Business Essentials: Dot com at the deed poll - can a new brand name deliver the goods for

Blackstar has been born again to change perceptions of the internet retailer. Now, says Kate Hilpern, it must tell the world
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he name may no longer be the same but, in other respects, Blackstar is a great survivor. One of the companies that launched the dot-com boom, it went on to prosper while its peers crashed back to earth. However, the direction the firm took wasn't quite the one its founders had intended. Indeed, the provider of DVDs, videos, computer games and home entertainment accessories wound up earning a reputation as a supplier of genre films.

Earlier this year, in an attempt to relaunch itself as a competitive mass-market player, Blackstar changed its name to Now, it must raise awareness of this new identity and re-emphasise its credentials as a mainstream retailer.

Managing director Ian Loughran explains how the company managed to stay afloat in the early days. "Blackstar [which is based just outside Belfast] was launched in 1998, having gone through the usual venture capital funding. When the dot-com bubble burst, we had a period of internal downsizing, but we didn't allow that to affect the external side of Blackstar. In fact, we remained really focused on customer service and it paid off: 2002 was our first full profitable year."

It helped that the DVD market exploded around 2000. But it was this development that was largely responsible for the shift in Blackstar's direction. As Mr Loughran explains: "A number of new entrants came into the market at that time and they were able to slash prices by shipping from Jersey. Basically, they took advantage of the fact that any item under the value of £18 can be shipped from outside the European Union into the UK free of VAT. Jersey is in the UK, but not the EU, so it is an ideal place from which to operate."

Because Blackstar still shipped from the UK, its prices were becoming less and less competitive. But the positive side of being located in the UK was that it could deliver faster than its rivals.

"Also differentiating us was our firm focus on high-quality customer service," says Mr Loughran, "and that's how our reputation as a brilliant specialist provider came about. Customers were able to get their hands on sci-fi and Buffy-type films quickly and with ease."

But while Blackstar continued to grow, the pace of expansion wasn't fast enough. "We came to the conclusion that profits were more dependent on our prices than on the speed of our delivery and so we too started to ship from Jersey," says Mr Loughran.

The problem was that Blackstar's public image was now firmly entrenched at the specialist and more expensive end of the market - and that perception was difficult to shift, even though the reality had changed. "Earlier this year, we decided there was one solution: to refocus our position in the market by rebranding ourselves. That's where the name change to came in."

In order to publicise the new brand as effectively as possible, has focused on public relations and carried out a large-scale launch offer. But, as Mr Loughran explains, the company spent a lot of money on advertising in 2000 - some of it quite foolishly - and it doesn't want to make the same mistake again.

"Our strengths are that we are now price competitive, we have a wide product range, we have strong product offers and our service is still excellent," he says. "Our task is to get these things associated with our name and to get our name out there - and we want to know the best way to achieve this."


Mike Conroy, senior marketing manager, commercial banking, HSBC Bank

"Rebranding and company name changes are challenging. Even some household names have been criticised for wasting money, usually because their rebranding has been seen as cosmetic rather than substantive. Successful brands are rarely built overnight.

" has a number of online competitors, so it's vital to focus on a couple of key messages or attributes that make its brand stand out, but which also reflect the reality of what it delivers to customers.

"Positive customer experiences can translate into powerful, cost-effective word- of-mouth publicity. Advertising also has a role to play but it can be expensive. It is therefore worth seeking advice from a business relationship manager at a bank as well as specialist marketing communication firms. Quite apart from being able to discuss the funding of large-scale expenditure, like advertising, a relationship manager will have dealt with businesses facing similar dilemmas and could prove to be a useful sounding board."

John Greenhough, head of business development, Chartered Institute of Marketing

"The company need not focus on raising awareness of the 'name change', apart from among its existing customers - who need to know the service still exists. What it must do is to build as a new brand that stands for quality service at competitive prices.

"Some targeted advertising would build brand awareness, but the company should consider a focused PR campaign that concentrates on the values of quality and price.

"If wants to get into the mainstream market, it needs to make it easy for customers to find it. A Google search for 'DVD online' brought up numerous online retailers - but not

"The company can improve its position by optimising its website's specifications, and by 'buying' better rankings. Another well-known price comparison website is This finds the best deals on the web for many products. does not feature on the site - it should."

John Williamson, board director, Wolff Olins (brand consultant)

"The retail mass market is really tough these days - ask M&S, WH Smith and Boots. To be successful you have to stand out, and to stand out you have to stand for something. Successful mass-market brands like Ikea, Zara, Orange, The Gap and Amazon all have at their core a unique personality and deliver a truly engaging experience. As a result, their customers don't just buy products, they buy into an idea. They become brand champions, an unpaid brand army.

" needs a big brand idea fast. It doesn't need a functional, Post-it note sort of idea, but a big emotional idea. An idea like power, fight, democracy or optimism - an idea that customers can buy into, that they will fight for, that can create a unique brand experience. Without it, Sendit will become Spendit as marketing budgets skyrocket in an attempt to win market share. To quote the greatest brand warrior of all: 'Don't prevaricate. Just do it'."