees. Of course with China’s still untapped resources of talent, enterprise, and ambition, the country could easily reconfigure at least a part of its economy to create a great new brand of international renown, but give the persistence of central planning and a continually robust economy, it is unlikely to divert its attention away from the current labor-intensive model.

Even if China decides to go the way of the big brand, it will not only be competing with individual American brands, but the American brand itself.  America is still the land of dreams and fantasy for much of the world.  Although Old Europe eschews American commercialism and pop culture, millions in Asia and Africa see the United States as Hollywood, Las Vegas, and New York all rolled into one.  French think films are seen by a very few, and France is perennially pumping money into cinema that no one except a few Left Bank intellectuals care about.  It is the big blockbusters and their stars which draw the crowds.  Who can compete with the works of just one director like James Cameron whose Avatar, Alien, Gladiator and others combine Hollywood myth with technology pizazz and star power?

All America is like its films, think the hundreds of millions who would like to come here - a happy conflation of our diverse and exciting popular culture.  In this vision ordinary Americans are not much different from the heroic adventurers of the screen.  Sexy women and handsome men are all over California, chiseled cowboys throughout the West, greedy but alluring New York capitalists live in Park Avenue luxury, have three yachts, ski in Gstaad, and squire a different lady every night.  It is the magical power of American branding and marketing that the world thinks we all are like this. The Apple brand and the 3D interactive, highly visual software in Avatar become one and the same.  Big, powerful SUVs – Suburbans, Yukons, and Expeditions – are on our roads, in the movies, and in the minds of the African or Asian viewer the very symbol of American muscularity and power.  We can’t lose.  The American brand provides the institutional umbrella under which all individual brands are formed and exist.

Brooks comments that a very productive source of new retail ideas comes from current counterculture.  Fads, fashions, and trends have come at one time or another from hippies, the ghetto, San Francisco hipsters, Seattle grunge, and the Mafia.  But what if we run out of ideas?

The biggest threat to the creativity of American retail may be that we may have run out of countercultures to co-opt. We may have run out of anti-capitalist ethoses to give products a patina of cool. We may be raising a generation with few qualms about commerce, and this could make them less commercially creative.

I doubt it.  We are endlessly inventive and creative.  It is not only the counterculture from which come super brands.  Take Pabst Blue Ribbon, for example.  A no-taste, cheap, working man’s beer in its time, coopted by hipsters, renamed PBR, and made an icon of cool. Retro fashions are always in style, and designers are taking even the dorkiest Seventies double-knit and accessorizing it with style and 21st century verve.

Crowdsourcing, social media, and the incredibly dynamic exchange of ideas will continue to be an eternal fountain of innovation.  It will no longer be a few trend-setters cruising the Mission or Detroit for cool new fashions.  It will be millions of young people sharing crazy photos of themselves on Facebook, going viral on YouTube, and going commercial.

No, Mr. Brooks.  You don’t need to worry. We will continue to produce fashion, movies, food, and music that the French hate and everybody else loves.

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