Part two of our five part series exploring trends that are shaping brick-and-mortar retail experience. You can read all of the trends in The Store Is Back eBook, courtesy of RBM Technologies.
Digital technology has made retail experience more transparent than ever. Customers have unlimited access to information, so their brand perception forms long before they step foot into a store.
How customers see a brand extends beyond products on shelves, and marketing messages on signage. Shoppers have begun to see brands as nuanced and multidimensional, viewing emotional factors such as thoughtfulness and empathy as benchmarks of value on par with product availability and pricing. They already have a myriad of retail purchasing options, what customers want is a brand who connects with them on a human, more meaningful level.
“Your brand has never been more important. People want to hang out with brands that mean something to them.”
Andrew Smith, Director Retail Operations at Telstra
Now is the time for retailers to evaluate their connection with their customers. In 2016, shoppers will continue to place the value of a brand on how it makes them feel. This evolved brand perception means retailers must focus on delivering tailored, memorable and relevant experiences in order to strengthen their customer connection within the year.
Before a retailer can build a meaningful relationship with the customer, they must first understand them. It is therefore critical that retailers focus on knowing shoppers’ behaviors and patterns, as well as their local needs. To reaffirm the brand perception and create meaningful customer connections, retailers need to put customers’ preferences and behaviors alongside other store specific data. Collecting shopper-specific data can be used to create unique profiles which will then help build a more authentic and lasting relationship with the customer.
Just as marketers decide to push more of their budget from direct response and into brand campaigns, it could become more difficult to sway consumers in 2012 through loyalty. Consumers seemed easily influenced this year by advertised specials and daily deal coupons, but research suggests the online ad industry may need to rethink strategies and get to work on new technologies.
Target, for example, created a persona of stocking chic, yet inexpensive products, according to Stacy DeBroff, CEO and founder of Mom Central Consulting. “Michael Graves could create a teapot, but it’s only $11,” she said. “They designed coolness into better prices. That’s a persona.”
When it comes to generating awareness, think about the variety of available ad media, although some don’t necessarily convert to purchases, DeBroff said. Mobile applications on the smartphone that most consumers keep close to them can create brand loyalty through continual use. Those that offer discounts on goods and services provide incentives to keep consumers using tham.
The apps also can help brands create that persona DeBroff recommends — a persona similar to the one Microsoft wants to create for its search engine Bing. DeBroff points to a “successful” Bing campaign that ran about six months ago to get consumers to set Microsoft’s engines as their default for search. The research firm comScore reports that Microsoft’s Bing gained a little ground against competitors in November, and now holds about 15% market share, rising .2% sequentially.
The online recommendation culture continues to gain importance, too.
The conversion to a purchase often happens through first-person recommendations, and frequency — not the click of an ad, she said. People are open to recommendations through discounts, coupons and word of mouth.
Only 50% of moms recently surveyed by Mom Central Consulting consider themselves brand loyalists. About 66% of moms are willing to reach for the generic brand — especially when it comes to finding that both products have similar ingredients.
Moms have been forgoing brands they have added to their shopping carts for years, with 89% reporting they are open to new products. Plus, 78% of moms will switch brands when offered a coupon with a significant discount. And 68% of moms will pay attention to the product when offered a sample; 65% said they trust others through online recommendations to try new products.
Only 3% of moms admit that targeted ads on their social networks strongly motivate them to make a purchase.
Branding giant Joe Duffy looks at the world’s most powerful brands and how they’ve evolved to the point of “wordlessness.”
In our business, we often have the opportunity to bring a new brand to life. With that comes a question we often hear from clients: “Do you do naming?” And then, “What’s your process?”
It’s a regular part of our process to struggle with naming a new company, product, merger, or acquisition. You might be asking yourself, Did he mean to write “struggle”? Yes, I did. And it’s a bigger struggle today than it was before the onset of the World Wide Web and the ensuing global market that everyone now plays in. Perhaps the biggest aggravation is the difficulty in securing a simple and meaningful URL and trademark/copyright. It’s become a bit of a gamers’ business to buy and hold names today, and so many meaningful options have been taken.
In part, that is why our approach to naming is different than many firms that specialize in naming. Because when you stop and really think about it, how important is it that a name actually explains your product’s unique selling proposition, defines your company, or pegs you into a specific category? And even if any or all of those factors are driving forces behind your naming objective, do you have the luxury of choosing a name that will have only one linguistic meaning? The truth is that naming is about much more than words; it goes beyond linguistics and phonetics.
Think for a moment about some of today’s most famous brands. Consider these names–alone. Apple. Amazon. Target. What do any of these words say about the products they sell? The services offered? The groups that started them, or more important, the companies that they have become?
Then stop for a moment and think about the way the world communicates today. Paraphrasing. Colloquialisms. Jargon. Even when you have a brand name that defines your raison d’être, it often gets abbreviated. That’s what happened to Federal Express and Aol.
And then…they embraced it.
These are but a few examples of truly relevant brands. Their true meaning comes from getting to know them, watching them evolve, seeing them for more than the letters that make up the words in their names. So while I won’t say that the name itself is unimportant, I firmly believe that it is so much more than the name alone.
Right now, we happen to be working on an amazing new product that is in need of a brand name. We’ve done the typical research. Studied the category semantics and the competition. We’ve brainstormed new possibilities, many of them names that are quite clever, reinterpret known meanings, present interesting spellings or letterform opportunities, lean into modern vernacular and more. The problem we face now, as is often the case, is in getting everyone on board at this early stage. Finding a word that everyone can agree works best. What we find is that those that are “new” don’t sound quite right. They are unfamiliar. I guess that makes them strange. Those that may seem common in their mere verbal presentation may hold tremendous design potential around letterform, in type, or with the addition of a simple symbol. But at this stage, it’s difficult for the team at large to envision the full potential.
I probably won’t surprise you, but I’ve always believed that making a decision on a name, without the benefit of seeing it in its visual form, puts a person at a significant disadvantage. Done well, the power of the graphic presentation adds significant meaning. The interplay of positive and negative space (the arrow in FedEx); unique logotype (Saks Fifth Ave., Diet Coke); a symbol (I love NY); and color (Tiffany). These are some of the many elements that can work in concert with words to deliver greater meaning to a name. These are the cues that transform a meaningful name from being a mere product descriptor to a brand with differentiation, relevance, and personality.
The development of a successful new brand (in support of a unique product or service concept, of course) is dependent on the creation of an entire “brand language” to surround it. A brand language is composed of multiple communication tools. Words and tone of voice are parts of a brand language on the verbal side. Things like color, type, symbols, icons, illustration and photo styles, materials, and textures are visual components in a brand language. Every element should be uniquely designed for a brand to create an ownable voice, and when used in combination, they provide a proprietary way to execute in a way that can cut through category clutter.
As our world becomes more integrated, with the ability to see many cultures and readily buy and sell goods from multiple nations, as businesses cross borders more consistently, as our interaction with technology and the visual communication of graphic user-interface design increases, and as we are constantly pushed to process more and more information, we’re beginning to see some brands evolve to a place of “wordlessness.” Apple, Levi’s, Starbucks, and Nike are a few of the noteworthy brands that are leading this branding evolution. Perhaps this is because we’ve come to a point where we see new opportunity that can come with transcending the differences and struggles that verbal communication presents.
True power brands have much more than a name in their arsenal of marketing communications weapons. And just like the people we find ourselves attracted to and want to spend time with, they walk, talk, and act in a way that is unique to their character. They’re true to themselves, and you can depend on their meaningful characteristics and actions–even beyond their words–to stand the test of time.
The key to growing in an uncertain economy is to cross disciplines, writes Jump’s Jonathan Gabrio.
The retail outlook for the 2011 holiday season may be more promising than 2010, but executives know there’s a much larger issue looming overhead than sales this quarter: long-term growth. No other subject strikes as much fear and uncertainty in the hearts of executives these days than how to grow their business.
Hard problems call for a hybrid strategy.
In retail, as in most industries, growth has never felt more ambiguous. While issues of growth have always been on executives’ minds, three trends make today’s situation particularly uncertain. First, growth by streamlining costs and rationalizing SKUs is less and less effective. Second, building consumer loyalty in a post-recession environment has become foggy at best. And third, the rapidly changing media landscape places the very notion of brick-and-mortar stores in question.
The truth is, all of this ambiguity can’t be clarified by any single discipline. The really important issues in retail aren’t ones confined to marketing, technology, design, finance, or managing the supply chain. It’s about all of them at once. These highly ambiguous problems call for a hybrid approach to strategy. The future of retail has to transcend disciplines to fulfill its growth ambitions.
Here are three hybrid approaches retailers can use to think across disciplines and find new opportunities for growth:
1. Team up with vendors and indirect competitors.
The lines between retailers and manufacturers are blurring. Retailers have realized their power to drive product development but haven’t fully developed the capability to manage it. A private label by itself isn’t enough. Taking a hybrid approach requires actively seeking unique partners to fill in the gaps. Collaborating with vendors and indirect competitors, for example, is a win-win–retailers are able to use a brand people already know and love while manufacturers get peace of mind that their new products will have a place on the shelf.
Take, for example, a recent partnership between Target and the online high-end fashion discounter Gilt. Trying to find a strategy to increase clothing prices, Target placed its new line of designer handbags and clothing on Gilt.com, hoping to benefit from the site’s exclusivity and sense of style. The products sold out within a few hours. By teaming up with what some would consider a competitive threat, Target found a new way around the problem of competing with Walmart for pennies on the dollar.
2. Solve for overlapping needs, not demographics.
Segmentation models based on demographics or lifestyle are increasingly less useful in retail. Using these models can often alienate people at the shelf and show a lack of empathy for the customer. It’s more useful to identify overlapping needs and build solutions to meet them. Finding the intersecting needs of seemingly disparate groups, such as young couples and empty nesters, for example, can be a stronger approach than marketing to a single target.
Ikea focuses on folks in transition who don’t have an appetite for permanent, expensive furniture. While many young singles and couples love shopping there, older families with kids growing rapidly feel it’s designed for them, as they are also going through significant household transitions and need new, temporary furniture. By setting up all aspects of business to deliver on overlapping needs, retailers can demonstrate more empathy and capture a wider spectrum of consumers.
Done well, backstage tasks can generate new growth.
3. Shift backstage activities to front stage.
As businesses are under increasing public scrutiny, very few “backstage” behaviors, such as sourcing or employee conduct, are without an audience. That’s just the reality of business today. The knee-jerk reaction of running marketing campaigns that talk only about who their suppliers are fails to match the transparency consumers demand.
When done well, backstage activities can actually generate new growth, not just mitigate risk. Consider Whole Foods: In its flagship store in Lincoln Park, Chicago, there’s an office right in the middle of the produce section. The tasks that have traditionally been “backroom,” such as sourcing fruits and vegetables, are now front and center. Shoppers interact with the folks in the office and as a result have more confidence in their purchases. Blurring the line between consumer-facing and back-of-the house parts of the business can give consumers access to more information while driving sales at the same time.
Netflix, Google and Amazon top a list of the 10 “simplest” U.S. brands, according to Siegel+Gale’s second annual Global Brand Simplicity Index.
(Netflix was picked as the simplest brand in the survey after it announced price hikes but before the announcement of the formation of Qwikster, which was subsequently reversed. In the wake of these missteps, mass subscriber departures followed.)
"This survey demonstrates that brands that put a premium on simpler and more transparent user experiences and interactions inspire confidence and generate customer loyalty,” said Howard Belk, Siegel+Gale co-CEO and chief creative officer.
Also among the top-ranked simplest brands are retailers Target, Publix, Whole Foods Market and shipping UPS. Rounding out the top 10 are fast food purveyors Subway, McDonald’s and Pizza Hut.
“It is time for brands across all industries to recognize that communicating in a clear, direct and straightforward manner generates a high level of customer loyalty and, ultimately, profit," said David Srere, Siegel+Gale co-CEO and chief strategy officer. "Consumers are demanding simplicity in all of their interactions, and those organizations that can satisfy this demand will be able to compete — and thrive — in today’s competitive marketplace."
Within the Internet retail industry, Amazon, Zappos and iTunes ranked among the leaders in providing customers with simple interactions and experiences online. Consumers benefit from easy price comparison, free shipping and a streamlined selection process funneled through customized communications.