Fao Schwarz

Fao Schwarz

Apple Crushes FAO's 150 Years of Branding

Social media can be the messenger that drives people and brands to interact. Product design specialists provide input into how brands can maintain a long-term competitive advantage in a dynamic environment.

A recent article in Design Management Review (DMR) discussed authenticity and brands, and William Faust and Leigh Householder at Ology defined brand authenticity. They suggested that a brand should be clear about what it is and what it stands for; proper branding is built from the inside out rather than pandering to the latest trends, fad, or customer segment. Also, best practices branding is accomplished by using a real story, a connection to a fundamental truth, and an appreciation of one's smart customers.

On a recent visit to the Apple Store at Fifth Avenue and 57th Street in New York City, I was surprised to see the line of customers of all ages spilling out of the store onto the Fifth Avenue sidewalk. Customers (some tourists) were as happy and excited outside the store as were those inside. While inside, visitors explored the store, trying out the products and purchasing some of Apple's latest technology offerings.

This appears to be a typical customer scenario at this store, and other store locations across the country experience a steady flow of customers as well.

Next door (a 15-second walk past the GM building) is the world-famous FAO Schwarz toy store (now owned by Toys "R" Us). Like Apple is now, FAO. was once a must-see toy store at 57th and Fifth Avenue.

It was world-renowned for its assortment of one-of-a-kind, unique products including toys, entertainment products, and film and TV merchandising. Its products reflected the brand's dedication to the quality that its customers had come to trust for nearly 150 years, but over the past several years the brand's image has eroded, and customers seen to smell blood in the water.

On this particular day, as on many others throughout the year, FAO was suffering from customer attrition and lack of interest in its merchandise.

What also surprised me was the dramatic difference in foot traffic between the Apple and FAO stores. FAO was relatively empty, even though the streets were swarming with tourists looking for an air conditioned and entertaining store to cool off in. Instead they chose to stand on Apple's long line, which extended from within the store, up the escalator, and outside to the sidewalk in the hot August 90-degree sun. It was like waiting to get into a popular night club-new customers were not allowed in until others left. And this was not an new product release day.

Is Apple better at engaging its customers through digital and traditional media in conjunction with its product releases? Let us take a closer look at these companies' current social media presence:

Apple:

Facebook - 628,516 fans

Twitter (over 50 accounts) - iTunes account has 1,528,755 followers, is following 14, and has 692 Tweets

Apples YouTube Channel -

Channel Views: 2,760,784

Total Upload Views: 14,444,703

Joined: June 21, 2005

Subscribers: 82,802

FAO Schwartz

Facebook - 4,779 fans

Twitter - 411 followers, is following 5, and has 11 Tweets

YouTube Channel:

Channel Views: 5,296

Total Upload Views: 24,626

Age: 42

Joined: July 24, 2007 (two years after Apple)

Last Visit Date: 10 months ago

Subscribers: 53

Videos taken by a manager at FAO Schwarz in NYC.

Apple appears to have a stronger social media presence, even though FAO has a 150-year-old emotional tether to people of all ages with its focus on classic toys and historic and current film and television merchandising. FAO was also a strong brand communicator prior to the emergence of social media marketing, and the film Big cemented its place in toy merchandising history. People of all ages also have a psychological attachment to FAO's products dating from their childhood memories. Its PR and social media branding campaigns began much earlier than Apple's.

Is it that FAO's brand and its related merchandise are not relevant in today's entertainment market, or is it that their media agency(s) are not working outside the box to connect with its customer base? (I also realize that the big box stores such as Wal-Mart are undercutting FAO's sales through low pricing, although some of their entertainment products and in-store special service offerings are not the same.)

Apple and FAO (both companies market entertainment products globally) speak to the central challenge of social media, as Faust and Householder define it, "creating social dialogue that is both engaging to customers and true to the core of the brand."

But FAO seems to have lost that "thing" as noted by Faust and Householder that people inside and outside the company can connect to and recognize themselves in. While FAO has suffered from poor management and ownership changes in recent years, that's no excuse for ruining a 150-year-old brand for lack of a good branding and marketing strategy. If money is the problem, FAO could have employed several young digital strategists to create a successful campaign that is relevant to today's younger generation.

People of all ages relate to Apple's cool, hip media buzz, design technology releases, and media campaigns that support their products.

Also, Apple's customers are willing to spend more (even in a recession) for Apple's products than for similar ones made by a competitor. Is it that people today would rather see themselves as cool, savvy, and socially current tech users in tune with the latest trends and fads?

If so, Apple's approach goes against the current wisdom of some experts in the field of product design, branding, and sustainability, which states that branding is built from the inside out. Apple does not always follow the latest trend, fad, or customer segment, but sometimes that's because it creates them. Maybe Apple is the exception to the rule of best practice branding that states, "for a brand to be successful it should be clear about what it is and what it stands for, and add to it."

FAO lacks a cohesive branding, marketing, and social media strategy. It is disconnected from its current and potential customers, lacks creativity in its PR buzz process, and doesn't have an effective social media listening strategy. I do believe that its products are relevant to today's customers, but evidence of a weak marketing plan is visible in their in-store foot traffic levels and also their Search Engine Optimization (SEO) approach.

From a (SEO) marketing perspective, FAO has 1,067 external links to its home page from other sites (Apple.com has 1,336.191), with FAO's parent company, Toys R Us, having 6,117 external links to its home page. This means that Toys R Us is cited as a stronger authority in the eyes of Google search algorithms. If Toys R US can improve their own SEO link strength, they can do the same for FAO's. The parent company has a first page, second place position in an organic (non-paid) Google broad search (without enclosing the search term "toys" in quotes). FAO appears up on the second page of a Google search, fourth down from the top of the page.

One strategy Toys R US could begin using is to spend more time on FAO's SEO organic search strength, which would provide its customers with better online store visibility. This could save money on those paid (PPC) online advertisements. A far as other FAO online competitors, as of this posting, Fisher Toys (with a first page, first place position) has 28,285 external links to its page, eToys (with a first page, third place position), has 842 external links to its page, and KB Toys (with a first page, fourth place position) has 42 external links to its page. (All search results were conducted by using the term "toys" in Google search.) Also, while KB Toys has fewer links pointing to its home page than FAO does, it also does not have FAO's almost full page of Flash content, which can interfere with search engines' ability to properly index a web page. While there are other SEO strategies that I have not discussed, at first glance these are some of the more obvious ones.

FAO's focus on customer loyalty and marketing of its products based on its one-of-a-kind unique products are no longer enough to forge a powerful connection to a brand that was once the toy store to beat. Today's consumers expect to interact with a brand, and that can be accomplished cost-effectively through digital and social media.

Apple's PR (buzz), social media strategy, traditional marketing, and advertising provide a very different consumer experience. It launched numerous products (including the iPod that proved to be the "game changer," thrusting the company from a provider of computers to an entertainment company. FAO can learn from one of the most innovative companies operating in today's business market with an ultra-loyal user base. Over the past ten years, it could be said that Apple had only one new release product flop, the Power Mac G4 Cube (phased out after its first year), while the jury may still be out on the Mac mini and Apple TV.

Apple has marketed itself as a company that can solve your personal entertainment and business problems instantly; their promotions connect to a basic human desire (for life to be easier), and the desire to be fun and cool even if it costs more. They also express something else important about the core of the brand: that Apple is a fast problem-solver. Often that means not only thinking about what the customer would like, but also defining what's true to the brand. Toys will always be fun. But easy is fun and authentic.

Peter Sabbagh is a

 

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Visiting NYC - Which sub station to use?

Planning to visit with family and will use subway to get to different spots. Please tell me how do I get to these different places:
Plaza Hotel & Fao Schwarz Toy store
NBA Store, Walt Disney Store
Empire State Building
Trump Towers
Statue of Liberty
Rockefeller Center
Times Square
any other suggestions????

Also about 7 yrs back there used to be FUN PASS (an all day Subway and Bus pass) is it still available and for how much?

this all depends on where you are traveling from. I suggest using hopstop.com to plan your trip, it is a very convenient and easy to use site for subway directions.

I think there is still a fun pass but I am unsure how much it is

FAO Schwartz Giant Piano