Jun. 3 The Importance of Branding in a Changing Retail World
Posted by Mark Morris in Brand Wisdom

The FOOTWEAR retail landscape has changed dramatically in recent years.

Formats that didn’t even exist are now doing billions of dollars of business (think internet, shopping networks, and smart phones). How consumers receive and process information on goods and services has also changed. But some things remain the same.

“Consumers follow the same thought process no matter what the retail format. Yet the way they receive and process information about products and services has changed dramatically. Combine an understanding of how consumers think and act with an equally strong understanding of what your brand means to them to be successful in any retail format,” notes Barbara Scott, a partner with The Brand Consultancy, who held senior marketing and merchandising positions at Keds, Stride Rite, Hush Puppies, and Laura Ashley.

Consumers Now Have More Options

In the past retail was organized around three tiers: upper, mid-tier, and discount, with upper being traditional department stores like Macy’s and Nordstrom as well as independent specialty stores; mid-tier, including Sears, JCPenney, and Kohl’s; and the discounters dominated by Wal-Mart, Target, and Kmart. Every retailer knew where they fit, brands generally sold in one of the three tiers (maybe two) and it’s probably safe to say that consumers identified more closely with one of the tiers.

But today that’s not necessarily so:
  1. Discounter Target is selling brands like Converse and designer exclusives from the likes of Isaac Mizrahi
  2. Department stores like Macys and Nordstrom have strong private label programs that are no longer just margin builders but are brands in their own right
  3. Off-price retailers like TJ Maxx and Marshalls are selling the same brands as department stores
  4. Big box retailer DSW is doing the same under a different format
  5. With the demise of the family shoe store, independent retailers have become more specialized (comfort, walking, outdoor)
  6. Whole new formats have arisen. The internet includes pure play internet sellers like Zappos, Shoebuy.com and Shoes.com, as well as brick and mortar retailers with robust web-based businesses
  7. The broadcast selling format has been developed and refined by QVC and HSN, which are now multi-billion dollar retailers
And the changes keep coming. New technology is being developed at lightning speed. Today consumers can not only make purchases with their mobile phones, but they can compare prices by looking up the bar code, find a retail location, and even tell a friend. Soon consumers will be able to point their cell phones at other people to find out what brand of footwear they’re wearing, the price, and where to buy it. (Neil Weilheimer, What’s in Store: The Future of Retail, Footwear News, February 8, 2010.)

The Consumer Decision Making Model at Retail

How are consumers navigating this brave new world? What has changed and what has remained the same? We can gain insight into these questions by looking at The Brand Consultancy’s Consumer Decision Making Model.

Consumer Decision Making Model

Consumer Decision Making Model

The first thing consumers do is to put what they’re looking for into a category such as athletic shoes or shoes to wear to work. This helps organize the shopping effort and tells them where to look for what they want. Then they define for themselves a consideration set, or those brands and products they might purchase. They will select brands that they identify with on some level or those they have information about. Then they will determine which products meet their needs, screening for features such as price, size, color, etc. Next they add in the nice to haves, which include personal preference for a certain color or style, or perhaps added features and benefits. The final selection is triggered by a deal maker, which could be the fit, a special deal, or some other attribute that is important to them. A satisfactory purchase builds trust and can lead to repeat business. The steps in this decision making process tend to stay the same in all channels of distribution and for all categories.

This sounds simple, and it is. However the power for manufacturers and retailers is in taking a thoughtful look at each step in the process, and determining the various ways in which they can influence consumer’s decisions along the way.

What has changed greatly is the way consumers get information about brands and products. While they still respond to traditional advertising and publicity, word of mouth transmitted electronically is increasingly important. The rise of the internet has led to the dissemination of more information in general, both “official” information put out by the brands, as well as that put out by third parties and consumers themselves. Product reviews, blogs, and Tweets abound and are readily accessible. Consumers trust reviews written by strangers as if they knew them personally. Shopping is now largely transparent with consumers holding extensive knowledge about product performance, pricing, and where to buy. Consumers shop multiple channels, sometimes going to one channel for information (say a website) while making the actual purchase in another (perhaps a retail store).

For both retailers and brands, it is more important than ever to be consistent between distribution channels (brick and mortar and online) as well as communication channels (website, social media, and paid media, for instance).

The QVC Experience

Let’s take a look at the role that brands play in the consumer decision-making process at one of the most successful, newer retail models. First some quick facts about QVC:

  1. QVC is a $7 billion multi-media retailer
  2. Over 60 million people have shopped with QVC
  3. On Black Friday (November 27, 2009), $32 million of merchandise was sold in one day

We asked Steve VanValin, QVC’s Manager of Culture and Brand Development, to comment on the key elements that make brands successful in the QVC format. Steve provided us with insight into the following questions:

  1. Given the phenomenal success stories such as those listed above, getting a feature on QVC is coveted by many brands. What criteria do buyers at QVC use in selecting which brands to feature?
    Our buyers begin with the customer in mind. They’re always thinking about the customer experience. They look at the brand’s reputation, and then think about how the brand will be presented on air. What’s the handle? What story can be told? With a strong brand, we like to begin by telling the brand story, then talk about the product features, and end with the brand story again. It’s like an Oreo cookie with features sandwiched between the brand story. The brand story is the emotional connection, and the features appeal to consumer’s rational side.
  2. What role do brands play in decision making for QVC customers?
    Brands create trust. If consumers have a good experience, they will tell others and come back again themselves. A strong brand is what we call a showstopper. It can literally stop a consumer who is channel flipping. A good brand story, together with strong features and benefits, builds velocity, which is how we can sell so much so quickly.
  3. What can footwear (and other brands and retailers) do from a branding standpoint to be successful on QVC?
    In some ways QVC is the ultimate test of a strong brand. You must have a strong brand story that can be told simply and quickly in a compelling manner. Also, establish an emotional connection with the consumer. Combine that with tangible features and benefits. Consumers today want to feel smart, not guilty.

Putting It All Together

The QVC experience is consistent with our own findings on branding and consumer behavior. According to Allen Schiffenbauer, Chief Research Officer at The Brand Consultancy, great brands have the following in common:

(1) they have a compelling promise this is functional and emotional, and (2) they keep that promise.

Given what we know about the consumer decision making process, the impact of technology on consumer decisions, and the changing retail landscape, what steps can brands and retailers take to ensure success? It is valuable to take a look at the holistic experience consumers have with your brand beyond the product itself. Our research shows that there are many other touchpoints – or interactions – consumers have with your brand that are equally, if not more important, than the product itself in some cases. This holistic experience has a major influence on initial purchase intent, repeat business, and on marketplace buzz – what consumers are telling each other about your brand.

The Top FOUR Things a Brand or Retailer Can Do to be Successful in Any Environment

  1. Be clear on what your brand stands for
    Branding is a process and there are steps you can take to determine this.
  2. Execute consistently across all touchpoints
    Your consumer encounters your brand in many ways and in many places – remember, it’s about more than your product, it’s about the experience they have with your brand.
  3. Use all branding platforms and play off their strengths (retail store, website, social media, publicity, paid media)
    They all work in different ways and working together can create momentum for your brand.
  4. Establish an emotional connection through storytelling
    This will make your brand memorable and will set you apart.

If you do these four things consistently over time, you will have a strong brand that is instantly recognizable in any setting. And best of all, as consumers have a positive experience with your brand, they will carry the message for you.

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Apr. 30 Internalizing & Operationalizing The Brand
Posted by Mark Morris in Brand Wisdom

According to a survey of more than 700 business professionals across the U.S.:

  • Over 90% “don’t understand how to effectively represent their company’s brand”
  • Over 75% “don’t support their company’s branding initiatives”
  • Over 50% “don’t know what a brand means”

According to the survey, the problem is that “companies unintentionally keep employees clueless about branding and its significance internally by not relating their external branding efforts back to their employees or customers and by not connecting their employees to branding initiatives, decisions, and results.”

Enter survey #2, another study, which similarly found that “the concept of brand strategy is too often paid only lip service.” Out of 90 global corporations surveyed, just 19 had a long-term brand strategy they were “very satisfied” with. Moreover, 62% of those surveyed “cited lack of senior management support as the most pressing threat to brand’s long-term success.” This study blames a lack of operationalization for the failure of brand to have a real impact. Meaning, that “business needs to…make it more of an organization-wide driver of business decisions—if they expect to reap the full extent of its top- and bottom-line benefits.”

What is the difference between brand internalization and brand operationalization? Why does the difference matter? How can each help the brand succeed? And most importantly, how can a well-integrated brand drive corporate strategic goals?

Let’s begin by defining these terms.

Brand Internalization

We view internalizing the brand as communicating the brand to all employees. Initiatives that simply target senior executives miss the mark, because although their buy-in and support is critical, a handful of employees can’t possibly touch enough constituents to have a real effect on the brand. Messages associated with brand internalization have three distinct purposes:

  • Education—helping employees understand what a brand is, why it is important and what its relationship is to the organization’s reputation.
  • Definition—communicating what the brand stands for and how it is unique and differentiating.
  • Action—helping employees understand what behaviors are expected of them, and how their performance of these behaviors will have a desirable effect on external perceptions of the organization.

In addition, these communications must be inspirational, not just informational, if they are going to be effective. The idea is for employees to gravitate to the brand, rather than think of it as yet another initiative they must comply with.

Brand Operationalization

Separately, operationalizing the brand ensures that it is driven to all functional areas of the company, and is used as a driver for decision making. For employees, this means ensuring that two key elements are in place:

  • Motivation: “What’s in it for me?” is a logical response to the behavioral change that branding requires. Consequently there must be a reward for living the brand. This is accomplished by infusing it into performance and compensation programs and setting a platform of rewards and retribution for compliance.
  • Tools: If employees are going to be responsible for living the brand, they must be adequately equipped to do so. Everyone, whether “on-stage” (customer-facing) or “backstage,” must be given sufficient resources to infuse the brand into their own day-to-day functions. Since operationalization is such a comprehensive endeavor, it is most effectively executed step-by-step. This means holding workshops division by division, functional area by functional area, until the brand promise becomes so specific that each employee finds it meaningful to their role in the company. Building on the level of knowledge and understanding that employees already have about the brand, these workshops should provide:
    • Specificity: A detailed understanding of the connection between the brand’s external promises (in advertising, PR, and so on) and what it means to actually deliver on those promises every day.
    • Reality Check: A comparison between the brand promise and the actual experience that constituents are having with the brand. Here employees are asked to consider whether the reality of the brand supports the promise—and what the consequences are for the organization.
    • Integration: An expansive, but also very specific, view of how the organization will look once the brand is fully integrated into all processes, including product and service development.
    • Filters: A set of tools that help the employee continually and effectively discern whether their actions are “on-brand” or not. These tools are critical if the brand is actually going to be used as a basis for daily decision-making.

The overarching intent of both internalization and operationalization is to progressively strengthen the brand. This is accomplished by reviewing, improving, and focusing the quality of the organization’s relationships in very specific ways, including ensuring that its reputation is “on track” with its desired brand state. In this view, to produce maximum return on investment, the brand must become an integral part of the culture, inspiring the workforce to collectively support the organization’s vision, strategic direction, and tangible goals.

As Diane Beecher, Senior Partner and Chief Brand Communications Officer at The Brand Consultancy, puts it: “Internalizing and operationalizing your brand can have many positive internal effects. It can align the organization against your strategic goals; motivate a complacent workforce; provide leadership and an inspirational voice; increase retention rates; and even jumpstart recruitment efforts. In the process, you strengthen your reputation with external stakeholders, as well as your relationships with internal stakeholders. It’s a win/win scenario.”

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Dec. 29 Be Careful How and When You Use the “B” Word
Posted by Mark Morris in Brand Wisdom
Whether it’s sagging sales or the need to understand and address your customers new buying behaviors in a recovering economy – focusing on the business issue will better serve brand and marketing executives … without encumbering the conversation with “brand” jargon and terms that lead to misconceptions.

Brand can be a bad word. It is certainly misunderstood. Put 10 executives in a room and you are likely to get 10 different definitions – from a logo to an ad campaign to a product’s packaging. Let’s face it, the haze of jargon surrounding “brand” make it difficult to make a proper business case to invest in brand-related initiatives that will drive a return. Without a direct link to strategic business goals, it is difficult for business leaders to buy into the need or the expense.

Let’s face it, very few business people will likely think of “brand as business.” Brand professionals have done little to help themselves by leading with brand terminology that has a low probability of success in a cross-function business meeting that includes financial, operations and sales executives. Leading with terms like brand essence, brand mantras and brand salience, for instance, in a conference room filled with hard minded business executives, expect responses from the mildly interested to the amused to the totally dismissive.

Of course, these terms have their place and are important elements of the larger universe of brand management. But if your audience includes the CFO and director of operations, caution is advised.

Brand strategy starts with a solid focus on identifying the potential business issues and does not require the “B” word.

In order to get the attention your “branding” initiative requires for lift-off, it is better to address the business issue at hand rather than representing the solution set in a brand wrapper. But the point is that the “B” word should only come once you have identified the real business need and, further, should be used sparingly until after you have engaged your senior team in a strategic decision making process to move from issue identification to issue resolution.

Let’s start with a definition that might help illuminate our thinking.

First let’s think about branding in terms of strategy:
Brand strategy is the process of proactively managing your reputation with the constituencies you serve. This is accomplished by systematically monitoring your performance with them, making fact-based decisions to continually improve your performance along key value drivers and then aligning the resources of your organization to perform and improve them consistently

A focus on the business issue means asking the right questions first.

This will target results and align business resources faster. Are your sagging sales the result of changes in customer buying behavior or is it because of the performance of your product or service? Is it because there are new competitors that are infringing on your territory or is it because your managers and employees are not on the same page? Ask the hard questions first. Then offer the solution in the form of a process that informs the decision making of all those responsible for developing the solution. Get everybody on the same page. Cut though the anecdotal with facts and test the hypothetical solutions of your executives with solid research.

Once the real problem and the solution are identified, take the same team through an exercise to build a top-line strategic roadmap for implementation of the solution to ensure that everyone understands what it is going to take, what the dependencies are, how performance is going to be measured and how success will be determined and rewarded. Enlightenment comes with the realization that branding in its most powerful form is an installed process that becomes core to an organizations ability to efficiently make decisions and consistently deliver solutions that accomplish its business goals.

What do you think of these ideas? Have you seen any articles worth posting? Share your opinion, comments and suggestions by e-mail to mmorris@thebrandconsultancy.com.

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