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Last week Procter & Gamble announced the purchase of the retail chain the Art of Shaving. Stepping into retail might seem like a peculiar move for the consumer products company, but it follows a pattern of increasing innovation for the organization.

Back in 2005 P&G made a lot of noise when it bought Gillette. At the time, I was interviewed by BusinessWeek, which picked up on the innovative shift signaled by the $57 billion deal. [The article is available here: Branding: Five New Lessons.]

The deal made a lot of sense for P&G. Gillette was a master at marketing a cohesive family of products under one brand. P&G is growing in this area, extending brands like Crest into broad families of related products. Gillette also benefitted from the combination of innovative hardware paired with consumables — the razor and the blades. P&G has expanded greatly in this area with electric toothbrushes, Febreze air cleaners, Mr. Clean car wash kits and Swiffer wet mops.

So if putting hardware and consumables together and building product families can boost your brands, why not control even more of the consumer experience? The Art of Shaving deal could teach P&G some important lessons, but only if they do it right. Back in the 1980s, P&G picked up the Vidal Sassoon product line, but left the high-end hair salons alone. The brand languished, and Sassoon and P&G found themselves on opposite ends of a heated lawsuit. In retrospect, P&G might have missed an opportunity to explore the connection between product and service. A connection the folks at Starbucks exploited when they expanded from selling bags of coffee beans to serving the coffee in upscale bistros. When brands mix product and service, the resulting experience can increase customer loyalty, reduce price sensitivity and boost differentiation.

Given its position as the leading consumer products manufacturing company, P&G could content itself with sticking to the existing formulas and leaving the innovation to smaller, nimbler players. But with this entry into retail experiences, it looks like the company that invented brand management might just be on its way to reinventing it.



Hyundai Assurance Program

I can’t think of a major American corporation that doesn’t have one or more employees whose responsibility it is to gather consumer insights. So why are so few brands truly insightful about consumers in this turbulent economy?

It doesn’t take a rocket scientist to know that consumers are worried about the economy. Most studies like the Rasmussen Consumer Index show consumer confidence at a record low. But can you name any brands that are standing up to do something about it? Not many.

An example is Hyundai, which is responding to consumer anxiety by offering to let purchasers of new vehicles out of their contract if they lose their jobs. A great idea that seemed destined to be followed by other automakers, but the U.S. automakers have all been too busy lobbying for their own aid to think about lending a hand to their customers.

American Business seems to have adopted a victim mentality preferring to whine about circumstances beyond its control rather than demonstrate conviction and leadership despite adverse conditions.

Is there any reason Ford can’t announce a move to bring a percentage of its manufacturing back to the U.S., creating more jobs and stimulating the economy? What about Nike, or Target, or Dell, or P&G? Instead of eliminating hiring, what if they announced plans to reduce outsourcing so they could increase domestic hiring. Imagine how consumers would feel about a brand that demonstrated that kind of leadership!

Concern for internal issues shouldn’t keep corporations from turning some of their attention to brainstorming ways to help their customers and the economy. This is a time for decisive private action and those who participate in the solution will find themselves on top when prosperity returns.

Addendum: David Hartman, designer of the VCU Brandcenter’s logo and other works of graceful creativity, pointed out that Intel is bucking the victim trend by increasing its investment in the U.S. You can read about it here.