Bankrupt City

Detroit's history of industrial decline and financial failure has culminated in bankruptcy. So why have some companies been using the city's name to sell their products?

Detroit's woes are well documented - an economic powerhouse reduced to a shrinking, impoverished and decaying shell of its former self.

It is a story one might expect marketing and branding departments going out of their way to avoid.

But several companies have been trying to turn the brand of Detroit to their advantage, in a trend that marketing experts expect to gather pace.

The most striking example is Shinola, a resurrected shoe polish brand now being used to sell watches, bicycles, leather goods and journals, which plays heavily on its Detroit base.

The company, backed by the financial muscle of venture capital firm Bedrock, says it is the first in decades to produce watches on a large scale in the US. It uses local labour and, where possible, materials - though it sources many watch components from Switzerland and China.

The timepieces have been on sale for about six months in sleek stores with exposed brick interiors in Detroit and New York, but also in shops throughout the US, and in Paris and Singapore. London will be next.

"Across the board it's gone extremely well," says CEO Steve Bock. The company has made some 50,000 watches, which are priced at $475-$850, and says it is struggling to keep up with demand.

One stockist, the Tiny Jewel Box in Washington DC, says it has done a brisk trade, selling more than 60 of the watches since October.

Having "Detroit" on the dial was a source of fascination and pride for many customers, said watch seller Steven Katz. "People would be less likely to balk at the price because it's made in America."

Colette luxury shop in Paris began selling the watches in November and has parted with 50 to 100 so far, for up to 600 euros each. The store's PR manager Guillaume Salmon says the story of Detroit was one of the reasons behind the move.

Shinola's factory is in the former Argonaut building, once General Motors' first research and design studio and now owned by the College for Creative Studies.

Detroit's cheap rents and post-industrial spaces had already been attracting innovative businesses, generating a local buzz.

But before launching, Shinola's backers wanted to test the broader appeal of "made in Detroit", and created focus groups in Dallas.

It found that people seemed keen to give the economy in Detroit, and the US, a hand.

"There's great interest in buying products made in the United States, and I think when we talked about manufacturing products like leather and watches in Detroit that absolutely piqued people's interest," says Bock. "They were very interested in seeing the city rebound."

That marketing opportunity has not been lost on others.

GalaxE.Solutions is a healthcare IT company based in New Jersey that expanded its workforce in Detroit - currently 150 people - after judging that it made economic sense to be in the city.

The company created the slogan "Outsource to Detroit", to encourage others to join a burgeoning US-based IT hub rather than using cheap but sometimes unreliable labour overseas, says CEO Tim Bryan.

That's part of a broader reported trend of businesses being moved back to the US. Figures just released show that in November the US trade deficit fell to its lowest level in four years, a result partly attributed to rising consumption of US-produced goods and services.

GalaxE.Solutions' promotion of Detroit created lots of positive publicity, says Bryan. "The excitement around the renaissance of Detroit is a national phenomenon."

Tim Calkins, a marketing professor at the Kellogg school of management says Detroit is seen as an underdog and its financial misfortune has become an opening for companies.

"If you associate yourself with Detroit, you're associating yourself with a struggle, with managing through difficult times," he says.

Your brand "becomes a brand you want to root for, and a brand you hope will be successful".

Detroit's recovery has a long way to go. But the recent upturn in the sector that has long determined the city's fortunes, the auto industry, has given a big boost.

Chrysler, one of America's "big three" car companies along with GM and Ford, has also made Detroit a focus of its marketing.

The company, which was taken over by Italy's Fiat after a US government rescue, ran a TV advertisement in 2011 called Born of Fire, which starred Detroit rapper Eminem and ended with the slogan "Imported from Detroit".

The advert ran during the Super Bowl, won several awards, and generated more than 15 million views on YouTube when originally posted.

Chrysler's chief marketing officer, Olivier Francois, said the company had chosen to emphasise Detroit because "it's come to stand for a certain resilience".

"It stands for a brand of determination and a general refusal to quit."

Detroit's ties to the auto industry have also lent it an appeal as the "real man's city", says Scott Galloway, who teaches marketing at New York University's Stern Business School.

Detroit "reeks grit and toughness", he says, an association that is strongly male but can appeal to both sexes.

"Associating with a product that makes you feel manly or masculine is an incredible asset, and right now there is no more macho city than Detroit."

[Via BBC]