Long ago – not so long ago, actually – there were a number of well-regarded regional department store chains in the U.S.  Among many others were Filene’s in the Northeast, Hecht’s in the Mid-Atlantic, Chicago’s Marshall Field, Seattle’s Frederick & Nelson.  With the 2005 acquisition of May Stores by Federated Department Stores, these chains were folded into the giant that is Macy’s and it was announced that all the regional brands were to die and only Macy’s would remain from coast to coast.

Apparently the assumption was that one brand would automatically be stronger than multiple brands, even if the subordinate brands had stronger and more positive identities than the parent company.  Now I wouldn’t want to say that the person making that decision had the brains of a flea, but it is rumored that he or she can jump very, very high.  So all the regional brands were lined up and shot, and with them died generations of local shopping traditions and strong consumer loyalties.

And the financial results of the brand massacre?  By August of 2007 Macy’s profits dropped by more than 75% and it was being eyed as takeover fodder.  Forbes.com remarked with characteristic dryness, “…the turnaround of the former May stores has not progressed as well as expected.” Some of us were less than surprised. 

So did anyone out there absorb the lesson of this rather stupendous branding disaster?

According to the Seattle Times of July 16th, some stand-alone neighborhood cafes in the greater Seattle area have been experiencing a very annoying phenomenon.  Groups of white-coated individuals with clipboards have been crowding up their stores, taking notes, and failing to buy anything.  Further investigation revealed that the unhelpful hordes were all issuing from the same source; turns out that coffee giant Starbucks was researching the competition preparatory to trying out a whole new kind of branding.  Or perhaps we should call it…un-branding? 

Instead of closing some under performing outlets in Seattle neighborhoods, the 16,000 unit chain is re-engineering them – new décor, similar but not identical product mix – and a new name.  For each store.  Starting with the new 15th Avenue Coffee and Tea, every one of the pilot locations will be named for the specific neighborhood in which it stands, with Starbucks vowing to extend the approach nationally if it proves successful. 

There are a couple of caveats here, especially for large organizations considering differentiated sub-brands.  First, a  faux-local institution can’t be as genuine a brand as are the clipboarded victims of this story.  Certain aspects of chain behavior would be dead giveaways and could possibly engender customer derision and scorn instead of the warm fuzzy "local ownership" feelings that are intended. 

Second, effective market research involves the entire customer experience – including purchasing and using the competitive product.  The mental picture of the white-coated horde, interrupting and possibly even temporarily erasing the genuine local ambiance while attempting to record its features, and then declining to even taste the product, does not fill me with admiration for the research chops of whoever planned this little exercise. 

Nonetheless,  Starbucks’ initiative could be the first sign of a Continental Divide in retail branding: the first acknowledgment by a giant, successful brand that small, localized brands might actually have greater potential than a globalized identity to connect with consumers.  That the consolidation and centralization themes of the industrial revolution might have natural outer boundaries, beyond which they are counter-productive.  That consumers are becoming suspicious of largeness and bored with sameness, and are looking to identify with both products and presentations that reflect something of their own particular place and time.

Imagine that.  Consumers respond to a brand identity with which they can…identify.  Who would have guessed?  Not the folks at Macy’s.