How to build a product universe: tactics of product-led branding

Rei:
00:00:04
do you pay attention to politics?



Rei:
00:00:06
It's something that's stressing me out.



Rei:
00:00:08
It's stressing me



Ana:
00:00:09
I came to Miami on Wednesday to vote because we are registered here.



Rei:
00:00:14
oh, you are.



Rei:
00:00:16
We need more transplants like you, Anna, from New York to,



Ana:
00:00:19
I know.



Ana:
00:00:20
I don't think at least it's two votes.



Ana:
00:00:22
We're going,



Rei:
00:00:23
at least two votes.



Ana:
00:00:24
know, but like we're stealing two votes from, you



Rei:
00:00:27
Yeah, yeah, yeah,



Rei:
00:00:37
So today we are talking about how to build a product universe tactics of product led branding.



Rei:
00:00:42
So Anna, I'm going to hand over to you because this is one of the topics that you've been writing about.



Rei:
00:00:48
You've been thinking about quite a bit.



Rei:
00:00:50
So tell me about, you know, what you mean by product universe and, where your mind is.



Ana:
00:00:55
So this is how it actually started.



Ana:
00:00:57
It's based on my work at Banana Republic and Esprit.



Ana:
00:01:03
When you start thinking that like, hey, you can, you can build brand through cultural products.



Ana:
00:01:09
Which is merchandising, collaborations, events, creative partnerships, content, brand codes, and so on.



Ana:
00:01:17
But what actually really needs to happen is for marketing and merchandising to work really, really close together.



Ana:
00:01:23
And to actually have such a definition



Ana:
00:01:29
of products, product ranges, collections, hero products, foundations, but then also classics, capsules, limited editions, collaborations, that, that becomes part of a brand's business plan.



Ana:
00:01:45
And it becomes part of a brand strategy.



Ana:
00:01:48
And what I mean by that, it literally, you can say, hey, if our entire output, product output, and most retailers, add, add, add, add.



Ana:
00:02:00
Solution to more consumption is more products, you know.



Ana:
00:02:06
So you end up with queues, which is, which are product numbers that are a really long tail, and you sometimes don't even know, you know, what's What is going on?



Ana:
00:02:15
And when merchandisers look at their Excel spreadsheets, they look mostly at the product performance.



Ana:
00:02:22
Did it sell?



Ana:
00:02:22
Did it not sell?



Ana:
00:02:24
So this is building upon that, but then also looking at what are the hero products?



Ana:
00:02:31
What is the purest distillation, distillation of the brand?



Ana:
00:02:35
Can we use that as a folder for collaborations?



Ana:
00:02:37
Can we use special materials?



Ana:
00:02:39
Can we have that?



Ana:
00:02:40
It's something that we do year over year over year, but reissuing the different colors, different materials with different creative partners as part of different characters.



Ana:
00:02:49
What is our collection?



Ana:
00:02:50
What is the interpretation for seasonal, of seasonal trends through our filter?



Ana:
00:02:55
And what are those foundational products that are, that go never out of stock?



Ana:
00:02:59
They're always there.



Ana:
00:03:01
And then, what is the cultural impact of all of those?



Ana:
00:03:05
How do you build merch around it?



Ana:
00:03:07
How do you build collaborations around it?



Ana:
00:03:10
How do you build content around it?



Ana:
00:03:12
How do you create, sort of, Structure that says, hey, we are going to use all those different products to start a conversation with different members of the creative class, with our key personas.



Ana:
00:03:23
They're going to buy most of this.



Ana:
00:03:25
And all of what I just explained is relevant because it really helps you fine tune your financial plan.



Ana:
00:03:32
It really helps you fine tune how much money do you want to make each month.



Ana:
00:03:37
each quarter, each year, and to go from that objective backwards and say we need x amount of hero products, we need x amount of collections, x amount of foundations, and this is how our promotional plan looks like.



Ana:
00:03:51
Heroes never go on sale, for example.



Ana:
00:03:54
Foundation goes on sale after three months, collections go after one month, never more than 30 percent.



Ana:
00:03:59
So let's unpack this further, but I first want to hear your experience.



Rei:
00:04:03
have a, I have, I have a question, a couple of questions and just, so for some people who might not be in the fashion industry, and I understood when you use what, like, you know, foundation collection and hero product, so give me a tangible example of what you mean by hero product.



Rei:
00:04:20
And you said that, you know, hero product may not go on sale.



Ana:
00:04:23
Correct.



Rei:
00:04:24
yeah, give me, give me an example of what a hero product is, what a foundation is and what a collection is.



Rei:
00:04:29
Oh,



Ana:
00:04:32
when we said, Hey, if we kind of combine the Safari origins of Banana Republic, which even in Safari, they were upcycled military garments.



Ana:
00:04:44
So there was a lot of, Pants that, that had multiple pockets and straps.



Ana:
00:04:49
There were shorts, there were those vests with multiple pockets.



Ana:
00:04:54
There were coats that were oversized, and again, very functional.



Ana:
00:04:58
So take one, say, do a vest.



Ana:
00:05:01
Do a photojournalist vest, which is a vest with a lot of pockets.



Ana:
00:05:05
If you do a hero version of that, that means it comes in suede, in leather, in fur.



Ana:
00:05:11
But because it's a photojournalist vest, it's the purest distillation of what the brand is about.



Ana:
00:05:17
If it comes in a foundation, then it's made out of canvas, for example, or denim.



Ana:
00:05:22
If it's done as a collection, that means, oh, what are the seasonal colors?



Ana:
00:05:27
What is on trend?



Ana:
00:05:29
What shape is on trend?



Ana:
00:05:31
And we are going to do that vest in maybe cinched waist, or maybe it's going to be tailored, or maybe it's going to be longer, depending on what the trend is.



Rei:
00:05:40
So is it, am I correct in understanding that, this is a bit of a pyramid?



Ana:
00:05:45
Yes, it's a pyramid because, hero products are your margin drivers.



Ana:
00:05:50
Foundation is your volume driver and collection is your volume driver.



Ana:
00:05:54
Margin driver means that that's how you make really money.



Ana:
00:05:57
And you're not going to create a lot.



Ana:
00:05:59
Not everyone is going to want to buy a fur vest.



Ana:
00:06:03
Those who do are those from the creative class who are influenced, more influential, who are going to wear it and say, Oh, this is Banana Republic.



Ana:
00:06:11
I love this vest.



Ana:
00:06:12
And it's going to be priced higher, but the quantities are going to be limited and it's going to be available only maybe.



Ana:
00:06:19
In flagship stores,



Rei:
00:06:21
You know, one thing that was from the previous conversation that we had, and, yeah.



Rei:
00:06:27
Because you and I come from slightly different, career perspectives and backgrounds.



Rei:
00:06:32
And in the past decade or so, you've spent quite a bit of time in the fashion, luxury retail world.



Rei:
00:06:40
And my background, part of it is that, but I don't necessarily exclusively focus, in that industry just because, you know, we work with multiple clients, so we may have a fashion client.



Rei:
00:06:51
We may have



Ana:
00:06:51
today this is applicable beyond it's applicable beyond the pedal.



Ana:
00:06:57
It's applicable to all sorts.



Ana:
00:06:58
So I'll let you get



Rei:
00:07:00
Yeah.



Rei:
00:07:00
So



Rei:
00:07:00
I, I,



Ana:
00:07:00
want, to say the expectations of the audience that actually, it can be, it can be applied to CPG as well.



Rei:
00:07:07
Yeah.



Rei:
00:07:08
So like the last time I want to unpack it from a non sexy non fashion perspective a



Rei:
00:07:15
little bit.



Rei:
00:07:16
Yeah.



Rei:
00:07:17
give me, give me another example where this triangle or the, the pyramid of, you know, Hero Foundation collection.



Rei:
00:07:25
and I want to again, unpack it to apply to non fashion, non retail, non apparel industry to see how we can sort of replicate that, that dynamic outside of the, the



Ana:
00:07:38
Now I'll give you, I'll give a CPG example,



Rei:
00:07:41
Okay.



Rei:
00:07:41
Okay.



Rei:
00:07:41
Yeah, yeah,



Ana:
00:07:42
you'll see that, and then I also want to get into maybe capsules, limited editions, classics, because for Banana, they hit classics like, oh, White Button Down, Oversight, or Chinos.



Ana:
00:07:53
Or that photojournalist vest or a cashmere sweater, you know, like when you have those and when someone you basically, all you want to do is build a brand around those products and by setting people's expectations and you are allowed to set people's expectations because you can build a story around what the classics are.



Ana:
00:08:14
And they never, they can always expect to see it in July, in all, in, in, in October, in April, they're going to be there.



Ana:
00:08:22
They may be seasonal variants, but that's something that are classic to the brand.



Ana:
00:08:28
They're the core, they're different from heroes in a sense that don't need to be the most expensive thing, and they don't need to be in special material.



Ana:
00:08:37
And they're different from, they usually belong to that foundation, but foundation is much broader.



Ana:
00:08:43
are the sub stack of that.



Ana:
00:08:45
But, if you say, for example, chocolate.



Ana:
00:08:48
Hero item would be, Oh, we partnered with this famous French chocolatier, like your Milka chocolate, and you partnered with some artisanal chef for the 500 editions that are going to be available only in Ritz in Paris in October and November to celebrate Xmas.



Ana:
00:09:07
That's your hero.



Ana:
00:09:08
And then it become available maybe next year on the site or in selected stores and so on.



Ana:
00:09:13
Foundation for milk and chocolate is the pure basic milk.



Ana:
00:09:18
it's like No additions, there is just like 80 percent milk, 20 percent or whatever, I don't know what the percentages are, but it's like milk chocolate, that.



Ana:
00:09:27
And then you have maybe a darker one, and then you have this one, that's your basic.



Ana:
00:09:31
And then, when you have that collections, then you say, let's do it with coconut, let's do it with strawberries, let's see, Oh, people are really like freaking out over umami, let's do, let's do umami, let's do, you know, miso flavor.



Ana:
00:09:43
That's where it comes, that seasonal flavor, so it's applicable, I think, to CPGs as well.



Ana:
00:09:49
Also, like, for chips, for example, and different flavors and so on.



Rei:
00:09:53
You know, before this conversation, I was, as I was thinking about a product universe and a reason this is a very popular, widely shared case study of the past couple of years, which is a Stanley, the mug cup.



Rei:
00:10:09
Yeah.



Rei:
00:10:11
Yeah.



Rei:
00:10:12
Yeah.



Rei:
00:10:12
Cause I think that's one brand.



Rei:
00:10:15
In the past few years, that's re invented the brand without a massive rebrand or campaign effort,



Ana:
00:10:27
Do you know that they existed 120 years, that company?



Ana:
00:10:31
And you know how many things they sell?



Ana:
00:10:33
They have everything from like outdoor stoves, to like tents, to like Oh, you have a Stanley Cup.



Ana:
00:10:40
So, but not



Rei:
00:10:41
Oh, it's by the way, it's, it's, this is not a standing up.



Ana:
00:10:43
It's not, it's a knockoff.



Ana:
00:10:45
That's how you know you have a hero product, when, when, when people knock it off.



Ana:
00:10:49
Anyway, you know how it happened?



Ana:
00:10:52
It's like, that's why Stanley Cup is Stanley's hero product.



Rei:
00:10:57
Right.



Rei:
00:10:57
Right.



Ana:
00:10:57
And sometimes, you know, it just takes history, like Burberry Trench, that would be a hero product for Burberry, you know, or hero product for Apple would be iPhone now, but maybe it was Mac before.



Rei:
00:11:10
Mm.



Rei:
00:11:10
Mm.



Rei:
00:11:10
Yes.



Ana:
00:11:11
something.



Ana:
00:11:11
But anyway, I love that you brought up Stanley because you know how that Stanley Cup actually exploded, the car burned down, but Stanley Cup did



Rei:
00:11:19
Yes.



Rei:
00:11:20
Yes.



Rei:
00:11:20
Yeah.



Rei:
00:11:20
Yeah.



Rei:
00:11:20
Yeah.



Rei:
00:11:20
Yeah.



Ana:
00:11:21
But, I don't think that would have been enough if Stanley Cup was already not popular among many different teenage and kids groups through Y distribution, through Starbucks.



Ana:
00:11:37
It just achieved its cult status.



Ana:
00:11:39
Status.



Rei:
00:11:40
yeah, because I think that the car burning down, I think it happened if I remember correctly in the fall of 2023.



Ana:
00:11:48
Correct.



Ana:
00:11:48
Last year around this time, I think it was like maybe December, but anyway,



Rei:
00:11:51
Yeah, yeah.



Rei:
00:11:52
But Stanley really started gaining momentum several years before that.



Rei:
00:11:58
And that just, the car incident happened to be one incident that elevated even further, you know?



Ana:
00:12:08
I think it's, it's through their distribution because I think they started distribution in Starbucks and



Rei:
00:12:14
Oh, right,



Ana:
00:12:14
know, how kids go to Starbucks.



Ana:
00:12:16
They want Frappuccino.



Ana:
00:12:17
They want, I don't know what not.



Ana:
00:12:19
And I think like, I know that 10 year olds love Stanley cup



Rei:
00:12:25
Mm



Ana:
00:12:26
You know, so I think it was like, you see, that's like, it was not even a brand strategy, it was a product distribution.



Rei:
00:12:32
But you know, so I actually have a completely different example that I wanted to, uh, share.



Rei:
00:12:38
It's totally random



Rei:
00:12:41
and



Ana:
00:12:42
again Japanese duffel bag?



Rei:
00:12:44
no, no, that was, well, so this is very esoteric,



Rei:
00:12:48
but yeah, but I kind of wanted to connect the dots because it was something that's very unusual and esoteric because like Stanley is a good story, but it's a bit of a, fairy tale, you know, right.



Rei:
00:13:04
It's diff, it's not easy to replicate that kind of success



Ana:
00:13:07
Correct.



Ana:
00:13:07
And I don't think that even if they planned it, that it would be so successful.



Ana:
00:13:11
So that, I think that's the entire point of, you know, Having such a wide distribution that at some point, something is going to happen.



Rei:
00:13:19
Yeah.



Rei:
00:13:19
So let me, let me share this example.



Rei:
00:13:21
It's a Japanese shrine, and Japanese shrine or Shinto shrine in Japan is like Starbucks in that the number of shrines in Japan is like every other corner, And the way they make money, I mean it's a shrine, it's a non profit organization.



Rei:
00:13:43
But they have to somehow make money in order to survive.



Rei:
00:13:46
Right?



Rei:
00:13:47
So the way they make money is actually within the first three days of the year.



Rei:
00:13:52
So there's a custom in Japan where in the first three days, people flocked these shrines



Ana:
00:13:59
Okay.



Rei:
00:13:59
just give change



Rei:
00:14:01
into wish box, like, you know, a dollar, 2, maybe even 10, but like little change and a lot of shrines.



Rei:
00:14:10
make 95 percent of the revenue from that just people flocking to the shrine.



Ana:
00:14:18
For these first three days.



Ana:
00:14:19
This is like, like, this is like tax accountants



Rei:
00:14:23
Yes, exactly.



Rei:
00:14:24
When they when they do.



Ana:
00:14:25
15th.



Ana:
00:14:26
And they're like, they recover for the next whatever, 11 months.



Rei:
00:14:30
but like the rest of the year, They don't have much to do.



Rei:
00:14:33
and it's a family business, usually, you know, your dad is a priest, your grandfather is a priest.



Rei:
00:14:39
And I read this case, a fascinating case study of a guy who inherited, from his father, like 10, 15 years ago when he was 25, and that's what he did.



Rei:
00:14:49
This is a shrine that's in the countryside of Japan, and he was making 35, 000 a year, and his father couldn't make a living just purely being a priest, so he had a gig the rest of the year to make ends meet.



Rei:
00:15:05
And then he just happened to have this shrine that he was managing.



Rei:
00:15:08
So when this son took over, he was like, Oh, what, what should I do?



Rei:
00:15:13
Should I just do the same thing?



Rei:
00:15:15
Like collect change in the first three, three, three days and then do something else.



Rei:
00:15:20
But he decided not to do that.



Rei:
00:15:23
And he thought about, okay, how can I grow this practice?



Rei:
00:15:28
So between 2009 and 2023, over the course of 10, 13 years, he went from $35,000 a year to now over a million dollars a year.



Rei:
00:15:44
yeah, it took time, it took like 12 years, but he grew the business 30 times and he did this by building a product universe.



Rei:
00:15:56
Basically, Not necessarily in a sort of, you know, it wasn't like a cultural hit that they introduced, but he created a universe of different products and services over time.



Rei:
00:16:08
And then he made it into a company.



Rei:
00:16:11
So basically, you know, this was the, the location, this was the shrine that, that he had.



Rei:
00:16:16
And then back then, like 12 years ago, what he was selling was these little lucky charms.



Rei:
00:16:24
Right.



Rei:
00:16:24
These are off the shelf, a dollar, you know, lucky charm that these visitors would buy for good luck.



Rei:
00:16:33
But what he then did was, you know what, instead of create is offering these cheap charms that he was selling, he actually developed his own set of products, more high end, more unique, more original, more elevated.



Ana:
00:16:51
That's his pyramid.



Ana:
00:16:52
Like, right there.



Ana:
00:16:53
See?



Rei:
00:16:54
exactly, exactly.



Ana:
00:16:55
Oh, I love this.



Ana:
00:16:56
This looks so beautiful.



Ana:
00:16:57
I think you're like, right that you say is esoteric, but it's also not because you know, how like spas do the same thing and even hotels do the same thing now, how you can go to a man and there is an online shop and you can get like, all the products that you would get without even going there.



Ana:
00:17:16
They found a way how to kind of extend the, because you know, when you go to like, let's say in Japan, so Japanese ryokans, for example, you're there three days, no longer, or maybe a day here or something like that.



Ana:
00:17:30
But the way to really extend it is through the exactly what this guy has done, which is build that product universe, which is a mixture of.



Ana:
00:17:39
Actual products and services and then cultural products for like, you can buy like the same shampoo that is available there, but you can also buy a book or you can buy an instructional, how to make a hot bath at home or something.



Rei:
00:17:54
yeah, yeah, so what he did was, you know, what, what used to be just people flocking to the shrine the first three days and like literally throwing change, and then maybe selling these chakis.



Rei:
00:18:06
You know, for a dollar a piece to creating original product, like narrowing down to fewer products.



Rei:
00:18:14
He also, what he also did was creating services like super high end services.



Rei:
00:18:20
what he ended up doing was expanding the business from like three days a year to 365 days a year.



Rei:
00:18:28
in terms of these, items that he was selling to off the shelf, cheap stuff to fewer, but more premium, like original items, moving the services from outdoors to indoors, and then, increasing the revenue from 35, 000.



Rei:
00:18:43
To a million dollars a year by quote, unquote, expanding the product universe.



Rei:
00:18:47
So as I was thinking about this topic prior to this conversation, I was like, wow, this is a fascinating one because it's a family business that's been around for like literally for centuries and not making any money to, yeah, it took about a decade or so, but transforming completely by creating a product universe.



Rei:
00:19:08
Yeah,



Ana:
00:19:09
So I have a question for you, Dan.



Ana:
00:19:11
love this example.



Ana:
00:19:12
So let's, let's, let's stretch it further.



Ana:
00:19:15
What if other shrines start offering the exact same thing?



Ana:
00:19:19
How



Ana:
00:19:20
is hidden one compared,



Rei:
00:19:22
what he's doing now is that two years ago, he started a consulting service to other shrines.



Ana:
00:19:30
Okay.



Ana:
00:19:31
So he created SAS.



Ana:
00:19:32
Okay.



Rei:
00:19:38
and he's offering that to other shrines and then they can also use the same, service package, but in other locations.



Rei:
00:19:47
So you know, these shrines are independent family owned businesses.



Rei:
00:19:52
He's franchised it so that other shrines can now license.



Rei:
00:19:57
his service



Rei:
00:19:58
and then offer it.



Ana:
00:20:00
I love that.



Ana:
00:20:00
Like, this is so good.



Ana:
00:20:02
And also, I also think because he is a first mover, he probably has more information than anyone



Rei:
00:20:08
exactly.



Rei:
00:20:09
Exactly.



Ana:
00:20:10
how to take it further.



Ana:
00:20:11
So he can all, like, because he is, again, a first mover then copycat, and he is actually charging copycats.



Ana:
00:20:17
I mean, some of them, some others are going to do it by themselves.



Ana:
00:20:20
But I think he's always going to be a step ahead.



Ana:
00:20:22
Yeah.



Rei:
00:20:23
Exactly.



Rei:
00:20:23
Exactly.



Ana:
00:20:24
Why, like, you should do like a, I don't know, a hotel or something.



Rei:
00:20:28
possibly, possibly.



Rei:
00:20:29
Yeah.



Ana:
00:20:30
you know?



Rei:
00:20:31
And you know, speaking of nearby, it's in a, in a coastal town.



Rei:
00:20:35
So it's got a beautiful, ocean view and over the course of 10, 12 years or so, like he's made enough money to expand the facility from like one to like, little shrine to multiple facilities within the



Ana:
00:20:48
A restaurant, a hotel, a spa, like, you name it, there you go.



Ana:
00:20:54
Love it.



Ana:
00:20:55
But you know what that reminded me of?



Ana:
00:20:56
I will just add McDonald's, because McDonald's



Ana:
00:20:59
had, like, Maybe 10 years ago or something, it gets so many undifferentiated products.



Ana:
00:21:06
It hits salads.



Ana:
00:21:07
It had like no one associated McDonald's with salad.



Ana:
00:21:10
So they were like, Oh, let's offer more things in order to saturate the market in order to basically be there for every occasion.



Ana:
00:21:17
Maybe people don't meet or blah, blah.



Ana:
00:21:19
And they didn't work.



Ana:
00:21:21
I mean, I know that now they they have a little, quarter pounder crisis.



Ana:
00:21:25
But when the new CEO came, he was like, you know what?



Ana:
00:21:30
Let's just reset this.



Ana:
00:21:31
Let's just say we're not in the hamburger business.



Ana:
00:21:34
We are in the show business.



Ana:
00:21:35
And that, you know, that was really way before that, like brand started talking about entertainment and so on.



Ana:
00:21:42
What he meant by that is that basically.



Ana:
00:21:45
That he's going to create experience and he's going to sit down, he's going to narrow down his product pyramid.



Ana:
00:21:51
He was like, no, the basics, the burger, the fries, the apple pie.



Ana:
00:21:56
And then you can have like three burgers, you know, fries never change and so on, ice cream.



Ana:
00:22:02
Literally spared that menu down.



Ana:
00:22:06
So when people go to McDonald's, they go for a specific taste for a specific product.



Ana:
00:22:10
That's classics.



Ana:
00:22:11
Thanks.



Ana:
00:22:12
And then maybe seasonally he adds some stuff and so on.



Ana:
00:22:15
That would be his collection.



Ana:
00:22:16
But what was really relevant, it started collaborating with Travis Scott on a Happy Meal.



Ana:
00:22:22
It turned Happy Meal into a cultural product.



Ana:
00:22:27
Because it tapped in all those celebrities, what you like co created with them tapped into there.



Ana:
00:22:32
You know, you can say, well, that's nothing new.



Ana:
00:22:34
Well, it's not.



Ana:
00:22:35
But like, he used Happy Meal as, again, as that cultural vehicle.



Ana:
00:22:40
A cultural product is gonna mean a lot of different things to a lot of different people and be an entry point into a brand.



Ana:
00:22:46
Those little toys that you get, that you start then collecting, that was that dialogue that



Ana:
00:22:52
they used for.



Rei:
00:22:54
you know,



Ana:
00:22:54
And then with palace and so on, like all the later collaborations,



Rei:
00:22:59
I think speaking of McDonald's, which is not a fashion brand, it's not a luxury brand.



Rei:
00:23:04
It's quite the opposite, right?



Rei:
00:23:07
But as it relates to culture, one of the smart things that they did, I think earlier this year, called walk Donald's.



Rei:
00:23:15
Do you know about that?



Rei:
00:23:17
So it's kind of reverse engineering what was happening in culture and bringing it to business.



Rei:
00:23:24
So you know how the McDonald's, logo is the golden arch, the W, right?



Rei:
00:23:29
So in the anime culture, in the anime world, there are wakudanos, so if you flip the



Ana:
00:23:36
Ah, so okay, got it.



Ana:
00:23:38
Right, right, right.



Ana:
00:23:39
Uh huh, Uh huh, uh huh,



Rei:
00:23:40
so So,



Ana:
00:23:41
like in Japan or was it here



Rei:
00:23:42
no, no, no, it wasn't in Japan.



Rei:
00:23:44
What, it's Japanese influence?



Rei:
00:23:47
But it's, I think it happened, only in the U S so



Ana:
00:23:52
Ah, okay.



Rei:
00:23:54
what, what Donald



Ana:
00:23:55
Never seen this before.



Rei:
00:23:56
is a fiction, a fictional fast food company in the, in anime.



Rei:
00:24:02
Right.



Rei:
00:24:03
And I don't know if they got like license or, permission from McDonald's to do it, but it's sort of been, and it's been existing for quite a, quite some time.



Rei:
00:24:13
So what McDonald's did earlier this year was.



Rei:
00:24:17
What if we take this and for a limited amount of time for like four weeks, I think it was in March this year, create a real McDonald's.



Rei:
00:24:27
So I think one or a couple of locations in, in, in California earlier this year, for a few weeks, McDonald's became what McDonald's and then offered items at that location.



Ana:
00:24:41
Ah, Isekai, a popular genre.



Ana:
00:24:43
Okay, got it.



Ana:
00:24:44
But you see, even here, and I love that you brought this up, even here they have the special chili sauce.



Ana:
00:24:50
You know, they use that to tie it back to the actual product is.



Ana:
00:24:56
a collection, that middle of the pyramid, something that's going to excite the culture at that moment.



Ana:
00:25:01
And they're probably going to move away from it.



Ana:
00:25:03
It's never going to become like part of the menu, but it gives a, give them a, like a refrain in culture.



Rei:
00:25:11
Yeah.



Rei:
00:25:12
And this is, this is in your pyramid, the product universe pyramid, I would say it's not a foundation or collection.



Rei:
00:25:19
It's not a mass thing, but it's a hero, a limited amount of time in limited locations.



Ana:
00:25:26
And it says, like, you see, I'm at USA Today.



Ana:
00:25:28
because it says they actually use it to introduce a new sauce.



Rei:
00:25:32
right, right, right.



Ana:
00:25:34
You know, so that is show business again.



Ana:
00:25:37
I, I think it's a good example how they created this entire setting or universe, if you will, or a world for that one.



Ana:
00:25:45
But you see, I think you know what's really relevant, Ray, and I'm really glad that you brought it.



Ana:
00:25:49
They collaborated with anime, biggest names.



Ana:
00:25:53
You know what I mean?



Ana:
00:25:54
So they kind of like really went all in.



Ana:
00:25:56
Oh, manga inspired packaging.



Ana:
00:26:00
I love that.



Rei:
00:26:01
yeah, I thought this was an interesting example.



Rei:
00:26:04
I mean, I was thinking about that before recording, but as you were talking about, this came to mind because they were very smart in, What was happening in culture and then bring it into real world and then creating, leveraging it, you



Ana:
00:26:21
I mean, they pulled it back into the, they, they pulled culture into the product universe.



Ana:
00:26:26
So it goes both ways, really.



Rei:
00:26:27
Yeah.



Ana:
00:26:28
And it worked because it was very, organically part of the culture.



Ana:
00:26:32
If you have the real, what I was saying before, it was like, oh, they have anime masters already.



Ana:
00:26:37
They have already embedded fan group.



Ana:
00:26:39
They co created with fans and they did those things that they knew that anime fans are going to respond well to.



Rei:
00:26:45
Mm hmm.



Ana:
00:26:46
If they marketed this to me, it wouldn't work.



Rei:
00:26:49
Yeah.



Rei:
00:26:49
So they, it originates from a 1983 episode of Cat's Eye, which is a Japanese manga.



Ana:
00:26:55
You know what they did with Palace?



Ana:
00:26:58
They did t shirts, but the only way to access those t shirts, if you, you had to be in the know, because it was actually packaging.



Ana:
00:27:05
It was not advertised



Rei:
00:27:06
and, and, and,



Ana:
00:27:08
was packaging as advertising, and then from there you have a, like, a special destination, a microsite, or what, what, where you can shop.



Ana:
00:27:16
You can't shop it on Palace, you can't shop it at McDonald's site.



Ana:
00:27:19
So that's also adding that drop element of streetwear culture.



Ana:
00:27:23
It's not unique anymore, everyone is doing it, but I do think it's relevant that they thought about it.



Ana:
00:27:28
I think that the mechanics of discovery are very unique.



Ana:
00:27:33
To who is that targeted towards?



Ana:
00:27:35
Streets fans, anime fans, so on.



Ana:
00:27:39
Okay, key



Rei:
00:27:40
Just, yeah, just to wrap up.



Rei:
00:27:41
well how would you summarize this?



Rei:
00:27:42
What, what's, what's one takeaway from this?



Ana:
00:27:45
My one takeaway is that actually brand strategy includes marketing, product design, and merchandising all together.



Ana:
00:27:54
And the product should never be, like, the basically product strategy is also your brand



Rei:
00:27:59
yeah, yeah, I would say my, my takeaway and using that shrine example is subtract and elevate, That's what they did, basically, they had, you know, so many little like chachkis, right?



Rei:
00:28:13
And what they did was they minimized it to just a few items and then made them premium



Rei:
00:28:20
and then, then they expanded their product universe.



Rei:
00:28:23
So subtract and elevate.



Ana:
00:28:26
Yeah.



Ana:
00:28:26
Or for me, I mean, that's like basically the same thing.



Ana:
00:28:29
It's kind of like product strategy is brand strategy.



Ana:
00:28:33
That means what's your point of view?



Ana:
00:28:34
What's your filter?



Ana:
00:28:35
Why are you do exist?



Ana:
00:28:36
What's your promise?



Ana:
00:28:37
And how do you use products?



Ana:
00:28:38
Not just communication or content to deliver it.



Rei:
00:28:42
All right.



Rei:
00:28:43
Do you want to do the, the, the final hit list?



Rei:
00:28:45
What's, what's occupying you?



Ana:
00:28:47
Oh, my God.



Ana:
00:28:48
I have to vote today.



Ana:
00:28:49
Guys.



Rei:
00:28:52
you know, so, speaking of which, the thing that I'm, I'm trying to get off my mind is this website called polymarket.



Rei:
00:29:01
Do you guys know about this?



Ana:
00:29:02
Polymarket.



Rei:
00:29:03
Polymarket, it's called, it's a, it's a prediction market.



Rei:
00:29:07
So basically,



Ana:
00:29:09
You just infinitely stressed me out, Ray.



Ana:
00:29:12
Can



Rei:
00:29:15
random people betting who's going to win.



Ana:
00:29:19
I say it again?



Ana:
00:29:20
You just infinitely stressed me,



Rei:
00:29:21
I know, I know.



Rei:
00:29:24
So I've been looking at it and try not to look at it.



Rei:
00:29:28
But this is all the, the point that you have to go vote



Ana:
00:29:30
That's true.



Ana:
00:29:32
other thing that's like, let's have one more because,



Ana:
00:29:35
you know.



Ana:
00:29:35
So my thing is that I've been thinking about the luxury, industry a lot and how, like, you know, the results every quarter this year are coming in and they're like, no, no, no luxury is like imploding.



Ana:
00:29:48
Kering is going down in double digits.



Ana:
00:29:50
LVMH in single digit.



Ana:
00:29:52
Hermes is doing well.



Ana:
00:29:53
Prada is doing well.



Ana:
00:29:55
So, I started thinking, like, it's not a macroeconomic problem, it's not a geopolitical problem, it's not a growth strategy problem.



Ana:
00:30:02
It's actually the soft power of luxury problem.



Ana:
00:30:06
It's a cultural problem, because luxury lost its soft power.



Ana:
00:30:10
So now I'm analyzing that, and I want to publish it on Monday.



Ana:
00:30:14
But I've been thinking a lot, because, like, about ten years ago, I was, exploring luxury's new growth models, and that was even before the current fast growth.



Ana:
00:30:27
So I'm just trying to create a narrative that's basically saying luxury has always been about aspiration once, and it's not original thought, it's just more than that market is a lagging indicator of lost of that soft power, cultural power.



Rei:
00:30:42
Yeah.



Rei:
00:30:43
Yeah.



Rei:
00:30:43
So I, I had a few things in mind, but in response to.



Rei:
00:30:47
The point that you just made, the luxury market.



Rei:
00:30:50
I was talking to a friend of mine recently who went to some fancy dinner and it was, you know, rich people, important people, all of that.



Rei:
00:30:58
And my friend was sitting at a table of maybe eight people.



Rei:
00:31:02
And he said that, somebody at that table, somebody who's in, I don't know how old, you know, 50, 60, whatever.



Rei:
00:31:10
obviously quite rich, said, Oh, all I need in my wardrobe is Almez and Uniqlo.



Rei:
00:31:17
Yeah.



Rei:
00:31:17
And I thought it was kind of an interesting insight in that I think the market is going in two completely different directions.



Rei:
00:31:26
One is extremely high end.



Rei:
00:31:28
One is extremely affordable, but I think affordable in the case of Uniqlo versus H& M or even, scene, there has to be quality.



Rei:
00:31:39
Like Uniqlo has quality.



Rei:
00:31:41
Yeah.



Rei:
00:31:41
But it's very affordable,



Ana:
00:31:43
Yes.



Ana:
00:31:44
And I think that that already happened, like, let's see.



Ana:
00:31:47
Five years ago, seven years ago, something like that, that bifurcation.



Ana:
00:31:51
But you know what I think?



Ana:
00:31:51
And let's leave that for maybe, maybe that's a hook for the next time.



Ana:
00:31:55
I think the middle is coming back, but not like gap middle, J.



Ana:
00:31:58
Crew middle, big mall brands, but as a lot of smaller brands.



Ana:
00:32:06
whose price point may be above Zara and Uniqlo, and I know Uniqlo has good quality, so I'm not equating them, but Zara is increasing theirs.



Ana:
00:32:15
So let's say one above, 50, maybe 20 more.



Ana:
00:32:20
There is so many of them.



Ana:
00:32:23
So I wonder what kind of market organization is going to be there when, when you have so many options that are, you know, in between.



Rei:
00:32:30
Return of the middle.



Rei:
00:32:31
Maybe that's a



Ana:
00:32:31
The turn of the middle.



Ana:
00:32:33
Stay tuned.



Rei:
00:32:34
Good conversation.



Rei:
00:32:35
All right.



Rei:
00:32:35
See you in two weeks.



Ana:
00:32:36
See you in two weeks.