retail news in context, analysis with attitude

by Kevin Coupe

The Detroit Free Press has an interesting story about accuracy in labeling and brand authenticity ... and it all goes back to Shinola watches.

Here's what you need to know about Shinola. According to the Free Press, the company "was started in Detroit in 2011 and has closely aligned itself in marketing materials with a nostalgic, Americana image of the city. Even so, some critics have pointed out that crucial timepiece movements in all Shinola watches are manufactured in Switzerland and that the watches' dials, hands and crystals are made in China ... Shinola employees assemble pieces for all Shinola watches (which typically retail from $475 to $1,125) and bikes (which retail from $1,000 to $2,950) at its Detroit factory on Milwaukee Street and at its flagship retail store on Canfield. The company has grown to about 525 employees — 357 of them in Detroit."

And every Shinola product carries the following legend: "Built in Detroit."

The problem is that the Federal Trade Commission (FTC), which regulates the use of "made in the USA" claims, says that products using that pitch have to be "all or virtually all" made in the USA ... and it recently challenged a Kansas City watchmaker that claimed this, even though its watch movements were made in Switzerland. That company, Niall Luxury Goods, now has agreed to describe its watches as "USA made with Swiss movements."

The "Built in Detroit" claim, the story says, is seen as tantamount to saying Shinola's watches are made in the USA, which according to FTC standards, would be inaccurate. But Shinola says that while it is aware of the FTC-Niall case, it believes that "its slogans accurately reflect how Shinola makes its watches."

A prepared statement from Shinola says, in part: "We believe that 'Built in Detroit' accurately reflects what we are doing here and believe wholeheartedly that anybody who would come to our factory and witness our process, would think so too ... Shinola’s mission has been, and will continue to be a job creation vehicle as opposed to a company whose mission is about the technical fine points that are necessary in describing our products as 'Made in America'."

I don't think this is just about semantics, and whether "built" is the same as "made." I think it really is all about credibility and authenticity.

To be totally transparent about this, I have a Shinola watch. It was a present from my wife and kids, and I love it ... and I love the fact that it was built in Detroit and represents a manufacturing resurgence in that great American city. I also have Mustang ... and I'm glad that I'm driving an American car, though I have no illusions that every component was made here. Still, I'm trying to be supportive of American industry.

However, as I've said here many times, I do think that the "made in the USA" claim needs to be reserved for companies that are actually living up to the claim, and can prove it. By this standard, I think that Shinola may fall a little short ... it doesn't matter in terms of my appreciation of the brand, but it may matter in terms of being able to make certain claims. Shinola, by the way, is transparent about sourcing on its website ... but that probably isn't enough.

My solution would be for Shinola to change its slogan just a little bit, to "Rebuilding Detroit."

There are different ways to slice this loaf, by the way. New Balance is a great example of a company that has maintained its "made in the USA" credibility while being totally upfront about the fact that it does as much as it can in the US while making some products and getting some materials in other countries. That might be a good model for Shinola.

In the end, this is an Eye-Opening argument about authenticity and credibility ... and I hope that Shinola doesn't get into a fight it cannot and should not win, because that might distract from the good work it is doing in Detroit.

You have to get it right.
KC's View: