Challenger to Watch 2017: Shinola
Making America make again.
Shinola is a shining example of how to challenge the status quo by resurrecting, polishing up and relaunching a brand from the past that had lost its lustre and even gone out of business. It is a very appealing story of a ‘comeback kid’ synonymous with the American Dream. A classic ‘underdog’ challenger story that taps into the American ethos of rooting for the hard-working, blue collar everyman, the rebirth of down-trodden Detroit and the prevailing desire to create new jobs in the U.S.
Shinola is a brilliant example of a belief-driven brand – a luxury and lifestyle brand built on the simple but strong belief that Americans can produce luxury goods, and that people will pay significantly more for a product not just ‘Made in America’ but ‘(Hand)Made in Detroit’. It was conceived out of a simple insight found in a research study that showed consumers’ willingness to pay $5 for a pen made in China, $10 for one Made in USA and $15+ for Made in Detroit.
It is also a classic case of finding and creating opportunity out of adversity. Shinola was a deceased brand, that went out of business in the 60’s. It was resurrected out of the vision of Tom Kartsotis, the founder of Fossil brands, and financed with a $255m private equity investment in 2011 from Bedrock Manufacturing Co.
Known initially for its affordable luxury watches, hand crafted bicycles and premium leather goods, the brand has skyrocketed from nothing to a successful ‘sold out’ luxury lifestyle brand that now includes audio turntables, pocket knives, wall clocks, electric power strips (the latter two produced in partnership with another nostalgic American Icon, GE) and most recently a Luxury Hotel in development in Downtown Detroit. It has been referred to as the ‘Coolest Brand in America’ and a shining example of ‘Manufactured Authenticity.’ Success came in part because it tapped into a macro trend toward a renewed appreciation for the simple elegance and utility of a certain retro design ethos found all around Motown.
Those familiar with the brand’s heritage will recognize the famous phrase – “You don’t know shit from Shinola.” It was coined during WWII by the story of a soldier who supposedly mocked a superior officer who couldn’t tell the difference between GI boots polished up with Shinola or dog waste. The company has proudly reprised this phrase and story in dividing the world according to their vision, and offering a POV that there are still some people who just can’t tell the difference between fine, hand-crafted [American] luxury quality and cheap crap ‘Made in China.’ Only a belief-driven, opportunistic Challenger might think to reappraise a phrase from the 1940’s and reintroduce it to the popular vernacular 75 years later in 2016.
Shinola has been tremendously successful in just 5 years since launch. The company has created over 400 jobs in Detroit, with a significant portion of their workforce coming from auto workers who lost their jobs during the economic collapse of 2008 and the decline of the US Auto Manufacturers. They have a flagship store in Detroit, have renovated a landmark Detroit building (formerly owned by General Motors) to create a design and innovation center, and have plans to open 15 retail stores in N. America, and more around the globe. Their products and innovative designs and limited edition models regularly sell out and they have reached $60m in sales in 2016.
Shinola has proven once again that there is no such thing as a tired brand or company, only tired marketers and managers who don’t know how to challenge themselves or the status quo.