3 things restaurant brands better learn from Brandless. Fast.

There’s been a ton of coverage of Amazon over the past few months. First, they bought Wholefoods. Then they announced a meal delivery service almost immediately. While all that was going on, a few articles appeared about a company called Brandless. If you haven’t yet heard about it, the company is founded on several important beliefs which you need to understand if you want to compete today.

1. Everything they sell at Brandless is $3.

It’s simple because customers hate complexity. Everything – everything – on their site today is available for $3. There’s nothing to think about. Handsoap? $3. Coffee K-cups? $3. Mustard? $3.

2. Brandless turned lack of grocery distribution from a weakness into a strength.

This is classic disruption. Knowing that it’s next to impossible to get broad product lines into grocery chains, they instead focused on direct distribution. This not only allows them direct access to their customers – they don’t have to trust grocery staffers to help sell the product or protect the experience – they also realized they didn’t have to account for the retailer mark-up. Hence Point 1.

3. Brandless rendered lack of brand awareness meaningless.

By choosing the name Brandless along with a generic look and feel they’ve risen above the marketing fray. They’ve said we can’t compete against hundred year old brands on their terms, so we’ll fight by diminishing the importance of ‘brands.’

This is a coup. Brandless appeals to younger consumers that are less loyal, especially to legacy brands. It makes of its products certified organic, gluten free, non-GMO, vegan, no added sugar and certified kosher to make sure it is all inclusive. To be fair, this is a well executed gimmick, albeit a clever one. Look for a company like Amazon to purchase Brandless in the next 18 months.

OK. So how does this relate to the restaurant business?

Reduce barriers to purchase.

They are starting with products that reduce barriers to consumption. By making products that cut out sugar, GMO and non-vegan ingredients, they’re making it easier to buy them. They built it this way from scratch, intentionally. Today’s younger consumers don’t start with a baseline expectation that things don’t fit their requirements. They demand products that meet their needs. Especially food. Make it hard to meet their dietary needs and they’re not coming back.

Don’t make consumers think about prices.

Second, they made pricing super simple. In the grocery store, people hate the way stores force them to compare prices. Especially since young consumers are more likely to shop at multiple stores to achieve their regular grocery shopping. Pricing in restaurants it’s not much different. They want it to be obvious that the price is fair for what they’re getting. Can you make everything on your menu $3? Probably not. But could you stand to streamline pricing? Definitely. Make it easy to understand.

Control the experience.

How many times will you read that the experience is all-important to consumers? For most brands, one time too few. Brandless controls every part of the experience. Consumers buy and receive products directly from them. This is an advantage over brands that are at the mercy of retailers to present the brand correctly, or next to a competitor that makes them look favorable. People choose everything from taxis, to musicians and now toilet paper based on the experience. What are you doing to improve the one you offer?

Brandless is currently selling CPG space and coming after established brands. It probably has nothing to do with your business if you are in the restaurant space. One thing we have learned from the digital disruption of the past 15 years is that a successful business model is replicated in every other sector. Soon, someone will launch an unbranded restaurant concept that reduces barriers, offers simple pricing and a controlled, positive experience. Today, you have a chance to pre-empt the success of that concept. Tomorrow? Who knows.

Goodbye Ruby Tuesday?

To use a clichéd musical-themed pun, we could soon be saying goodbye to Ruby Tuesday. The Tennessee-based bar and grill restaurant chain announced this past March that they would be putting themselves up for sale or a potential merger. The unsurprising announcement comes after years of declining sales and location closures for the brand that thrived in the 1990s and early 2000s. Ruby Tuesday has not seen a year of growth since 2011 and approximately 100 locations closed in 2016 alone. The chain had also recently taken to selling certain locations to investors in sale-leaseback deals, foreshadowing the brand’s desperate move to come. More than anything, the sale of Ruby Tuesday signals an end to the reign of the casual dining category of the food industry.

Ruby Tuesday can’t seem to resurrect itself.

Unfortunately for Ruby Tuesday’s executives, the announcement also comes after years of attempts at menu innovation and risky marketing decisions. In 2016, Ruby Tuesday gained a new CMO and re-focused their advertising efforts on targeting families, especially millennial moms; in previous years, the brand had tried to do away with their focus on the family and move to a more adults-only aesthetic, even going as far as to remove diaper-changing stations from restaurant bathrooms. This attempt at brand revitalization resulted in removing advertising dollars from television completely, choosing instead to focus on paid social advertising and online video with Hulu and YouTube.

The nontraditional move was risky but allowed the struggling restaurant chain to geo-target their advertising to areas surrounding their locations, specifically reach their chosen audience and tell more emotional visual stories than a mere 30-second television spot could ever allow. 2016 also saw Ruby Tuesday honing in on their Garden Bar, a self-service salad bar, in advertising. There was an introduction of new, fresh Garden Bar ingredients, better to serve the moms the brand desperately wanted to appease. For all of their risk, it seems that the brand’s moves did not result in much reward.

Ruby Tuesday’s attempt to reinvent themselves is a great example of marketing trial and error, but it also signals trouble for the casual dining industry as a whole. Similar restaurant chains like Olive Garden and Applebee’s are struggling as well, though those brands have not made such brazen attempts at menu and marketing changes like Ruby Tuesday. Both still favor a heavily TV-focused media rotation, insisting that inundating consumers’ screens will work in their favor, and rely on limited time offers and slashed prices in order to attempt to make a splash in a dining landscape that currently favors fast casual restaurants and healthy food trends.

You wouldn’t exactly go to Olive Garden and eat their bottomless breadsticks if you were looking for a healthy place to eat out with your family, but a “two entrees for the price of one” deal can only do so much to convince you otherwise.

How casual dining can survive a changing industry.

So, were Ruby Tuesday’s last-ditch attempts to make a profit worthwhile? Yes and no. The re-focus on family dining and adding new ingredients to the Garden Bar menu prove that the brand wasn’t willing to go down without a fight.

The move away from traditional advertising and increased efforts in paid social advertising were innovative and forward-thinking, particularly because TV commercials are a familiar and effective way for brands to reach a wider audience and straying from that tried-and-true model will always be perilous. However, those risks might also have contributed to the chain’s demise. Other casual dining restaurant chains have stayed the course, choosing to put the majority of their ad dollars in television and not make drastic changes to their menus.

Those chains are still open for business, though they might soon follow in Ruby Tuesday’s worn footsteps. In February 2017, Applebee’s posted their sixth straight negative sales quarter and in March their CEO was ousted. Bloomin’ Brands, which owns casual dining chains Outback Steakhouse and Carrabba’s Grill, recently announced plans to close 43 locations after a rough 2016. Though brand reinvention wasn’t to be for Ruby Tuesday, perhaps other troubled chains could take a few notes from their demise and, at the very least, go down swinging

Coke vs. Pepsi: A very commercial rivalry

Pepsi’s recent controversial commercial may be off the air, but the bad taste it left in consumers’ mouths still lingers.

In early April 2017, Pepsi, the giant soda company, released an ad targeted to millennials that portrayed the era’s protest culture and aimed at the idea that Pepsi could bring everyone, despite their differences, together. What was meant to be a lighthearted ad about unity and peace was slammed by ad executives, TV pundits, and most importantly, the internet, as out of touch and completely tone-deaf. The company was accused of trivializing important causes like Black Lives Matter as a way of selling more soda. Within 24 hours of the commercial’s initial release, the company pulled the commercial from the airwaves and released an apologetic statement condemning their own ad. In an ironic twist, the shared hatred of the ad brought diverse groups of people together, though it didn’t help Pepsi’s sales. The brands stocks plummeted in the aftermath of the controversy. While the conversation Pepsi was attempting to start is a noble one, the execution of the ad failed it miserably.

The protest portrayed in the ad was generic, the decision to cast model and reality TV star Kendall Jenner as the leader of said protest was off-putting, and, perhaps worst of all, the idea that a can of soda could end a violent protest and unite protesters with police is laughable. If Pepsi’s goal was to get people talking about their product, they succeeded (sort of) – the YouTube video of the commercial amassed 1.6 million views in the first day and memes of the ad started almost immediately, and continued for weeks after. Saturday Night Live spoofed the ad in a scathing parody that very week. People were certainly talking about Pepsi, though not for the reasons they had initially hoped.

Can a can of soda change the world?

Coke vs. Pepsi: The rivalry continues

Pepsi’s big fumble brought to mind a similarly idyllic ad that rival soda brand Coca Cola produced in 1971, the famous “Hilltop” commercial. More than 40 years after its debut, people are still talking about “Hilltop”, and for good reasons. The ad was referenced in the finale of the AMC show Mad Men and it consistently makes the cut on lists of the best commercials ever made. Coke even remastered the original footage and re-released the commercial in 2016. The theme of the ad is similar to Pepsi’s attempt; it features a crowd of diverse people gathered together on a bucolic hillside with bottles of Coca Cola singing “I’d Like to Buy the World a Coke”. So why is Coke’s unity ad considered iconic while Pepsi’s was immediately reviled? The simple answer: execution.

Instead of using a bottle of Coke to bring people together in a big event, a diverse group of people simply gathered together to share their differences and commiserate over soda. Coke wasn’t the stimulus for the unity displayed in the commercial, people were. Coke’s ad is about people coming together in peace and harmony as a way to sell soda, not the other way around. That thought, combined with a catchy song, is what makes the commercial iconic.

Can soda change the cultural landscape?

Brands should use caution when tiptoeing the line between social commentary and social activism. Forward thinking brands are rewarded for taking a stand when consumers sense it is authentic. But companies are punished when people detect commerce behind the public social message. Things are not as simple as they were in 1971.

It could be argued that the success of Coca Cola’s ad in 1971 and the failure of Pepsi’s ad in 2017 is a difference in eras. In 1971, the Vietnam War was in full swing, with anti-war and women’s rights protests arising all over the country. It was a turbulent time that “Hilltop” was attempting to pacify. 2017 has seen a resurgence of social movements and terror attacks have launched a new era of global turbulence, something Pepsi wished to capitalize on with their Kendall Jenner-starring ad. What Pepsi failed to recognize is that, no matter the year, a can of soda can’t change the world.

commercial, Pepsi
The not-so-memorable Kendall Jenner commercial from Pepsi.