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Avoid the squeeze

Ensuring brand success in a shifting retail landscape

Camilla Crane 12 May 2017

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There’s no doubt that we’re slap bang in the middle of an enormous and compelling shift in the philosophy of buying and retailing. While high street shops are closing in droves and the top FMCG brands are losing share value; it’s the small brands that are winning customer allegiance.

It used to be the case that people treasured consumer goods and the access they had to them. But today, consumers believe it’s them that should be treasured by the brands they buy from.

While some big brands are failing; it’s the small, gutsy, highly adaptable brands that are thriving. To succeed, retailers need to question how prepared they are to break free from their comfortable past and take on the agile ‘Davids’ (opposed to the Goliaths) of the retail world.

SHIFT WITH THE LANDSCAPE

The exponential rise of e-commerce and the change in consumer behaviour have both had a massive impact on the retail space over the last 20 years. Just look at the decline, and in some cases demise, of brands such as HMV, Blockbuster and Jessops.

We’re moving from a world of bricks and mortar giants, which are primarily accessed by cars, to flexible, integrated formats that bridge the gap between physical and digital; convenience and grocery; urban living and the suburbs.

While physical giants close their doors, others are opening them. AmazonGo is a great example – it’s taking us back full circle by connecting both the physical and digital worlds through a seamless experience. To succeed, brands must ensure they meticulously research who their customer is, that their product is well designed, and that they’re constantly and seamlessly shifting with the times. Fail to be savvy and you could be the next HMV.

Source: WikiMedia

COPYCATS WON’T CUT IT

Brands lazily copying their peers is a trend that’s ultimately responsible for a decrease in loyalty amongst consumers – it creates confusion between private label products and big name brands. Rather, it’s the brands that dare to stand out and personalise their message by connecting with individual values that are winning.

BrewDog is without doubt a brand that isn’t afraid to speak out, and a great example is its unreserved #SorryNotSorry ‘apology’, vented at the Portman Group in retaliation to one of its ales being banned. Likewise, Lidl’s #LidlSurprises campaign, overtly tackled the unfounded perceived bad quality of their produce, and how their preferred farmers care for their livestock, by responding to negative social media posts in a TV campaign.

If the last 50 years was about brand marketing and how brands positioned and presented themselves to people; the next 50 will be about ‘people marketing’ – brands essentially having to adapt to consumers by being hyper personalised and data driven.

PICK A SIDE

The changing retail landscape and consumer behaviour makes the middle a difficult place to be. The squeezed middle is painful, and SKU rationalisation will see the continued decline of mid-tier brands, as more people lead a 5:2 lifestyle of saving to reinvest.

Let’s take Fever-Tree as an example. It sells at a significant premium to its competition, with packs of four 200ml bottles retailing for £2.99, which is in stark comparison to a litre of Schweppes, the Coca-Cola owned brand, which sells for 89p. Fever-Tree increased revenues by 71% in 2015.

Be bold, pick a side and stick to it, and shout about whichever side you’re on. Whether your brand is premium or discount –  confidence in brand identity can often yield a loyal following.

Source: Fever-Tree

CONSUMER EMPOWERMENT

This monumental shift in power from brand to consumer has led to brand liberation. There is no single way to be anymore. Premium shoppers in one category are not necessarily premium shoppers in another category – I may drive an Aston Martin, but I’m also free to shop at Aldi.

This brand liberation is being jumped on by private labels. They now have a proactive audience, and this change is no more evident than in the UK where Aldi and Lidl have forced established leaders to change their brand strategies.

The evolution of the ‘bargain store’, which includes retailers such as Poundland, Poundworld and Poundstretcher, has witnessed an equally meteoric rise in the UK. The stigma that was once associated with shopping at these stores has all but vanished, and the shoppers who choose to spend their income here are increasingly being seen as ‘savvy’ as opposed to ‘cheap’.

How did they do it? Well, the irony of ironies – the discounters came in and pulled the rug from under the feet of mainstream retail. These seismic shifts in quality and price expectations are not just isolated to the UK; Lidl is entering the US market in 2018.

 

To get ahead, brands need to study who they’re targeting. Products should be designed for specific consumers and their homes, not the retail shelf. It’s time to take it even a step further and go beyond a static aesthetic – let’s bring the pack to life! The end goal is always to emotionally connect with consumers through unique and seamless experiences. So in a shifting landscape, there is no single solution – you need to rely on agility and creativity.

 

Read the interview featured by Fashion Network.

Camilla Crane Camilla Crane
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It’s no walk on the beach

Alexa learns to see and be seen

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