Shinola's Detroit story a successful sell
ALEXIA
ELEJALDE-RUIZ, CHICAGO TRIBUNE
12 HOURS AGO
Devin Kaltenbach hasn't worn a watch in 10 years.
But the 31-year-old Michigan native recently found
himself in Chicago's Shinola boutique, wearing a baseball cap that shouted
"Detroit" across the front, buying a timepiece designed to tell a
story as much as the time of day.
"Welcome to the family, man," a store associate
said as he tucked the $600 watch into a cedar box alongside a tub of balm for oiling
the leather strap.
The Shinola family has been growing swiftly since the
company's founding four years ago, propelled by the drumbeat of its Detroit
pride and made-in-America ethos, a striking example of the power of savvy
storytelling.
The details of its story have caused some backlash —
namely, that most of its products are not actually made in Detroit but
assembled there using parts mostly made in America and some from Asia. And that
the idea for the luxury brand, out of reach for many in the poverty-stricken
city, was the brainchild of a Texas entrepreneur who partnered with a Swiss
provider of watch parts for the quartz movements.
Despite the footnotes, the heart of the lush tale Shinola
has woven about the hardscrabble city rising from the ashes has gained a
devoted following.
"The underdog nature (of the story) makes people
pull for it," said Mick McCabe, chief strategy officer at ad agency Leo
Burnett.
Kaltenbach, whose cellphone long ago made watch-wearing
anything but a necessity, said Shinola's story was compelling enough to make an
investment he otherwise might have skipped.
"I like to support Detroit, especially because
everyone hates on it," said Kaltenbach, who grew up in Lansing, Mich., and
now lives in Chicago's Ukrainian Village neighborhood.
"You're buying into something as opposed to just
buying a tangible product," said Keith Black, store manager at Shinola's
Chicago shop, a den of leather and wood that opened in late November at 1619 N.
Damen Ave.
Storytelling has been an integral part of branding for
decades. What's notable about Detroit-based Shinola is that the story it is
telling — a "living" narrative about working people in a struggling
city rather than the mythology of luxury brands — has resonated so deeply, said
Ken Nisch, chairman of JGA, a retail design and branding firm headquartered in
Michigan.
Shinola belongs to what Nisch calls the "new
luxury" concept, alongside resurgent heritage brands such as Carhartt and
Allen Edmonds, which despite their premium price points, have an appealing
anti-status undercurrent.
"I think this (millennial) generation watched the
news of the factories closing and have sort of built a reaction against things
that they believe are inauthentic or that take away the dignity of the people
that make things," Nisch said. "Shinola fits very well into that
psychology."
The 4-year-old company's watches, bicycles, leather
goods, journals, pet accessories and a broadening array of other products
generated $80 million in revenue during its first 18 months after production
started in mid-2013.
Shinola has opened seven brand stores, including one in
London, and aims to open five to six more annually, marketing director Bridget
Russo said. It sold 170,000 watches last year, triple the number from the year
before. Its plant has the capacity to assemble 500,000 watches annually.
The wind at its back is its story of making Detroit, a
city some left for dead, as "the new watchmaking capital of America,"
reviving an industry that hasn't existed at scale in the U.S. for 40 years.
Shinola employs more than 350 people with nearly 300
based in Detroit. More than 150 of them work designing leather goods,
constructing leather watch straps, assembling watches or manufacturing watch
dials in a new factory inside the Detroit flagship store, so shoppers can see
how it's done.
The company grounds its brand in the faces and processes
that create its products, tapping into the same cultural zeitgeist that has
fueled the rise of craft beer and food trucks. Ads feature its Detroit workers
as models. Videos demonstrate the tanning of leather at Chicago's Horween
Leather Co. or stitching of watch straps at a Florida factory.
Its "craftspeople" aren't the only stars.
Shinola had famed photographer Bruce Weber shoot a series of portraits
capturing Detroit life. In a video to promote its $1,500 Black Blizzard
titanium wristwatch, which was "inspired by the Dust Bowl of the 1930s and
the homesteaders who weathered the storm," vintage footage and audio from
the era show farmers toiling in windy fields, a metaphor for overcoming
adversity.
That it can tell the story across digital platforms is
"so much more immersive and intimate and participatory, richer and more
textured and two-way in its emphasis," McCabe said.
"All of it is about differentiation," said Tim
Calkins, clinical professor of marketing at Northwestern University's Kellogg
School of Management. "Shinola isn't selling products that are
fundamentally different. The products are nice but not remarkable. The thing
that makes them remarkable is their story."
A well-crafted story, often with a social mission, is
behind the appeal of many brands targeting young consumers.
At Chicago-based BucketFeet, which recently scored $7.5
million in funding to help it expand, highlighting the background of the
artists behind each shoe's whimsical design is what makes it coveted by
shoppers who have many shoe-buying options.
"People sort of equate high-end things with value
because they're exclusive, only certain people can afford them," said CEO
Raaja Nemani. "I think we give people that same feeling of very
significant value in our products because there is that deeper story
there."
At Toms, which last fall opened its first Chicago store a
few doors down from Shinola, the shoe brand's one-for-one giving mission was
"the biggest focus of our training," said Erik Larkin, an event
planner and employee at the shop.
To be sure, "some people just need a wedge for
tonight," Larkin said, but Toms is selling an identity.
Inside Toms coffee shop, where customers can sip on
Toms-branded coffee — buy a bag and they give clean water for a week to someone
in need — a newsletter exhorts people to join the "global discoverist
movement," which Toms explains like this: "We're a varied bunch of
explorers,
adventurers, do-gooders, concerned citizens, wayward travelers,
curiosity seekers and philanthropists.
If you're reading this, you likely are
too."
Similarly, the brand masters at Shinola "understand
the power that brands say something about you," Calkins said. As the
poster child of Detroit's renaissance, "Shinola is a brand people are
happy to wear, to show off, to talk about."
And because not everyone who aspires to reflect its
values can afford its watches ($475 to $1,500) or its bikes ($1,950 to $2,950),
Shinola sells small tokens. A leather toothpick holder costs $6.
Shinola has gotten heat for so heavily marketing Detroit
when its leadership parachuted in from outside and most of its products are
made elsewhere before assembly.
The company that spawned it is Texas-based Bedrock
Manufacturing, a venture capital firm helmed by Tom Kartsotis, founder and
former CEO of the accessories brand Fossil.
Kartsotis was interested in reviving American-made
watches. Detroit was chosen as the home base because of its manufacturing
history and rich talent base, Russo said.
In a now-famous story, the company commissioned a focus
group and asked if people preferred a $5 pen from China, a $10 pen made in the
USA or a $15 pen made in Detroit and discovered people were willing to pay the
higher premium for one made in Detroit.
The name Shinola caught on during conference room banter,
inspired by the World War I-era colloquialism, "You don't know (blank)
from Shinola," which refers to an old shoe polish brand whose color bore a
certain resemblance. In a nod to the heritage, Shinola sells shoe polish, made
in Chicago by C.A. Zoes Manufacturing.
Bedrock also owns Filson, a strong heritage brand making
rugged luggage and apparel in Seattle for more than a century.
Shinola — which is headquartered on the fifth floor of
Detroit's College of Creative Studies, a building that used to be a General
Motors research lab — says it is transparent.
"We don't claim to be born and raised here (in
Detroit)," said Russo. "But we do genuinely want to be a part of its
future and success story and shine a light on the city."
The FAQ page on Shinola's website lists the provenance of
its wares — canvas from New Jersey, wheels from California, bike frames from
Wisconsin, shoe care tins from China.
Still, Shinola's story rings hollow to some.
Zak Pashak, president of Detroit Bikes, calls Shinola
"a really good marketing company" but is frustrated that its
"Built in Detroit" mantra can mislead people to believe it
manufactures bikes in the city.
"It's infuriating in some regards because I have put
the time and money into walking the walk," said Pashak, a Canadian
transplant who invested $2.5 million to build a 50,000-square-foot Detroit
factory where former car engineers manufacture steel bike frames.
Even so, he said, Shinola's popular brand story is good
for the city and his business.
"If its brand is that stuff from Detroit is
cool," Pashak said, "then that's great for everyone in Detroit."
Jim Devine, 43, a Michigan native who stopped into the
Chicago store recently to buy a watch as a gift for his best man at his
wedding, said the company's origin story drove his purchase.
"I'd probably look at that watch differently if it
wasn't made in Detroit," he said.
Brothers Alejandro and Daniel Ramirez were drawn into the
store by their efforts to buy more U.S.-made products.
"I think we're really aware of the fact that part of
it is marketing, but we'll take it," said Alejandro Ramirez, 32.
Nisch, from brand consulting firm JGA, said most
consumers "give Shinola credit for trying."
"I think authenticity isn't an exact science,"
Nisch said. "In this case it's more heart than brain. It's kind of made
up. But I don't think you have to cross all the T's."
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