The current slowdown in the macro economic environment has cast its shadow over retail as well, and with consumers increasingly becoming, what I call the three D’s – Discretionary (buying less) , Discerning (choosy) and Demanding (bargain hunting) – you have a scenario in which retailers are running for solutions to buoy declining sales.
An exception would be retailers and retail brands that continue to invest in the basics such as retail experience, product innovation and impactful instore communication and merchandising as they will be positively building a brand that could weather a stormy environment. At times like this, most companies enter into an internal and classic debate of whether to invest scarce and precious marketing budgets into brand building or enhancing the consumer’s experience at the store, consumer promotions, enhanced training on customer service etc. It’s a difficult choice but the logical one would be to build the brand at the moment of truth for the consumer – and that is at the store itself.
This point is finely illustrated in Schmitt’s book Experiential Marketing where he says that Brands are first and foremost providers of experiences. Companies need to move from Brand ID = Brand EX’ (Brand Identity to Brand Experience). Fashion brands have to go beyond product attributes and positioning. They have to deliver not only the product but they have to sell it in a theatrical style at retail. For retailers “brand” consists of both the brand image of the products being sold and the brand presentation of the store itself. A retail brand is the design and presentation of a building. It is whether you can deliver the product in a timely and consistent way. It is the company policy on returns and exchanges, whether the store has parking, comfort level of the store when consumers shop, employees attitude, how they dress and smile, how they assist when consumers browse, their knowledge of the products, and how they say “thank you” in a way that makes consumers feel wanted and appreciated. For retailers, the store experience is the brand. Because the customer is there, in the store, the reaction to any slippage in any brand attribute is immediate.
Ultimately, a product brand comes down to the customers belief in the quality or the value of the product. A retail brand comes down to the overall experience of the customer in the store of which product quality or value is only one part.
Retail brands form fixed points in the consumers’ lives. They represent trust, reliability, quality and prestige. At core, retail brands are also a promise of performance which consumers expect to be able to rely on: it is a promise which consumers insist to be kept. For this they are prepared to pay a little extra, a price premium. Since strong retail brands bind their customers to them emotionally, they are able to withstand fluctuations in demand due to their customers’ loyalty. Top retail brands have to be emotionalised, authentic and, above all, differentiated.
Starbucks is also generally considered to be a best-practice example of an experience-based brand, built up with a deliberately constrained budget. Starbucks recipe for building up a store brand is based on uniformly high product quality and an appeal to the consumers’ sensory organs — the relaxed atmosphere and discreet background music — therefore offering an exact antithesis to our hectic working lives. This strategy has enabled Starbucks to develop within a very short period of time from being a provider of various types of coffee into a full service provider with regard to coffee and associated products.
A good retail brand is also emotionally laden so that customers can strongly identify with it. The customers identify with “their” brand. If young purchasers are not able to find the brand jeans they desire in a particular shop they leave the shop without being prepared to discuss the alternatives. Creating customer loyalty by means of branding is becoming ever more important for companies’ survival in all price ranges of the fashion business. Success stories, such as the meteoric rise of Tommy Hilfiger, tend to be rare and require certain hype around the brand, as well as a great deal of expenditure on marketing.
From the moment the brand registers or connects with the customer, the store itself must strive to engage all five human senses. Drawing the customer into the store and engaging the customers senses might be termed meta – merchandising, the things a retailer must do above and beyond the placement of product in the store. This direction is the conceptual cornerstone of successful retailers like Zara.
Touch, taste, smell, vision and hearing all create powerful visceral reactions. Smell is the most powerful sense becauset it triggers memory and emotion and smart retailers take advantage. Costco put bakeries in front, to take advantage of the connect between baking and comfort. In Oakley stores, large screen televisions display sports scenes showing the company gear in action. Clothing stores use music that appeals to target customers. The louder the music, the younger the customer. Some brands appeal to the senses through the “theater of retail experience”, engaging the customer in some acitivity that enriches or enlivens the buying experience.
In these tough times, stores must not compromise experience and intimacy by trying to be more efficient. But in the area of experiential design, mood is a difficult quality to achieve. Everything about the experience must be aligned to the brand values. Victoria’s Secret uses small, cozy stores, unobtrusive mirrors to create a sense of intimacy. In a Crate and Barrel store the light woods and large open windows create a monolithic, clean and stylised atmosphere that showcases its products in a simple and elegant manner. The visual merchandising of Abercrombie and Fitch mimics the untidy, laissez faire attitude of i
