The days of pile it high, sell it cheap are long gone. Alison Casey, senior client director, retail, food and household team at Millward Brown, on why retailers need to be part of our lives
In 2013 the goal for a smart retailer was to become multi-channel. That meant offering seamless delivery of service across both physical stores and online.
Many still struggle to deliver this thanks to legacy stores, siloed organisations, narrow skills sets and old IT systems.
But in 2014 the game has moved on. This year the most successful retail brands in the 2014 BrandZ Top100 Most Valuable Global Brands ranking compiled by Millward Brown aren’t thinking about channels at all. They are all about share of life.
Today’s leading retailers have grasped that consumer attitudes have changed. It’s less about how and where they shop and more about the overall value (in its widest sense), whatever the channel.
Multi-channel helps to deliver this, of course, but share of life is a much wider concept designed to appeal to the ‘when I need it’ attitude of millennials.
Retailers are attempting to appeal to the need for convenience demanded by shoppers.
Asda, for example, has tested same-day collection at several underground stops in London allowing commuters placing orders in the morning to pick up their packages on the way home, while Tesco has also introduced click and collect locations near libraries and other public facilities.
Such seamless customer experiences are more important than ever as retailers reach out to shoppers where they are rather than waiting for them to come to their stores.
The success of this approach, however, is best seen with Amazon, ranked as the No 1 retailer in the BrandZ top 100 ranking, which grew its brand value by 41% to $64bn.
The e-tailer come retailer and media company could easily be credited with having invented the share of life principle. Its brand is successfully embedded into all aspects of consumers’ daily routine, now extending to both tablets and smartphones.
Utilising an established global distribution network Amazon now provides apparel, health and beauty, movies and grocery lines and competes with other established industries such as online food providers and media companies.
By covering so many categories, Amazon is increasingly a one-stop shop for many consumers, with its Prime free postal offer meaning that even delivery charges are no concern for regular users.
Delivering a share of life in a seamless future where consumers buy in person, at home and on the move, is, of course, not easy.
But there are key things that brands can do to make sure they are part of that story rather than be the brand that failed to adapt.
Six critical steps that differentiate share of life brands from those struggling to implement multi-channel include:
- Simplify shopping. Used to the “new convenience,” clicking online rather than driving and parking, consumers expect a simplified experience when they visit physical stores. Navigation and checkout need to improve. Retailers need to make it easer for customers to walk, see, try, purchase.
- Build Brand. Show rooming received disproportionate publicity in 2014. Roughly 50% of sales are now influenced by people researching online and then show rooming in store. Less than 10% of sales actually happen online – where Amazon has become the world’s biggest showroom. A strong brand proposition is the best antidote to show rooming.
- Provide value. Shoppers aren’t always looking for the absolute best price. Especially for relatively inexpensive products, shoppers often will be satisfied when a price allows them to feel if not smart, at least not stupid.
- Drive trips. The trick for experiential stores is to find a way to be good at something that drives frequency. In the Apple store, the Genius Bar serves this function. It draws customers to the store more frequently than if they’d visit only for their purchasing needs.
- Execute relentlessly. Shoppers sometimes leave a store with a different brand experience than they had in mind when they entered. Often that’s not a good thing. That’s because some retailers do a better job of attracting rather than retaining. The consistent delivery of brand experience is more difficult in retail than in many other categories. But it’s crucial.
- Leverage data. Retail brands also are a communication vehicle for suppliers. The supplier gains credibility being associated with a relevant retail brand. The retailer becomes the media owner, a gatekeeper to the community and the conversation. This braided marketing approach interlocks trade and retail for mutual gain.
It is clear that the future of retail is going to be more challenging than ever before; successful brands will need to continually evolve – the option to standstill or postpone investment is just not an option.
Millward Brown’s 40 years of research into what makes brands successful reveals that being “meaningful” and being “different” will be the key to developing strong retail brands into the future.
What is “meaningful” is likely to change depending on where you are in your life stage. If you are a young, single professional with a busy social life, living in the city, a retail brand that can offer you a one-stop online offering, makes your life easy and delivering to you 24/7 is likely to be very meaningful.
However, if you are a stay at home parent with young children, a brand that can offer low prices, outstanding customer service, easy access stores with great family friendly restaurants for example may well be more “meaningful”. Successful retail brands in 2014 and beyond will know their shoppers, get continuous feedback from them, act on the feedback and continually evolve their offers.
Being different can be difficult for large retail brands but companies such as IKEA, TK Maxx and, most recently, Aldi have all carved out sizeable niches for themselves and are considered unique or different by consumers.
Focusing on brand attributes that make you stand out from others in the category will become increasing important as retailers strive to develop associations in shoppers’ minds that go beyond the products they sell.