Burnett Backs Retail Chain’s Repositioning

Service Merchandise continues to be a discount retailer with 350 stores in 34 states. But the Nashville, Tenn.-based chain has spent the past four months changing almost everything else about itself, including its marketing, in preparation for a major relaunch this month.
The company is replacing its traditional store format, where customers would browse a catalog showroom and check off items on clip- boards, with a new self-service approach. The merchandise itself has become more upscale, with a greater emphasis on household products and jewelry. And its huge annual catalog is being phased out in favor of slimmer monthly catalogs to allow for seasonal bargains.
Service Merchandise’s broadcast advertising from Leo Burnett in Chicago has also been transformed. It carries a new marketing tagline, “Discover the new merchandise” (replacing “One stop. Done”), and a vibrant red background common to all new advertising for the chain. The TV work also has a more subtle and more confident tone, said Ed McKeaney, senior vice president for marketing and advertising. One spot shows a diamond ring on a woman’s finger, followed by the superimposed words (against a red background), “What a waste,” then a shot of both her hands, and finally the superimposed kicker, “Of nine perfectly good fingers.”
Service Merchandise spent a total of $28 million on advertising in 1997, of which about half went to broadcast work from Burnett. While the company is using more direct mail and newspaper inserts, McKeaney said he expects broadcast spending to increase only slightly, and with greater weight in a smaller number of key markets.
“We’re still evaluating what TV does for us, what the lift is, and how best to use it,” McKeaney said. “Last year we spread it too thin.
“Our first goal is to reassure our loyal customers that we’re still the retailer they know, and from there to move to prospecting for new customers. ”