Five Brands to Watch in 2016
The new year will bring challenges and opportunities for brands around the world. Here are five brands that will be particularly interesting to watch.
Chipotle
Things are not going well for this high-flying restaurant chain. After a stunning run, the brand is facing significant safety issues, its healthy image battered by a series of outbreaks. Customers have become sick after eating at Chipotle restaurants in Washington, California and Minnesota.
There are two notable problems for Chipotle. The first issue is branding; every quality story that hits the news has an impact on the brand; people don’t feel quite as good about eating at Chipotle as they used to.
The second problem is more complex. Part of Chipotle’s appeal comes from local food sourcing and preparation. Food safety, however, depends on tight controls and standardization. In some ways local preparation and food safety are contradictory ideas.
Will Chipotle be able to address its quality woes and regain momentum? This won’t be easy. Investors are skeptical; Chipotle’s stock peaked in 2015 at $758 per share. It closed 2015 at less than $500.
Amazon
Amazon remains one of the great puzzles in the business world. The company is worth more than $300 billion, but it lost money in its most recent fiscal year. Amazon doesn’t pay dividends, either.
Things were really strange this holiday season. On top of free shipping and low prices, I could get 10% back on Amazon purchases when I used my Chase credit card.
Can Amazon continue to thrive as a non-profit institution in 2016? Or will investors demand some profits? If so, how will Amazon deliver these?
VW
VW was one of the most stunning stories of 2015; the company misled customers, employees and regulators in a bid to boost revenue and profit.
Will people forgive VW?
The company is taking a fairly combative tone so far, with its new CEO declaring that he will proceed with confidence. He said recently, “I don’t think I will get down on my knees. I will be self-confident.”
This approach isn’t likely to go well.
United
It is hard to think of a company facing greater challenges than United. Its new CEO is on medical leave, many employees are not happy, and competitors are providing a better product, sometimes at lower prices.
United is currently delivering profits due to low oil prices and customers being locked in by corporate contracts and its frequent flyer program. This isn’t enough to sustain profit growth.
If United is going to thrive, it needs a fresh start. There are some signs that the airline is headed in the right direction. For instance, it will now offer free snacks on long coach flights. In 2016, United will have to accelerate its turn-around.
Donald Trump
If there is one brand to watch next year, it is Donald Trump. The outspoken business-executive-turned-politician is attracting lots of attention and a certain amount of support.
At the moment, Trump appears to be too polarizing to have a realistic shot at winning the election.
The question: can Trump remain distinctive and dynamic while shifting his message to be more broadly appealing? This isn’t an easy branding shift, but if he pulls it off we might see a rather exciting election in November.
That 10% back when you use your Chase card at Amazon? From my experience in the credit card industry a little while back, I’d say it’s unlikely Amazon is paying for that (though they might chip in a little on short-term promotions). It wouldn’t impact their bottom line, except to make you more likely to shop at Amazon than elsewhere. Pretty much anything Amazon does with credit cards is going to be funded by the banks and should make money for Amazon. (That Amazon credit card marketplace where you get huge premiums for signing up for cards? The card companies are paying for the premiums and paying Amazon a hefty bounty for each card acquired there.)
The rest of the Amazon story, though, I have no explanation for. 🙂 But the same question gets asked year after year, it seems, and they keep rolling on.