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Tuesday, March 2, 2010

Being Stupid: Diesel in 2010

Diesel's recent ad campaign "Be Stupid" has inspired pretty interesting discussion amongst some of my friends. I'll lay out my  hypothesis right here: a great and controversial ad campaign cannot fix a brand when its other components need serious help - especially in fashion.

The ads do what they're supposed to - alledgedly. They get people talking, right? The brand is getting more attention. But Diesel can't manage to translate that attention into sales or even visits to its wesbite. I did a quick comparison to two other companies - Polo and Gucci - based on the fact that all three are global brands with significant ad spend, editorial coverage, and all three have e-tail components to their website. As you can see below, Diesel has had almost no change in traffic over the last year, not even around Christmas, when the other two sites peaked.

So this illustrates the campaign not converting eyes into site visits, but that's only a tiny piece of the picture. Diesel had executing some amazing promotions in the last several years, notably their 30th Birthday which involved parties all around the world culminating in a huge party in Brooklyn with performances on the scale of the VMA's. And while those events brought in celebs and press...very few of those "influencers" were wearing Diesel.

I believe Diesel has lost its core customer for good, and needs to replace it with a new one - but may be poorly positioned to do so. A little history may shed some light on the brand issues:

Around the turn of the millenium, Diesel stood for premium denim. It was THE premium denim company until Seven came along to fight it for the crown. Most of the people who wore Diesel jeans - at least the ones I knew from home and college - wore them because they signaled a certain cache. Or their mothers had bought them, a purchase which was even MORE predicated on that cache, because those mothers wanted their sons to be seen in the most expensive jeans they could buy.

That works for a while, the economy takes off, new denim brands emerge, and Diesel gets huge. More company-owned stores, expansion into more points of sale, Diesel becomes ubiquitous - everything from Barney's to Urban Outfitters to Macy's. Diesel's price point starts climing and I think at one point a pair was almost $190. The Diesel Style Lab line closes and opens and closes again. The umbrella company that owns Diesel also starts buying up other labels - Margiela, Dsquared, and Victor & Rolf. Diesel Stores are opening everywhere. Then a lot of the points of sale start disappearing and stores stop carrying the brand - bringing us to now, when Diesel is mostly distributed through Diesel stores and the department stores that had made it a core offering like Bloomingdales, with little-to-no specialtiy retail support.

Diesel also launched a "premium" Black Gold label designed by Sophia Kokosalaki, and also has a hotel, a furniture line, and other ancillary products you most likely didn't know about.

Diesel was stupid and overdid it like so many brands before them, going from coveted to overexposed. But there's more. In the men's market, buyers looking for visible brands gravitated to Seven, True Religion and Rock & Republic (barf) while conisseurs moved towards premium labels that provide superior quality - Nudie and PRPS probably being the most successful examples. The women's market, which is much more fashion-driven, has gone through many more iterations of the it jeans - going from Seven to Citizens to J Brand to Current/Elliott and who knows what will come next. In a really telling move, Barney's stopped selling women's Diesel and moved men's out of Co-op (its biggest denim point of sale) and onto what I call the "Dad floor."

When Diesel stopped being about denim customers and started being about Diesel customers, they abandoned thier chance to sustain the same kind of growth that they had been enjoying. I would guess that the typical Diesel customer looks something like this:

(Photo courtesty of MTV)

Only problem is, they're already loyal to a gentleman named Ed Hardy.

Diesel wanted to move from being a denim brand to a lifestyle brand and it did that - and lost a lot of brand value along the way. THAT was stupid. The brand now finds itself needing to grow its share among the douchey, competing for dollars against spray-on tan and Dep. As much as I love their events, Diesel needs to stop wasting money courting hipsters who are going to go buy selvedge and start promoting events at Seaside Heights and Lake Havasu.

No amount of great advertising is going to win back your old customers.

Then again, maybe I should take some of Diesel's advice:

And a few post-scripts:
1. I didn't really make it clear but my point is that a brand that tries to double its price over 4-5 years (99-2004) with no clear improvement in the product and declining perceived value among its core customers is going to lose ground that can't be made up by ads, no matter how good they are.

2. If you want to know what jeans I lust after these days - feel free to buy me a pair of these

3. To read more about Diesel's branding drama click here

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Marketer, writer, overthinker, New Yorker, semi-formal observer