Marketing Authenticity: Shinola's Convoluted History
Marketing Authenticity: Shinola's Convoluted History
- Words Gunner Park
- Date May 03, 2019
“You don’t know shit from Shinola.” While originally a reference to their top of the line shoe polish, the brands provocative World War II-era tagline is now more relevant than ever. With its ability to corner the market for all things “American,” the Detroit-based watch, accessories and leather goods company has managed to define itself as the new standard of American luxury at breakneck speed. No longer simply shoe polish produced by the American Chemical Manufacturing and Mining Company, today Shinola is one of the most successful crossover lifestyle brands in the American market.
Only a few years ago, Detroit’s inner city blocks were on the cusp of forming a new skid row. The city as a whole was on the verge of bankruptcy. Things, however, are changing. The blocks surrounding Shinola’s hangar-like retail outpost are now brimming with Brooklyn-esque home goods retailers, selvedge jeans boutiques and farm-to-table restaurants that have earned the Cass Corridor neighborhood the title of, “the luxury retail mecca of Midtown Detroit.” There is no doubt that Shinola’s Detroit presence is at the heart of this new commercial boom. With the announcement of a chain of Shinola hotels and the further expansion of specialty boutiques Shinola is ostensibly leading the pack in reestablishing Detroit as a manufacturing hub and center of American commerce. However, while Detroit—and the city’s apparent well-being—is central to Shinola’s brand image, contradictory business practices and questionable ethics have led some to to argue Shinola in fact exploits Detroit and it’s storied history as a mechanism to drive sales.
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While wholly associated with Detroit, Shinola was actually founded in 1877 in Rochester, New York. Originally the grandly titled American Chemical Manufacturing and Mining Company, the small firm began as a carpet-cleaning business using a “patent steam air blast process.” The firm manufactured other speciality goods as well, including the Famous Handy Box French Shoe Blacking, Wood Box Stove Polish, Shole’s Insect Exterminator, Lusterine Cake Stove Polish and Queen’s Shoe Dressing for Ladies’ and Children’s Shoes. A young man who worked for the firm, George Melancthon Wetmore, showed immense interest in waxy polishes and while learning to how handle crateloads of the substance became increasingly fascinated with the product’s make-up. He quickly discovered that lacking necessary bonding properties and cheaply produced, the company’s polish was simply did not stick well. Additionally, as 95% of boot and shoe wax was black, it often contained excessive graphite or carbon which damaged the integrity of the footwear. Wetmore knew he could design a better product and in his small basement laboratory, he devised a superior formula. Seeking a suitable name for his shiny concoction, he settled on “SHINOL’A,” with a small squiggle separating “L” and “A.”
In 1886, Wetmore became the firm’s vice president. Growth was gradual as the improved product was slowly distributed and accepted by consumers. He later partnered with the Monroe Novelty Company, to manufacture products that accompanied the shoe polish such as daubers, shoe brushes and wooden and pasteboard shoe boxes. Shinola became a marketing marvel of sorts, with their proprietary Shinola Home Set a staple for American men. The set included a handy bristle dauber and a small, round container of Wetmore’s wax. The tin color’s—a warm ensemble of gold, dark green and red—were well-received, especially considering the predominantly black graphite-heavy competitors. Wetmore even secured the patent for the traditional lid closure and chose to attach the patented key to the rim of the tin.
By 1917 the firm was simply known as The Shinola Company. With the advent of World War I, Shinola wax was distributed throughout the globe, including Europe, Mexico, Central and South America, the West Indies, South Africa, the Dutch East Indies, the Philippines, and even Japan, China and Siberia. Young soldiers, many of whom came from rural areas, arrived at military camp with their local farm wafting from shoes. Sergeants then demanded recruits find the nearest PX to acquire a can of shoe polish—naturally, that was Shinola. Following the war, Shinola became, “the largest industry of its kind in the world.”
On June 10th, 1923, Wetmore passed away. The company was sold to out-of-town interests, initiating a long-chain of acquisitions and exchanges. The firm became part of the 2 in1-Shinola-Bixby Corp. with plants in New York and Indianapolis. The F.F. Daley Co. was also associated with the shoe polish firm and continued to market Shinola until the 1940s. By then, Shinola was sold to World War II GIs as a product of Best Foods, Inc. The company sold cans of “New Shinola Wax,” with a revised formula and a handy applicator included inside the can. The final trace of the original Shinola is a tin containing Leather and Saddle Soap. Dating to the 1950s, this was the final Shinola-branded product released by Best Food, Inc. Considered a crucial component to maintain your premium leather dress shoes, as elements of the classic sartorial uniform began to go out of vogue, shoe polish did as well. With its flagship product considered largely irrelevant, by 1960, the Shinola brand flopped and ceased to exist for several decades.
For over fifty years, Shinola was largely forgotten. That was until 2011, when venture capitalist Tom Kartsotis bought the rights to the name—for supposedly just $1 million. Kartsotis, who had spent his entire career seeking creative ways to boost the value of ordinary products, was perfectly suited to transform a forgotten American icon into a premium behemoth. Kartsotis began his career in his early 20s, when he ventured to Asia with a plan to import cheap toys. Following a tip that the market for moderately priced Asian-made watches was growing, Karsotis sunk $200,000 he earned through ticket scalping to open Overseas Products International, a Hong Kong-based watch importer. However, a series of Life and Look magazines from the 1950s inspired Kartsotis to rebrand Overseas into a new label: Fossil. While the parts were still manufactured in Asia, Head designer Lynne Stafford (whom Kartsotis later married) produced contemporary watches with an unmistakably vintage American quality. Three decades later, the internationally recognized company does $3.2 billion in sales annually.
Building off of Fossil’s success, Kartsotis opted with his next venture to take things a step further: artificially create heritage by co-opting Shinola’s rich American history. Shinola's products are designed and packaged with an American mid-century theme, evoking nostalgia for a bygone era of quality and integrity. Wooden boxing and elements of red, green and gold callback to Shinola’s origins as a shoe polish and accessories firm. Most importantly, Kartsotis’ decision to headquarter the brand in Detroit—a city emblematic of American hardship, resilience and craftsmanship—allowed the brand to establish a tangible connection to vintage America—despite not actually having one—creating a strong sense of brand authenticity. Shinola isn’t selling watches; it’s selling a comeback. Customers don’t mind shelling out $850 for a watch or $400 for a vegan leather laptop case when they feel like they’re doing their part to rehabilitate Detroit. Through Shinola, Kartsotis managed the near impossible in new-age marketing: to create a brand that feels authentic despite being largely contrived, built on the promise that it’s made in resilient Detroit although predominantly manufactured in Asia and owned by for the people while controlled by a near-billionaire.
“We’re not a watch company. I did not want to build another watch company. This company really started as a job creation vehicle”, said Kartsotis. To that point, Shinola–which began with only 9 employees–now boasts more than 500 workers and 30 retail locations around the world ranging from flagships in metropolitan hubs to local retail outfits in suburban malls. Its impressive number of hires notwithstanding, the actual in-store merchandise does not reflect the native Detroit Shinola so proudly endorses. Most Shinola storefronts in large part feel exactly the same as its Detroit base of operations, diminishing any sort of local authenticity. The Los Angeles Arts District location, for instance, features a bakery outpost of Smile, the celebrity-friendly NoHo restaurant, and a Saved Tattoo studio, whose celebrity founder Scott Campbell counts Marc Jacobs and Penélope Cruz as clients. Shinola continues to fill out their retail stores with high-end goods from Steven Alan and Common Projects (both New York-based companies). It all seems a bit of a farce—a label built on the idea of poverty and struggle catering exclusively to wealthy clientele.
What’s more confounding is how Shinola regularly manipulates its own story. Kartsotis claims that “in today’s world, people want to know who’s making their food, where it’s coming from.” Shinola’s marketing is built on a backstory—one that repeatedly exploits Detroit’s rich history and misconstrues the label’s mission. For example, take a look at the Shinola Runwell bicycle, a refined city bike that goes for $2,950, the same price as many good carbon-frame road bikes. Some would consider the price exorbitant, but Shinola claims they are selling the idea of lineage: a lugged steel frame manufactured by Waterford through an acclaimed Wisconsin-based bike maker, and designed by Sky Yaeger, who transformed bikes into fashion items during her years at Bianchi and Swobo. The lure of this assembly chain may seem attractive to the consumer, yet Shinola chooses to emit several red flags to protect its brand image. According to native Detroit resident and former Complex staff writer Jon Moy:
>>>Shinola isn't really a Detroit company. Bedrock Brands owns Shinola. There is no website for Bedrock, but the privately held conglomerate was created by the co-founder of Fossil watches and owns other brands like Filson [as well a major stake in Steven Alan]. It is based in Texas. The watches aren’t manufactured in Detroit, but they are assembled here from parts made overseas from their partner, Swiss-based watch manufacturer Ronda AG. The bikes aren't manufactured in Detroit either. Again, they are assembled here with parts made elsewhere. Although the frames are welded in Wisconsin.
These statements on their own don’t paint a negative picture. That said, Shinola’s image is directly dependent on its ties to the city of Detroit. Their justification for their cheapest watch ($550) and entry-level bicycle ($1,950) is, naturally, made-in-America. American manufacturing costs more, quality materials cost more and American products are inherently worth more, or so Shinola argues to justify their price point. Moy says it best: “in this way, Shinola reminds us what the American dream actually is: a selling point, nothing more than a sales pitch.”
Virtually everything about Detroit—the locals, the factory, its workers—have become a prop in service of the Shinola brand. Many of Shinola’s workers, who were once laid off from the Big Three automakers, now grace the luxury brand’s slick marketing materials, their hardscrabble stories and subsequent comebacks portraying the company as the town’s “savior.” Even the factory space Kartsotis chose came with its own storied heritage wholly unrelated but somehow amalgamated to the Shinola brand. The former site of General Motor’s famed research lab, “The Argonaut” was where the first automatic transmission and heart-lung machine were created. Customers at the Detroit flagship store can enjoy artisanal entertainment, watching dial makers work through plated glass. Retail locations are accented with products from “real” Detroit designers. Kartsotis even poured millions into a marketing campaign shot by famous fashion photographer Bruce Weber, starring Carolyn Murphy posing with Detroit locals. Shinola's ethos is perhaps best explained by The New York Times’ Jon Caramanica, as “a midpoint price watch mogul looking to go luxury under the cover of charitable business practices.”
While Shinola continues to receive criticism regarding its appropriation of Detroit from politicians and the fashion community alike, the brand still does provide some benefits to local Detroiters. Krystal Bibb, a 32-year old Detroit resident was laid off from Ford and was first hired by Shinola as a part-time janitor. She slowly worked her way up to quality supervisor in the watch factory, where employees make between $11.50-$14 an hour, well above Michigan’s $8.50 minimum wage. Kartsotis claims people like Bibb are his driving factor for expansion. His plan to sell Shinola’s “affordable luxury” products is essentially a sophisticated strategy for job creation. More factory success stories lead to improved marketing, which leads to selling more products, in turn increasing the number of workers employed. This is the precise reason Kartsotis always claims that watches are just the beginning.
Along with the watches and leather goods Shinola already produces, the company will soon manufacture everything from General Electric power strips to eyewear and custom headphones. Many of these products are clearly pure marketing exercises. One instance is a boutique in an upcoming Shinola hotel in downtown Detroit which will feature a “rooftop vinyl listening room” with Shinola branded turntables. Shinola is currently operating at a loss, which Kartsotis claims is on purpose. “If we were just making watches, we’d be very profitable, but we’re diseased gamblers,” Kartsotis said (he has personally injected about $100 million into the company). As Kartsotis steamrolls into categories well beyond his core competency, he’s aware of the dangers that result from growing a company too quickly. “I might bite off more than I can chew, create categories that aren’t authentic and damage the brand by doing something stupid. I could still fuck up.” Regardless of your opinion on Kartsotis, he’s clearly aware of his actions and their subsequent repercussions. Yet, he still seems to be under the illusion that Shinola is Detroit’s knight in shining armor, when its actions are less symbiotic than he may like us to believe.
Currently Kartsotis is attempting to expand the Shinola mission beyond Detroit, visiting lower-income cities and neighborhoods across the country in hopes of potential “colonization.” With sights set on an eyewear factory on the South Side of Chicago and a new leather goods factory in the Bronx, Shinola wants to expand its narrative. Still, as the space grows increasingly competitive, Shinola will need to supplement their current marketing strategy with a slew of new testimonials and backstories. In the last 7 years, Kartsotis and Bedrock Brands have made a major impact on the men’s luxury accessory market via Filson and Shinola. While they have expanded into different product categories, their core offering still accounts for the bulk of sales. Classic models like the Runwell watch continue to sell like hotcakes, but Shinola remains unprofitable. Between excessive spending and marketing tactics, unaltered retro designs and the introduction of new competitors, how much longer can Shinola sustain its masterfully crafted corporate image?