Acknowledging their grocery roots, Kroger chose the name after the popular party snack. Company materials say that Dip apparel is “simple, fresh and goes great with everything.” Dip clothing, like the food product it is named after, is designed to be a grab and go collection. Customers can buy a few groceries and then “dip” into the next aisle to get some clothing.
Joe Mimran has a long history in the fashion industry having worked with Club Monaco and Pink Tartan clothing lines. But his most relevant experience is with Joe Fresh, a fashion brand Mimran created for the Canadian grocer, Loblaw. Similarly to the rationale behind Dip, Joe Fresh brand built on its “fresh food” image to now stand for fresh fashion. Joe Fresh has had a somewhat colorful introduction in the U.S. In addition to a flagship store in NYC, Joe Fresh was introduced as store within the store in 2012 at J. C. Penney’s by Ron Johnson during his short-lived career as the store’s CEO. In 2015, the Penney’s deal expired and the NYC store closed.
Strategically, Kroger’s foray into apparel makes sense. Currently sales at Kroger’s for general merchandise (all products other than food) is only about 4%. But some consultants believe the percentage should be closer to 20%, since Kroger is facing strong competition from Walmart, Target and Amazon, all of whom sell both grocery and general merchandise allowing consumers to conveniently fill all of their needs in one shopping trip.
The strategy makes sense, but is Dip the right brand name? Branding theory suggests four reasons why maybe not.
The first rule of branding suggests that any new brand name should be vetted for negative connotations. While the official press release suggest many positive uses of the word dip, a very casual top-of mind association of dip suggests a dumb person or maybe something even worse, obviously not positive. This difference differentiates the brand name, Dip, from Joe Fresh, which, on the contrary, has only positive associations.
The second rule of branding suggests that the endorsing brand, which is Kroger, should add value to the endorsed brand, Dip. Here the asymmetry between Amazon and Walmart going from apparel to food versus Kroger going from food to apparel becomes apparent. A food brand endorsing a clothing brand is, how can I say it, unappetizing.
The third rule of branding suggests that the extension should bring value back to the main brand. It’s clear that Joe Fresh can bring “hipness” or “newness” back to Loblaw. It is less clear whether or not “Dip” adds value back to Kroger, but it seems unlikely.
The final rule of branding suggests that any new brand in the constellation of brands should add relevance back to the whole system. This is not clear; if consumers embrace the new apparel line, and ultimately build loyalty to the brand “Dip,” driving traffic to the store, then the whole ecosystem of Kroger wins. This is hard to call, it will be a function of the consumer acceptance of the design of the new product line. If that happens then Dip could become a “hip” brand name. In that case it will be the value of the product line, the aesthetics and the fashion and the merchandising that build the brand, rather than using a strong brand name from the get-go to add value to the product.