How Texas pride feeds company merchandising opportunities

AUSTIN (KXAN) — They say everything is bigger in Texas — and that includes Texans’ passion for supporting brands originating in the Lone Star State.

Austin-founded sandwich company Schlotzsky’s announced Sept. 20 it was launching a limited-edition, sandwich-themed home décor collection. The collection was designed to pay homage to The Original, the first Schlotzsky’s sandwich to grace South Congress Avenue in 1971.

Dr. Raji Srinivasan is a professor of marketing at the University of Texas at Austin’s McCombs School of Business. She said Texas is uniquely positioned from a brand recognition perspective, given that the state is defined by a character and sense of self that natives love to represent.

That loyalty to the Lone Star State often extends to, and elevates, companies and business models that might be obsolete in other states.

“Think about a gas station. It’s a low involvement category — like, how excited can you get about a gas station?” she said. “But Buc-ee’s has managed it with large, Walmart-sized stores, hundreds of gas pumps and their own merchandising.”

When it comes to brands, Srinivasan said companies are always looking to evolve and elevate their sales opportunities to maximize their reach. When it comes to Schlotzsky’s, sandwiches and aesthetically defined home décor collections don’t often go hand in hand.

Yet, she said investing in a more expensive type of product can help elevate company revenues.

“If you sell sandwiches, you’re probably selling $10 sandwiches, and you have to sell so many $10 sandwiches to get $1,000,” she said. “On the other hand, if you’re selling furniture, each item will be $300, $400 — maybe some sofa sets for $4,000. So [companies] think it might be a way to build sales very fast, not realizing that the brand extendibility might be limited.”

That brand extendibility is a factor to consider when weighing out a possible merchandising pivot, Srinivasan said. Since something like Schlotzsky’s latest move is so far outside the company’s traditional wheelhouse, it requires a different form of managerial attention, skill sets and resources to make those products that businesses need to closely consider.

There also comes the viral element of branded products. Social media is a huge marketing resource for companies to capture the public’s attention and, in turn, bolster potential customer interest through user engagement.

“Where do marketers need to be or brands need to be? They need to be where the customers are,” she said. “I think social media is definitely… that is a low entry price and you can actually have a lot of user engagement with users sort of forwarding messages, creating content and, in effect, becoming brand ambassadors.”

As for the timing of product launches, Srinivasan that comes down to the scale of the merchandising launch. Something to the caliber of home décor required much more planning and preparation to roll out, with less focus on the semantics of a given time of year.

However, for things like a Whataburger Christmas sweater or a Buc-ee’s St. Patrick’s Day t-shirt, the time of year both drives and elevates public demand.

“I think these bigger pivots that we’re seeing into completely different product categories require a deep level of investment and long-term strategic planning,” Srinivasan said. “So I think they’re probably less subject to seasonal variations.”