Jan 22, 2021
Not much in the world of retail is unique. The least unique element being your products. So if it's not your products that are the decisive factor for consumers, then what is it that convinces them to buy from your store?
And more importantly, how do you make sure they continue to buy from you in a highly competitive market?
Imagine this scenario.
You need a new TV. You're not an expert on TVs, but you know enough to feel you can make a decision to buy one without too much hassle. You're not looking for the most expensive TV, but it should be up to date with the latest technology. Where would you go?
In today's market space you'd probably visit one of the larger retail chains to check out their offering. That would seem like the easiest way of getting the TV that fits what you're looking for. And for a retail chain a very decisive factor to attract this kind of consumer is being top-of-mind. Your brand is not that important. The important thing is that the consumer knows they can get the product at your store, the price is right and they find your customer service good. That's not branding.
But this won't cut it in the future for retailers. Especially not for retailers with a price sensitive product portfolio. Why should a consumer buy a product from you when they can probably find the exact same product somewhere else?
One of the key reasons why you need to focus on becoming a brand is the ever-growing digital transformation of our shopping habits. According to a study by Statista 22% of global retail sales will be thanks to ecommerce by 2023. To give context to this growth, in 2019, 14.1% of global retail sales were ecommerce purchases.
Retailers might not feel it as a burning platform yet to become a more established brand, but the rise of ecommerce makes it even more crucial to start investing more in this part of your business.
Branding in retail has historically been associated with creating a memorable impression on consumers. A strong brand served the purpose of helping consumers know what to expect from a retailer. It's a way of distinguishing yourself from your competitors and clarifying what it is you offer that makes you the better choice. In this context, focusing on top-of-mind awareness and product features is in focus.
But that's not enough if you want to build a strong brand in todays market space with the rise of a more purpose driven consumer profile.
Your goal in retail branding is to become a preferred destination for shopping in your category. And the harsh truth is that branding is not a matter of having the same color scheme across your channels and making the most noise. Branding in retail far exceeds that if you want to be able to truly stand out.
All retailers need to look beyond the number of stores they have, the number of products they sell, omnichannel tactics, or the price points they sell at. They need to define why they exist in the first place. Because without that they're just a warehouse pushing products. And Amazon is already pretty good at being that brand!
To put it in words every retailer understands, without a strong brand in retail the prediction is that you won't be able to scale your business. In fact chances are you won't have a business at all.
With Gen Z taking a bigger share of the retail shopping more and more retail brands have felt the need to adjust their brand narrative. No longer is it enough to simply trust that your brand is repeating the same message. No, that message has to actually stand for something.
So when Nike says "Just do it", it's not just a matter of becoming a great athlete. It's a matter of being true to what you believe, and actually impacting the world to make it a better place. Probably the most famous example of purpose driven brand marketing is Nike's campaign with Colin Kaepernick. He got down on his knee during the national anthem in protest against police violence in the USA. The action polarized consumers, but from a business perspective it set a record high for the Nike share price.
ASOS is another retailer who has openly stated their strategic decision to rewrite their brand story to focus on a purpose. As Nick Beighton CEO of ASOS stated...
We needed to do a reset and it was not financial. It was a time to rethink, recommit, and reconnect with our customers. We want to be famous for our purpose, products and people."
It's difficult to decipher if a retailer actually stands by their brand and walks the walk. It's easy to claim a purpose, the challenge is to live it and build consumer trust. When you achieve that, you have a brand in retail that will prevail against trends, technology disruptions and competitors.
Only the future will tell. But there are a lot of indicators that it will. But keep in mind we don't all have to save the planet or eliminate racism. Having a purpose is not a competition of being the most politically correct. It's a matter of actually believing it, and being able to tactically use it to gain market shares with great communication and marketing tactics.
Branding is as old as retail itself, and looking ahead, your ability in retail to brand your business will become even more important. Not many of the products you're currently selling are unique. Chances are if you're selling it, many other retailers are too.
Imagine the same scenario I started this post with. But from the eyes of a purpose driven consumer generation.
It requires a simple Google search to do a shortlist that matches features and price. But if you've been able to brand your retail company to truly stand out in the market, you've significantly increased your chances of winning a new customer. If not, they probably won't even consider visiting your store.
And if they don't care about your purpose, they'll probably just look for the best deal - and that's a tough place to scale your business from.