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Cracker Barrel was having significant revenue problems. So they thought the answer to that was not better financial management, but a rebrand. A 700 million dollar rebrand. And the rebrand failed. Cracker Barrel stock dropped sharply. They lost hundreds of millions of dollars in stock value. Rebranding does not fix revenue problems. Hello everyone and welcome to episode 306 of the Kate Show. Today I have a spicy topic for you and I'm excited to talk about it because ever since the Cracker Barrel rebrand fiasco, I have been keeping my finger on the pulse of this whole let's rebrand in order to grow phenomena. It is not all that it's cracked up to be. And on top of it, what's very relevant for the home industry is the fact that luxury is redefining itself. And, and in order to keep up with it, we do need to adapt our businesses. But rebranding is not necessarily part of that. And rebrand can often lead to failure and significant financial loss. So let's just get into all of it. So has anyone of influence in your life ever insisted that you rebrand your business as part of a growth strategy? I mean, I've got clients who come to me and they're like, yeah, I wanted to work with this one consultant. And they were just like, no, first thing first, we gotta rebrand your business, maybe even change the name, put your website on a different platform and just like upheaval the whole thing. And my client was like, that doesn't seem right. That doesn't seem like a growth strategy to me. And they're correct. It's not. Because while a gorgeous logo and a thoughtful color palette have some value, that's not the end all be all for attracting the type of clients that you want. Because pretty things attract people who like pretty things, not necessarily people who want to pay you the big bucks. And that's the end of it. So if your business is experiencing a lull, or if you're just trying to figure out what to do next, a rebrand is not going to be your golden ticket to success. It has actually proven to backfire. But the good news is if you find yourself struggling to go to the next level, you might just need to reposition what you currently offer or how you currently present yourself, not get a complete makeover. So today on the Kate Show, I'm walking you through the rebrand fiascos of giant, well known companies so that we can learn from their mistakes. I'm also sharing how the luxury client is redefining luxury itself and what that means for the future of your high end design, organizing or staging business. So let's just start with Cracker Barrel. I love me some Cracker Barrel. I do not go there often enough. But they're fried apples and their grits, everything, even their lattes are delicious. Everything is good there. I love the gift shop too, even though it's really overpriced. But Cracker Barrel faced significant revenue and traffic challenges for years with the customer visits down about 16% from pre pandemic levels. You know, you know, it's so sad how many businesses were damaged by that. So sad. Their new CEO had launched a major quote unquote transformation plan. And it included a high profile rebrand in 2025 that had a new minimalist logo and required every store to be remodeled and even changed the menu. Don't mess with the menu. Why would you do that? This effort was costing them around $700 million and it was explicitly intended to reverse declining sales. So let's just get this straight here. Cracker Barrel was having significant revenue problems. So they thought the answer to that was not better financial management, but a rebrand. A $700 million rebrand. What? People are just people, even if they run big companies, okay, Sometimes we make mistakes. And understandably, critics, including myself, argued that it was the wrong way to handle it because a flashy cosmetic change over addressing core operational issues. It was foolish. Address food quality, value pricing and other fundamentals of business. Look at your profit margin. Fix that first, you know. And the rebrand failed. It did. Not only did it fail, but it was largely reversed. After all the backlash, even the original co founder of Cracker Barrel, Tommy Lowe, said it was a wasteful distraction from fixing the actual business. Like how embarrassing. Cracker Barrel stock dropped sharply. They lost hundreds of millions of dollars in stock value and their traffic and sales declined even more. The company had to cut guidance in subsequent quarters. Leadership later said they underestimated people's attachment to the original brand. They were so out of touch. They were so out of touch. And in this episode, I really would like to make the statement that rebranding does not fix revenue problems. That should go without saying, but apparently I have to see if it's the people over at Cracker Bale because they did not know. What the heck, so many of us running small businesses know that. But Cracker Barrel is not the only one that's having some issues here. Adidas versus Nike, okay, they've always been in competition. But it's interesting what's happened in the recent year. Or two. So Nike has long embodied a me first brand identity. So just do it. You can do it. Don't quit. And it's centered on the individual, on personal athletic excellence and triumph and aspiration. Not, not terrible. But this was so built into their culture that it didn't change when culture shifted. And Nike's self focused positioning began to feel disconnected and too me centric. And that eroded its reputation and its emotional relevance. So again, emotional relevance comes back up. Just like with Cracker Barrel. Don't go messing with what works and also follow what works. And Nike didn't do that. So in contrast, Adidas has successfully leaned into a we break brand strategy, which more so matches where modern culture is headed. It emphasizes community and collaboration and shared purpose. Cultural precipitation, precipitation. It has organic trends. It uses influencers and creators. It includes storytelling and partnerships. And Adidas really made itself a team player. And it emphasized that rather than solitary achievement, the we approach helped them kind of, to borrow a phrase, capture the moment. And that boosted its reputation, its value. It's got stronger sales and it is closing the gap with Nike, despite Nike being bigger. So you don't really have to be bigger to win. And this me versus we divide explains a lot of the recent momentum Adidas has been experiencing. And Nike is now like, oh, crap, they're in turnaround mode. They're trying to rebuild and. And Adidas is just riding this wave that they're on and loving it. So something to bear in mind, make sure your brand is in touch with who you're trying to reach. But there's more. There's Jaguar in 2024. Jaguar also rebranded. They went new, they went minimalist, just like Cracker Wheel tried to. And their brand identity became bright pink and monochrome. Yuck. Okay. Nothing about that says Jaguar. And their fashion forward ad campaign that came with the rebrand was even worse. It did not feature a single car, just models and abstract vibes. Okay. Now they're, they're marketing based off vibes. Great. The goal was to reposition them as a modern electric car brand. But it was mocked because it erased its luxurious British heritage. Like, why do you go messing with things that are working? Why do that? Why must every logo suddenly become modern and minimalist? Critics, including Elon Musk, regardless of how you might feel about him, said the whole thing was out of touch. Which is true. He was way out of touch. And under the parent company, Jaguar Land Rover, the brand had become a financial drag. So their sales actually dropped sharply, which is kind of awkward for Jaguar. They were selling about 180,000 units in 2018, and by 2023, they were only selling about 65,000. That is not great, guys. That is not great For Jaguar, they were losing money per car, while Range Rover and Defender models were highly profitable. So the brand's traditional customer base, which is older, affluent buyers, I think I read somewhere that was largely men. They wanted the performance, luxury vehicles, and they're now losing to rivals like BMW, Porsche and similar. So stay relevant, stay relevant. The strategy behind this rebrand was based on the wrong information because they were trying to create what they called the reimagine planned plan. And it would be about Jaguar becoming a purely electric car company starting in 2025 or 2026 and targeting younger, wealthier, first time Jaguar. Owners and executives of Jaguar called it a complete reset to escape the traditional automotive stereotypes. So their little taglines became delete ordinary and copy nothing. Which, you know, that is a phrase they got from their founder, Sir William Lyons, but I don't think it means what they think it means. The minimalist logo and not showing any cars in the advertising, the bold vibes were meant to showcase this dramatic break from what Jaguar used to be into what they wanted to force it to be because they wanted it to feel a little bit more like Tesla, and it didn't go well. In short, their rebrand did generate attention and it also generated widespread backlash from its original audience, which is the audience that gave it the success it has today. So it was just really, really out of touch. But with that being said, you know, with Jaguar being a luxury brand that still failed and at a rebrand, because it was done so thoughtlessly and unintentionally, that does bring up the next question. Well, what is luxury? Well, it seems that luxury is a moving target and that's something that you need to be aware of in the home industry, because interior design, staging, organizing, custom window treatments, those are all luxuries. Now, sure, in marketing, we can position it as more of a need than a want, but really, it is luxury. Okay? And that's okay. It's okay to offer a luxury service. But here's what you need to understand. We are currently living in a K shaped economy. And I have an excerpt from Pam Danzinger on the state of luxury that I'm just going to read to you because she's way more qualified to speak into this than I am, so bear with me here. We are currently living in a K shaped economy, which describes a widening gap among income groups. The case splits into two groups so imagine a capital K K looks one like that and they're going in opposite directions. One segment, you know, the upper line of the K is moving ahead, while those on the downward trending line keep falling further behind. And there's a group in the middle who are treading water. Now, retailers or service providers might assume that if they have the attention of high earning clients, they'll do just fine. But a new report from the Kearney Institute reveals that dividing the consumer market between the conventional haves and have nots is too simplistic. It fails to account for how consumers really behave. And as someone in the home industry who's running a business, you have to understand how consumers are behaving. Pam goes on to say, planning based on the simple K shape puts real retailers at a risk of mixing the full picture. And I would say the same is true for the home industry for the foreseeable future. Millennial Henry's Henry H E N R Y stands for high earners. Not rich yet will be the consumers that every brand manager, marketer and retail exec will need to know. Well, it's a segment of the largest generation of Americans with more discretionary income than the rest of the cohort today and poised to acquire more money in the future. These are the millennials that matter most to brands today and tomorrow. This subset of the largest generation of Americans earns between 100k and 250k, the income cohort that accounts for 40% of all household spending. Most important, however, these are the consumers who are on track to become the ultra affluent of the future. Ultra affluent meaning earning over a quarter million dollars a year. So I thought all of this was highly interesting because if we have a widening gap between who can afford what and if on top of it, people who can afford something aren't necessarily more likely to buy, it doesn't mean that luxury and businesses are safe in an uncertain economy. And let me tell you why. So Katie Thomas of the Kearney Consumer Institute had this to say. The K shaped economy is not necessarily wrong. It's just incomplete. Income alone no longer predicts who is stressed, who is vulnerable, or who is willing to spend. Interesting. It does not predict who's willing to spend. Two consumers earning the same salary can respond in completely different ways to the same price increase or economic shock. Understanding today's consumer requires moving beyond labels and averages to the lived realities that shape how people decide, side defer, and occasionally splurge. Brands that can do that will be better prepared not just for volatility, but for whatever Version of normal comes next. So just because you're targeting affluent clients with your design services doesn't mean those clients are just going to be like totally cool with spending the same amount of money. Their reasons for investing are changing. And as long as you know what their reasons are, you'll be just fine. But if you turn a blind eye to how culture is shifting around you, you will find yourself in the position of Jaguar, Cracker Barrel and Nike. And that's really not a great place to be. So the outlook for luxury design, organizing and staging is something to keep an eye on. Because while luxury level products like Gucci bags, fancy watches, like, I don't even know these brands, while those sales are pretty flat right now, things like interior staging and organizing are growing nicely because wealthy people are focusing more on making their actual homes feel amazing. So the high end design market is currently worth 78 to 85 billion and is expected to more than double to 174 to 185 billion by about 2034 or 2035. So in North America alone, it's projected to grow from around 25 billion to 60 billion between 2026 this year in 2023. And all of this information is according to Business Research Insights, Econ Market Research and Credence Research. Not just making up random numbers here, Home staging still delivers strong results in the luxury real estate market. We know this stage. Homes are selling for 73% faster and for 8 to 10% more money, sometimes even 9% above asking price. And in some cases, sellers are seeing a massive return as high as 3,551% on what they spent on staging. So we know that still works. But you have to understand someone's reason for wanting to hire you for staging or hire you for design. Now let's talk about organizers. So this industry is growing fast. The professional organizing market is worth about 12 to 13 billion right now. And it's expected to reach between 21 and 40 billion by the year 2033 or 2035. Somewhere in there, there. And that's according to Coherent Market Insights, Business Research Insights and Sky Quest Reports. So there's a lot of growth here. I'm excited. I'm excited for you guys. But you have to be ready for it. Build the boat that can ride this wave. Because if the boat can't ride the wave, the wave continues without you. So what is your plan then for your design firm, for your staging business, for your organizing business? Well, if you are struggling financially right now and you're hoping this new Wave of growth in the, in your industry will carry you through to success. Not necessarily. You know, you have to actually captain the ship. And rebranding because you can see the luxury market changing will not magically improve your revenue. A revenue problem is a revenue problem. Not liking the colors of your logo, that's a branding problem. So my advice to you at this point is to reposition what you offer so that it clearly illustrates the emotional and literal transformation that you deliver for clients. Because remember, luxury and up and coming luxury homeowners value experiential luxuries, luxuries that are part of their lived daily experience. Now, of course, this is easier said than done. It has to be done consistently over time. And repetition of brand message is the only way you're going to be able to reach your ideal client. So, so know who your ideal client is and know what's important to them and know their reasons for hiring you and then communicate that back to them on your website, in your email. Marketing. In any sort of marketing avenues that you have, don't worry about selling based on price, don't worry about running a sale, don't worry about offering some sort of discount for referrals because that does not matter to the client you're trying to reach. What matters to them is that you understand them. That you understand they might have tons of extra money doesn't mean they're comfortable spending it. And when they are comfortable spending it, they need to understand that you will help allocate it wisely. In short, don't rebrand just because you need more clients. If you need more clients, change how you're running your business and how you're marketing. Only rebrand if your existing brand is out of alignment with the homeowners you're trying to reach. So it is important to stay in alignment, otherwise you'll be like Nike. Okay, Nike was in alignment, did not stay in alignment with their brand messaging and this has nothing to do with their logo. They didn't need to rebrand, they needed to stay current. And that's what you need to do right now. So reposition what you offer. That way it illustrates the transformation that you deliver. And, and it's so important that you are feeding search engines and AI the right information via blog posts. Especially because the blogging is a great way for you to tell the Internet world what you're all about. So that you can be recommended in Grok Conversations in Gemini or ChatGPT. And it's also why regularly communicating with your current contact list via email newsletter is also so effective because how do you expect these luxury and up and coming luxury homeowners to want to work with you if you do not do your part or more than your part to facilitate and nurture a relationship with them because they are into experiential or their lived daily experience luxuries? So you need to become part of their everyday right now through your marketing. All right guys, I know that was a lot, but if you would like to discuss this with me further, we can talk about it as it relates one on one to your business, your brand, your future. You can do that by going to kathesocialite.com, scroll all the way down to book a discovery call and marketing audit with me. And I look forward to speaking with you. But until then, keep your marketing simple, your message clear, and I will talk to you soon.