Branding Feature: Branding Beyond the Products You Sell
Some of us remember a time when manufacturers and retailers wanting to reach their customers would simply place an ad touting their brands and products. Ads could take any of several forms — newspaper, magazine, radio, direct mail and, if the budget allowed, television. The message could be subtle or direct. It would run a number of times according to the ad agency's "proprietary" formula and the consumer would ideally respond by going to their local store to make a purchase.
This retail business model, which fostered the rise of that once great and now-faded American institution, the mall, seems terribly outdated and almost quaint today. The mall was the place where retail lived and thrived. The mall had something for every member of the family, usually with multiple retailers offering the same branded merchandise from their gaudy-themed store windows. The mall was a destination; it was entertainment just as much as it was shopping.
Then the internet came along and changed everything.
It's a new world now. For many of us, mall or no mall, visits to a retail store are few and far between. The fact is the internet has pretty much made many brick-and-mortar retailers mostly irrelevant, if not obsolete. Consumers are bombarded with increasingly sophisticated, precisely targeted ads driving them to the web for their purchases. Shoppers have gotten smart (and maybe a little lazy) knowing that they can find exactly what they want at the absolute lowest price without moving from their PC, tablet or mobile device.
From 2000-2012, total U.S. retail sales grew 3.2 percent compounded annually. During the same period, e-commerce sales posted a 19.1 percent compounded annual growth rate. Furthermore, according to Forrester Research, the web will account for 11 percent of the total retail sales in the U.S. by 2018. That's $414 billion in sales, a compound annual growth rate of 9.5 percent.
To look at this in more human terms, of the 69 percent of U.S. adults that say they regularly shop online, about 16 percent of their purchases occur online. And these numbers will only grow as "digital natives" — i.e., young consumers who have never known a world without computers and mobile devices — hit their prime spending years.
This puts tremendous pressure on marketers trying to remain competitive and relevant. How do retailers build their brand in a post-mall/internet-driven world? How do today's marketers engage and retain their customers when most any consumer can sit on his or her couch at any time of day or night and with a few keystrokes access an almost infinite selection of brands and products at a variety of competitive price points?
Looking at this another way, when once it was considered fashionable to say, "I bought this at Saks or Nordstrom, or that exclusive boutique," it's now more common, and no less fashionable to hear a consumer say, "I found this on Wayfair.com or Amazon.com for next to nothing!" Even the vaunted 1 percent takes a measure of pride in scoring the best deals.
Retailers are fighting back. You'd be hard-pressed today to find one that hasn't established at least a reasonably effective online presence. Sophisticated data mining practices and aggressive discounting have helped slow erosion of their customer bases and improve their customer retention efforts. However, a robust web presence is just the price of entry for the majority of today's retailers.
Creative retail marketers have found new and compelling ways to engage with customers and prospects to create and deepen the brand relationship. In-store events, brand partnerships and relevant content are just a few of the many ways savvy retailers are fighting to stay relevant in the post-mall world.
Not Your Father's Retail Marketing
Beyond a keen insight into the lifestyles, priorities and preferences of your target audiences, most nontraditional marketing efforts will include one or more of these elements:
A benefit without necessarily an obligation to the customer: Of course the goal is to sell product, but the customer doesn't have to make a purchase to participate. For example, lululemon offers free yoga classes at its stores led by well-known local instructors, as well as sponsoring weekly evening "fun runs." No purchase is required, but participants presumably will feel more positive towards lululemon gear when they consider their next purchase.
- A robust internet presence: By internet, I mean YouTube here. Old Spice almost created the men's body wash category. With competition increasing and knowing that women made more than half of all body wash purchases for their significant others, Old Spice needed a win. It introduced a couples-targeted campaign online over the 2011 Super Bowl weekend using the popular "man you want to be" character that garnered 11.6 million views. The campaign also spawned nothing short of incredible buzz from consumers posting their own versions of the original spot on YouTube to lavish mentions on "Oprah" and "Ellen." And then Old Spice took it to the next level. Over two days, Old Spice's ad agency, along with a team of digital strategists and producers, filmed 186 responses to questions culled from fans' posts on Twitter, Facebook and Reddit in real-time messages posted on YouTube. This was a brilliant use of social media that rejuvenated the brand and still has people talking today.
- A sense of community with events that bring your target audience together: Journeys sells shoes targeted to teens, often one of the toughest groups for marketers to reach. Partnering with one of the brands it offers, Journeys' 44-city Vans Warped Tour features known as well as up-and-coming music groups to bring out the crowds looking to see and hear the newest acts. If you don't have teenagers, you've probably never heard about it, but it's big — and a winner for Journeys!
- Companies that give back: This is the "do well by doing good" business model. For every pair of shoes TOMS Shoes sells, it gives away a pair of shoes to an impoverished child. The company also donates part of its profit from the sale of its eyewear to restore eyesight to people in developing countries. Who wouldn't feel good about purchasing from this company?
- They stand for something: Many companies have adopted this stance to some extent, but few do it as well as outdoor apparel and gear retailer Patagonia. Beyond producing high-quality adventure clothing and gear, this environmentally conscious company is transparent about where and how its merchandise is made. Patagonia ensures that all of its products are produced under safe, fair, legal and humane working conditions throughout the supply chain. This reflects a powerful insight into the values of Patagonia's customer base, and the retailer has been rewarded with tremendous customer loyalty.
So, for those of you who remember that simpler time and long for the good-old days, sorry, but those days are gone and they aren't coming back. But for those retail marketers who have the product, passion and creativity, there's never been a more exciting time for brand building. Smart consumers, multichannel distribution and social media have all raised the marketing bar. It's survival of the fittest and the winner is the customer.