by Matthew Fisher & Blodwen Tarter

Shinola: What’s for a Brand Linked to ’s Manufacturing Heritage?

Martin Digger had recently applied for a job at , the Detroit-based company that manufactures consumer products ranging from to bicycles. He was excited about the possibility of returning to his hometown to use his new marketing degree as a brand assistant. To prepare for his interview, he walked to the closest coffee shop, ordered an extra-large coffee, and opened his laptop to review the history of the firm and Shinola’s products. He was glad to see that the articles overwhelmingly praised the company.

According to the Shinola website,

Of all the things we make, the return of manufacturing jobs might just be the thing we’re most proud of. Shinola is founded in the belief that products should be well-made and built to last. Across a growing number of categories, Shinola stands for skill at scale, the preservation of craft, and the beauty of industry.1

Those values resonated with Martin and his hopes for both Detroit and his own work.

However, Martin paused when he came across one article that was critical of the firm.

Shinola’s entire presence is predicated on its ties to the City of Detroit. The justification for the cheapest men’s being $550? For bicycles that cost a minimum of $1,950? American manufacturing costs more. Quality materials cost more. American products are inherently worth more. Like buying a pair of Toms helps some poor Third World kid, by buying a two thousand dollar bike you’re doing your part to help rebuild a fallen American city. In this way, Shinola reminds us what the American dream actually is: a selling point, nothing more than a sales pitch. … Shinola is using my city as its shill, pushing a manufactured, outdated and unrealistic ideal of America.2

Martin was proud to have grown up in Detroit. Detroit residents remained resilient in spite of the city’s reputation as the epitome of the decline of American manufacturing and crushing poverty after so many auto manufacturers closed their Detroit factories and moved elsewhere. Martin was reflecting on the challenges facing Detroit and doing business there when he heard his name called.

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Hannah Rent, a friend from high school, was pleased that Martin was back home. She was even more excited that Martin was interviewing with Shinola. Hannah worked for a local marketing agency and was quite familiar with the brand. Before Martin could say anything more, Hannah pulled out a folder and showed him Shinola’s first advertisement (see Exhibit 2). She said “Check out the classic design of this watch and the picture of the Argonaut building. Isn’t that a great use of a Detroit landmark building to tie the brand to Detroit?” She added, “I really like Shinola’s story. I also use this ad to show to clients the power of branding both heritage and place.” (see Exhibit 6).

Shinola’s initial marketing campaign focused on the individuals who assemble its watches, suggesting that purchasing the watch supports jobs and the rebirth of Detroit, thereby emphasizing a social dimension that differentiates the firm. Consumers are not simply buying a timepiece; they are supporting both the revitalization of a city and of American manufacturing. More than 500 employees work for the company, of which almost 400 are located in Detroit.3 At least one investor had been convinced of the Shinola story and its value, as Revolution Growth Fund invested a reported $25 million in Shinola’s parent company, Bedrock Manufacturing.4

Martin asked, “How does leveraging the connection to Detroit have anything to do with premium priced watches? Hey, I love Detroit but the city isn’t exactly known for making watches. Cars, yes-- but watches? I mean, I studied important brands that have been around for years and how they leveraged their heritage to tell a brand story, but how can Shinola, a new firm, do this? After reading some of these articles, I wonder whether Shinola is exploiting the city of Detroit. Is it really a partner in the city’s so-called rebirth? Can it pull off this whole approach? Can it really be an authentic brand?”

Hannah and Martin settled in for a longer discussion about Shinola and its connection to Detroit. Where did the company, the Shinola brand, and the image of Detroit intersect? Were they compatible and “true” or simply a fake marketing ploy? Martin wanted to be certain that he could fully engage with the brand and the company with which he was about to interview.

The Detroit Heritage: Car Manufacturing and World War II

Detroit is close to Canada, located between two of the Great Lakes (see Exhibit 1). It flourished in the early days of U.S. automobile manufacturing. With the onset of World War II, the scope and scale of Detroit’s manufacturing ramped up to support the war effort.

Carmakers built everything: tanks, airplanes, radar units, field kitchens, amphibious vehicles, jeeps, bombsights, and bullets. ... Detroit, with 2 percent of the population, made 10 percent of the tools for war.5

Manufacturing employment peaked in the 1950s at roughly 300,000 people, along with a population of 1.86 million residents.6 Detroit represented the ideal of American manufacturing and prosperity throughout the first half of the twentieth century.

Detroit’s Decades of Decline

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A slow erosion of population, employers, and consequent increases in unemployment marked the years that followed the peak in 1950. Riots and civil disturbances, often exacerbated by racial tensions, contributed to Detroit’s image as a city in decline.7 Several economic and marketing revitalization attempts marked the next two decades, including a famous 1970s slogan of “Say Nice Things About Detroit,” that attempted to reverse the negative press about the city.8

By 2013, the city was home to only two car assembly plants.9 As residents continued to move to the surrounding suburbs, the city’s population dwindled to just under 685,000.10 Blighted properties numbered over 84,000.11 As the cost of maintaining an aging infrastructure increased, the declining population and tax base doomed city finances.

On July 18, 2013, the city of Detroit filed for bankruptcy. In this once thriving city full of middle class jobs and social mobility, a third of the population lived in poverty12 and the unemployment rate stood at 22.1%, when the national rate was just 7.4%.13

Resurgence of the City = Tough, Cool, Resilient

The bankruptcy filing catalyzed the Detroit community, the state of , creditors and foundations across the nation. A tremendous collaborative effort, “the grand bargain,” pulled the city out of bankruptcy some sixteen months after the filing. “Reinventing Detroit” had begun.14 Marketers jumped on the bandwagon of hope and determination. As The Guardian newspaper reported, “to an advertiser's eye, Detroit is cool. Gritty. Tough. Resilient. Authentic in its struggle. True in its American spirit of hard, honest work, ruins and all.”15

Shinola Emerges

Tom Kartsotis founded Fossil in 1984 and built the firm into the world’s fourth largest watch company. After leaving active management of Fossil, he started another watch company in 2011.16 A Texas native with no prior connection to Detroit, Kartsotis understood the value in associating a brand with a place. Sensing opportunity, he selected Detroit as the city for the new company and resurrected the Shinola brand for a new purpose. While the original brand had no connection to Detroit, the long-defunct Shinola shoe polish (see Exhibit 7) was popular when the city mobilized to help win World War II.

In 2012, Kartsotis signed a lease for 30,000 square feet in Detroit’s Argonaut building (see Exhibit 5). Historically significant, the site housed the General Motors Research Laboratory from 1928 to 1956 “where hundreds of patents and products were developed.” 17 Everyone in Detroit associated the building with the pinnacle of Detroit’s manufacturing dominance, creativity, and innovation. Later, Shinola ads and the company’s website would feature the Argonaut building to reinforce Shinola’s connection to Detroit.

As a starting point for the brand’s development, Kartsotis commissioned a study that found people would pay $15 for a pen made in Detroit rather than $5 for a pen made in China or $10 for a pen made in the United States. These results suggested that a product associated with the right place could command a price premium. Of course, Shinola’s watches currently retail for $475 and up, definitely a premium price.

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The flagship retail location opened in a restored brick storefront that reinforced associations of artisan crafted products (see Exhibit 3). The first brand slogan, “where American is made,” directly sought to cement the view that Shinola products are the result of a resurgent manufacturing movement.

The Runwell and Other Watches

Enter the Runwell watch, Shinola’s flagship product. Sporting a simple and timeless design with a large round dial face and chunky case, the Runwell’s watchband is made from thick leather with visible contrast stitching that implies that it is handmade. The leather for the straps was initially sourced from a tannery in , while construction is now completed in the Detroit workshop that opened in 2014.18 19 A “limited lifetime guarantee on every watch” reassures the buyer of the product’s quality.20

Foregoing the traditional hinged felt and plastic jewelry box, each Shinola timepiece is housed in a wooden box and accompanied by a small jar of Shinola leather balm. The metal top of the jar is reminiscent of a shoe polish tin, connecting the brand to its namesake shoe polish. A metal plaque in the wooden box names the person who assembled the watch (See Exhibit 4).

Consumers like the watch:

“It’s expensive for what it is… but it’s also undeniable that these watches are well designed and finely crafted. …It’s definitely a retro affair, and the model I tested emphasizes that with a brass finish on the metal case. The lugs are similar to those that were once welded to pocket watches to make the first wristworn timepieces, and even the choice of typefaces for the Shinola logo and movement name harken back to a vaguely 30s or 40s-ish time period. All of which is to say, I like the look of the watch very much, but if your taste runs more modern you might not agree.”21

Other designs complete the watch lineup and allow the brand to vary shapes, sizes, features, and accent elements. Some watches are sold with additional watchbands to coordinate with clothing.

The Great Americans Series

In 2013, Shinola began offering limited edition watches honoring “Great Americans.” The first watch of the series highlighted the , the fathers of modern aviation, with the watch face displaying “The Wright Brothers” printed on it. The brand integrated this theme with a limited edition “” bicycle. Buyers of either the watch or the bicycle became members of “The Foundry”, a private collectors club, offering members early purchase of new limited-edition watches, an annual tour of the Detroit factory and access to exclusive events.22

Subsequent editions honored Henry Ford, pioneer of auto manufacturing, Muhammed Ali, one of the greatest boxers of all time, , notable author and poet, and Jackie Robinson, the legendary baseball player who was the first African-American to play in the formerly all-white

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Major League Baseball. By associating the brand with prominent historical figures the brand ties its products to reverence for individual accomplishments.23

Expanding Product Lines and Categories

While the brand is centered on watches, Shinola continues to add new products, including bound paper journals, bicycles, and record players. Shinola assembles the bicycles, but the journals and record players are built by partners that reinforce the Shinola design aesthetic and use consistent brand elements. Another partnership produced special editions of Randolph Engineering sunglasses, originally built for U.S. military aviators.

As the product lines expand beyond items made or assembled in Detroit by Shinola itself, it raises the question of continued associations with the city of Detroit. Do these new products weaken the link to Detroit’s heritage?

Authenticity… We Want It Real

A 2013 Consulting Group survey of 2,500 consumers concluded that “being authentic” was one of the most attractive qualities of a brand.24 But what does “being authentic” mean? Consumers are well aware that businesses want to sell them something, yet some brands are judged trustworthy while others are dismissed. We naturally judge the authenticity of an individual by the consistency of their words and actions. Brands are similarly judged by consumers.

Gilmore and Pine, in their book Authenticity: What Consumers Really Want, offer two questions that help people judge authenticity:25

1.) Is it what it says it is? 2.) Is it true to itself?

The first question speaks to the integrity of a brand, while the second is connected to the consistency of the brand’s actions. Gilmore and Pine also describe the “Paradox of Authenticity”:26

1.) If you are authentic, then you don’t have to say it. 2.) If you say it, then you better actually be it. 3.) It is easier to be authentic if you don’t say you’re authentic. 4.) It is easier to render offerings authentic, if you acknowledge they are fake. 5.) You don’t have to say your offerings are inauthentic, if you render them authentic.

Marketers seeking guidance as to how to render their offerings as authentic may refer to the following table to find guidance in creating the conditions that ought to yield the outcome they seek:27

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Commodities Goods Services Experiences & Transformation & Referential Influential Stress materials Stress your firsts Be direct & Pay personal Appeal to personal frank tribute aspirations Leave it raw Revive the past Focus on the Evoke a time Appeal to collective unique aspirations Be bare Look old Go slow Pick a place Embrace art Go green Mix & Mash Treat as Make it matter Promote a cause temporary Anti-conventional Be foreign Be realistic Give meaning

For example, a company offering services should focus their marketing communications on emphasizing that they will be direct and frank with consumers. Additionally, the firm should highlight that they will take the time to go slow in their interactions and ensure the consumer understands the service offering.

Other researchers, Grayson and Martinic, remind us that “perceived links with a time, person, or place” influence perceptions of authenticity.28 These perceptions can be very personal and subjective but the marketer seeks links that influence the greatest number of consumers to view the brand as authentic. As competitors copy product features, mass-produced goods become increasingly impersonal and manufactured in far-off places, consumers seek authenticity.29 Gilmore and Pine sum up the importance of this attribute with, “quality no longer differentiates; authenticity does.”30

Authenticity, as a branding concept, is not without its detractors. Brand strategist Constance DeCherney argued, “defining a brand by authenticity lacks clarity, is open to interpretation, and it’s ambiguous” and believes that a focus on defining brand intentions is more important to a brand’s success.31 DeCherney stated that proponents of authenticity use the concept so loosely that it lacks any real guidance or meaning. Furthermore, she noted that authenticity tends to anchor a brand to the past, “holding us back, keeping us tethered to yesteryear” and advocates that companies should instead “create a brand purpose that intentionally impacts the future.”

The Analysis and Decisions

Martin needed to decide if he felt the Shinola brand could grow and thrive, given its current situation. If so, how? Did he believe in its future enough to join the company, if given the opportunity? One journalist reported 2014 sales of this so-called affordable luxury brand of 150,000 – 170,000 watches,32 up from an initial online sale of 2,500 units in March 2013.33 Shinola’s future seemed promising but Martin wanted to be sure.

Buying a second cup of coffee, Martin listed his questions and began to try to answer them. He intended to ask some of these questions at his upcoming interview and to see if his interviewer’s responses matched his own evaluation.

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1. What are the strengths and weaknesses of the Shinola/Detroit association? Of the idea of associating the brand with manufacturing superiority? Of focusing on “handcrafted” products and featuring the people who put together Shinola’s goods? 2. What are the opportunities and risks associated with the deliberately constructed brand heritage and the various brand attributes of Shinola? 3. Is the Shinola brand “authentic” and convincing? Does brand authenticity really matter? 4. What product categories fit and which do not fit with Shinola’s established vintage brand association? 5. What kinds of marketing actions would support new product introductions and the ongoing marketing of the current Shinola-branded products? Which media and what messages would work best? 6. Which “Great American” would you suggest for the next limited-edition watch in “The Great Americans” series? Why? How would you connect this specific person to the Shinola brand? How would you package the physical product?

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Exhibit 1: The City of Detroit

Detroit Michigan Map.

Source: https://www.google.com/maps/place/Detroit,+MI/@42.3523699,- 101.0289235,4z/data=!4m5!3m4!1s0x8824ca0110cb1d75:0x5776864e35b9c4d2!8m2!3d42.331427!4d-83.0457538 See the 2011 Super Bowl ad, “Imported from Detroit,” featuring the rap artist Eminem and Chrysler for another impression of Detroit. https://www.youtube.com/watch?v=SKL254Y_jtc

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Exhibit 2

First Shinola Advertisement.

Source: http://marketingmag.ca/wp-content/uploads/2016/06/shinola.jpg

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Exhibit 3

Detroit retail store.

Source: http://www.adweek.com/brand-marketing/how-shinola-went-shoe-polish-coolest-brand-america-165459/

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Exhibit 4

Shinola Runwell 47mm watch and box.

Source: http://www.gmtminusfive.com/shinola-runwell-41mm-review/

Exhibit 5

The Argonaut Building, Detroit, Michigan.

Source: https://en.wikipedia.org/wiki/Argonaut_Building

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Exhibit 6

Shinola Ad.

Source: https://milled.com/hamilton/bTBpEeFLZwoNil9g

Exhibit 7

A tin of the original Shinola shoe polish https://en.wikipedia.org/wiki/Shinola#/media/File:Shinola.jpg Page 12 of 14

1 Shinola.com website (2017) Retrieved from: https://www.shinola.com/ 2 Moy, J. (March 26, 2014) On Shinola, Detroit's Misguided White Knight. Retrieved from http://www.complex.com/style/shinola-detroits-misguided-white-knight 3 Reindl, J.C. (June 17, 2016) FTC tells Shinola: Stop saying 'Where American is made'. Detroit Free Press. Retrieved from http://www.freep.com/story/money/business/2016/06/17/shinola- altering-marketing-claims-after-ftc-rebuke/86044878/ 4 http://www.revolution.com/bedrock/ 5 Burgess, S. (Oct. 9, 2015) Detroit’s Production Battle to Win World War II. Retrieved from http://www.motortrend.com/news/detroits-production-battle-to-win-world-war-ii/ 6 Vlasic, B. (September 22, 2013) Detroit Is Now a Charity Case for Carmakers. . Retrieved from http://www.nytimes.com/2013/09/23/business/detroit-is-now-a-charity- case-for-carmakers.html 7 Cosgrove, B. (July 22, 2012) Detroit Burning: Photos From the 12th Street Riot, 1967. Time. Retrieved from http://time.com/3638378/detroit-burning-photos-from-the-12th-street-riot-1967/ 8 Black, A. (August 26, 2015) 'Say nice things about Detroit' creator helps carry on message. Crain’s Detroit Business. Retrieved from http://www.crainsdetroit.com/article/20150826/NEWS/150829890/say-nice-things-about-detroit- creator-helps-carry-on-message 9 Vlasic, B. (July 15, 2013) Last Car Plant Brings Detroit Hope and Cash. The New York Times. Retrieved from http://www.nytimes.com/2013/07/16/business/last-car-plant-brings-detroit-hope- and-cash.html?pagewanted=all&_r=0 10 Bomey, N., Gallagher, J., and Stryker, M. (Nov. 9, 2014) How Detroit Was Reborn. Detroit Free Press. Retrieved from http://www.freep.com/story/news/local/detroit- bankruptcy/2014/11/09/detroit-bankruptcy-rosen-orr-snyder/18724267/ 11 Kurth, J. & MacDonald C. (May 14, 2015) Volume of abandoned homes 'absolutely terrifying'. The Detroit News. Retrieved from http://www.detroitnews.com/story/news/special- reports/2015/05/14/detroit-abandoned-homes-volume-terrifying/27237787/ 12 Halperin, A. (July 6, 2015) How Motor City Came Back From the Brink…and Left Most Detroiters Behind. Mother Jones. Retrieved from http://www.motherjones.com/politics/2015/07/motor-city-after-bankruptcy-and-detroiters-left- behind/ 13 Bureau of Labor and Statistics (2017) 2013 Local Area Unemployment. 14 Bomey, N., Gallagher, J., and Stryker, M. (November 9, 2014) How Detroit was Reborn. Detroit Free Press. Retrieved from http://www.freep.com/story/news/local/detroit- bankruptcy/2014/11/09/detroit-bankruptcy-rosen-orr-snyder/18724267/ 15 Hackman, R. (May 14, 2014) Detroit: the bankrupt city turned corporate luxury brand. The Guardian. Retrieved from https://www.theguardian.com/money/2014/may/14/detroit-bankrupt- brand-ad-chrysler-nostalgia 16 Reindl, J.C. (June 17, 2016) FTC tells Shinola: Stop saying 'Where American is made'. Detroit Free Press. Retrieved from http://www.freep.com/story/money/business/2016/06/17/shinola- altering-marketing-claims-after-ftc-rebuke/86044878/ 17 Proposed General Motors Research Laboratory/Argonaut Building Historic District (2017) Retrieved from

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http://www.detroitmi.gov/Portals/0/docs/historicdesignation/Final%20Reports/General%20Moto rs%20Research%20Laboratory%20Argonaut%20Building%20HD%20Final%20Report.pdf 18 Elejalde-Ruiz, A. (March 6, 2015) Shinola’s Detroit story a successful sell. The Chicago Tribune. Retrieved from http://www.chicagotribune.com/business/ct-shinola-storytelling-0308- biz-20150306-story.html 19 Perman, S. (April 201) The Real History of America’s Most Authentic Fake Brand, Inc. Magazine. Retrieved from https://www.inc.com/magazine/201604/stacy-perman/shinola-watch- history-manufacturing-heritage-brand.html 20 Shinola website https://www.shinola.com/introducing-shinola-guarantee.html 21 Etherington, Darrell. (November 29, 2013) Shinola’s Runwell Is A Solid Watch With American Pedigree, But You’ll Pay For The Homegrown Factor. TechCrunch. https://techcrunch.com/2013/11/29/shinola-runwell-41mm-review/ 22 The Foundry (2017) Retrieved from https://www.shinola.com/the-foundry.html 23 Wilson, J. (October 28, 2016) What a stylish way to honor one of the greats. Essence. Retrieved from http://www.essence.com/celebrity/maya-angelou-shinola-watch 24 Ryder, B. (November 14, 2015) It’s the real thing. The Economist. Retrieved from http://www.economist.com/news/business/21678216-authenticity-being-peddled-cure-drooping- brands-its-real-thing 25 Gilmore, J.H. and Pine, B.J., II. (2007), Authenticity: What Consumers Really Want, (Pp. 97). Harvard Business School Press, Boston, MA. 26 Gilmore, J.H. and Pine, B.J., II. (2007), Authenticity: What Consumers Really Want, (Pp. 89- 90). Harvard Business School Press, Boston, MA. 27 Gilmore, J.H. and Pine, B.J., II. (2007), Authenticity: What Consumers Really Want, (Pp. 56- 77). Harvard Business School Press, Boston, MA. 28 Grayson, K. and Martinec, R. (2004), Consumer perceptions of iconicity and indexicality and their influence on assessments of authentic market offerings. Journal of Consumer Research, Vol. 31 No. 2, pp. 296-312. 29 Beverland, M.B. and Farelly, F.J. (2010), The quest for authenticity in consumption: consumers’ purposive choice of authentic cues to shape experienced outcomes. Journal of Consumer Research, Vol. 36 No. 5, pp. 838-856. 30 Gilmore, J.H. and Pine, B.J., II. (2007), Authenticity: What Consumers Really Want, (Pp. 23). Harvard Business School Press, Boston, MA. 31 DeCherney, C. (February 3, 2017) F*ck Your Authenticity. This Should Be the Year of Good Intention, Adweek. Retrieved from http://www.adweek.com/brand-marketing/fck-your- authenticity-this-should-be-the-year-of-good-intention/ 32 Schneider, Sven Raphael & Shapira, J.A. (October 20, 2014) Shinola Watches – Made in Detroit? Gentlemen’s Gazette. https://www.gentlemansgazette.com/shinola-watches-detroit/ 33 VanderMey, Anne. (July 9, 2013). Think you know Shinola? Think again. Fortune. http://fortune.com/2013/07/09/think-you-know-shinola-think-again/

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