Assignment
In November 2019, Shannon Washburn took over as CEO of Shinola, a luxury watchmaker and purveyor of stylized, retro-chic, and hipster-cool products, including timepieces, jewelry, eyewear, leather bags and accessories, bicycles, and turntables and audio equipment. Washburn had worked closely for years with founder Tom Kartsotis. Several issues awaited Washburn and Kartsotis in 2020. By 2018, 35-45 percent of the company's sales were coming from the state of Michigan, where the company maintained six stores. With aggressive goals to grow to 75-100 stores, consumers and store employees, many of whom had never been to Detroit, would need to become familiar with the Shinola brand narrative.
Shinola emphasized artisanal craft and manufacturing in its brand storytelling, defining itself as a luxury brand dedicated to crafting long-lasting products of the highest quality. In its brand narratives, the company stressed that an average of 100 staff (approximately 20 percent of its employees) worked in manufacturing in the firm's in-house factory. Throughout its retail stores and on its e-commerce website, images of Shinola craftspeople are accompanied by descriptions about their particular skills and a count of the number of people involved in the production of any one item. The company was proud of its workforce; a sign in one of its retail stores signaled its philosophy, reading, "A true manufacturing company is built not by the things it makes. It's built by the people who make them." Explained former chief marketing officer Bridget Russo, "Provenance is important to the consumer, not just where a product is coming from, but the story behind it. Detroit fits perfectly into the fabric. The more we talked about Detroit, the more it made sense. This is an iconic city built over decades, a brand unto itself."
Not all of Shinola's products were made in the Detroit factory, or even by the firm. Shinola's watches were assembled using components from Switzerland and other countries, while other products were produced by brand partners nationally and internationally. The firm stressed that its products were designed in-house and made with the finest materials, even if they were not all produced by Shinola (or in Detroit). These types of sourcing decisions were driven by both cost advantages and, for many post-industrial nations, a lack of access to skills that had long since declined at home. However, for craft products, such as fine wines or mechanical watches, value has historically been embedded in the making activity, and relies on traditional knowledge and specialized skill. These industries often remain embedded locally as they draw from a rapidly disappearing pool of resources (skilled craftspeople, supporting institutions, raw materials, and specialist suppliers). Detroit's decline as a manufacturing hub however meant these resources were in short supply.
Detroit's history was one fraught with triumph and tragedy. Although its heritage lay in mass manufacturing and the home of the Big Three auto brands (Ford, Chrysler, and General Motors), from 1950 the city began to decline. On July 22, 2013, the City of Detroit, carrying $18.5 billion in debt, filed for bankruptcy in the largest municipal collapse in US history. Subsequently, Detroit became a byword for urban failure, characterized by high unemployment, declining public services (including transportation, policing, health care, and fire services), extreme poverty and inequality, and population loss.
Race was also central to Detroit's history. Tensions between white and black Americans accompanied much of the city's decline and rebirth. Prolonged racial conflict led to "white flight" from the city center, from a population that was 84 percent white in 1950, to 54 percent white in 1970, to 11 percent white in 2010. Racial tensions also characterized labor relations. By 1967, Detroit had evolved into a city with the largest and wealthiest black middle class in the USA. Post-bankruptcy, a narrative of revitalization emerged, with claims that Detroit was now the "Comeback City" and a hub for start-ups. However, assessments of this revitalization are mixed, with many suggesting they reflect Detroit's enduring racial divides. The creative sector is overwhelmingly white, and 70 percent of the regeneration activities are carried out by whites in a few select neighborhoods. Detroit today remains a city of contrasts, with gentrifying areas driven by mostly white, college-educated millennials, and the rest left dormant, living in economic insecurity and for whom the American Dream of upward mobility through hard work is largely inaccessible (Apel 2015).
As Washburn took the reins of the company, the company was drawing fire from various cultural critics. Contemporary artist Rebekah Modrak created an art piece in protest of the company called "RETHINK SHINOLA" in which she questioned the motivations for and extent of Shinola's commitment to Detroit and to its workers, engaging politically-charged issues of commerce, consumerism, labor exploitation, white privilege, power, and racism. Within Shinola's brand narratives about the company's role in Detroit's economic revitalization, she revealed power dynamics fueled by race and patriarchy and the exploitation of Shinola's employees and Detroit's misfortunes for the company's gain. She explained, "Shinola sells themselves as the intrepid white savior civilizing the 'wild' environment (their words). This is nothing to celebrate. These are white Texans making a profit off the 'saving Detroit' narrative." A summary of the work described it as follows:
RETHINK SHINOLA is an Internet-based artwork analyzing luxury-goods company Shinola's brand messages. Shinola purchased their name from the former Shinola, a shoe polish company that promoted their product using racist caricatures of African Americans. The 'new' Shinola company planted itself in Detroit and leverages and profiteers from the extreme conditions and image of the city. The company creates representations of patriarchal whiteness to enforce perceptions of their 'leadership,' and circulates images and narratives of African American employees being grateful for this so-called governance. Shinola's executives have referred to themselves as 'ambassadors,' using the language of [Christopher] Columbus and the narrative of the civilized savior who first identifies with and then tames the natives. RETHINK SHINOLA is not meant to be a linear formula to this problem but a way of looking at, unpacking, and addressing these complexities. The work was made in consultation with artists, activists, Detroit historians, labor organizers, and race scholars.
Others piled on. An Inc. writer proclaimed, "With Shinola, Kartsotis has performed a near magical marketing act-creating an artificial heritage brand by co-opting others' rich American histories. He won't reveal the secrets of his particular style of marketing theater, but he leaves enough breadcrumbs to piece it together." And a Belt writer claimed:
The problem with Shinola is that it tugs at our morals from both ends. On one side, an internationally recognized luxury company chose to headquarter itself in one of the most industry-starved cities in America. On the other hand, Shinola represents the most ugly realities of consumerism: they are profiting off the romance of poverty. There is no debating that in the Shinola fairytale, they are the heroes. And Detroit does not want to be saved.
In 2019, Green Book director, Peter Farrelly, gave an unexpected shout-out to Shinola in his acceptance speech at the Academy Awards, claiming, "Shinola watches ... it's unbelievable, they're saving Detroit," triggering a wave of outrage. Detroit's US congresswoman, Rashida Tlaib, was quick to respond on social media: "Say what? Please stop with this disrespectful & hurtful narrative that we 1) need saving & 2) that billionaires are the ones to do it. We just need the 1% to stop taking our land for nothing + shifting our tax dollars towards for-profit development that makes them richer."
To make matters worse, the US Federal Trade Commission (FTC) also had questions, and in 2016 investigated and then fined Shinola for its "Made in Detroit" and "Where America is Made" claims. In order to qualify for a "Made in the USA" claim, a company must make 100 percent of a product's parts in the USA. Given that Shinola's watches were assembled in Detroit from parts made in Switzerland and China, the FTC ruled that the company was falsely advertising the origins of its products and ordered them to cease and desist from using those phrases in their marketing materials.
Task
A. Describe the nature of Shinola's two authenticity crises. Which authenticity norms have been broken?
B. Assess the relative impact on the brand of the RETHINK SHINOLA campaign and the FTC ruling. What is each doing to the brand's authenticity claims? Which has the greatest potential to harm the brand (and with whom)?
C. How should Shinola respond to the FTC ruling?
D. How should Shinola respond to RETHINK SHINOLA?