NEW APPROACH IS NEEDED TO REACH CUSTOMERS
The days of pure brand advertising are long over according to Stephen Fisher, deputy chairman of advertising agency CHE. Fisher contends marketing that enables consumers to bond with a brand is critical, but today consumers are not swayed by sentimental music and nice pictures.
"Brand image needs to be an integral part of all communication at all touch points, and when you think about it, weaving the brand’s values into every aspect of the communication makes sense. "It’s less wasteful than the days when products were launched with the glossy image campaign, before moving on to the more pragmatic retail work. Given Australians interact with a brand at a dozen different touch points, each touch needs to have a consistent brand component."
Alan Treadgold, retail director at Leo Burnett Australia, agrees that brands are woven into all communication with consumers, but is quick to point out that the in-store experience is paramount, especially with 70% of purchase decisions still made at point of purchase.
"One of the great communication dilemmas for many retailers is when to promote the brand and when to talk product and price call to action communication," Treadgold observes.
"You know strong brands deliver secure futures through meaningful differentiation and all of those appealing opportunities which flow through for sales growth and margin enrichment.
"But building brands takes time and costs big money and, in the meantime, you’ve got to stay in the game by persuading those oh-so-sceptical shoppers you offer great products at low prices and never mind the brand intangibles.
"So our letter boxes become ever more full of catalogues we don’t read and our TV screens full of messages we’re not taking in."
SATURATION POINT
Treadgold claims the average person in the US is exposed to 2500 to 3000 different messages every single day. "Little wonder then that they’re buying TiVo personal recorders in record numbers so as to ‘TiVo out’ the ads they don’t want to sit through."
IdeaWorks CEO Steve Kulmar says most retailers specifically encourage customer traffic and therefore rely on ‘product and price’ offers or ‘service at a price’ offers.
Most retailers use either catalogue or press and TV, in which they offer customers a particular product at a particular price, hoping to generate store traffic and sales, he says.
"That’s what we classify as product and price advertising. Brand advertising is where the retailer chooses to make a claim or a statement about their retail brand to build a positive image and create a stronger disposition to purchase from them.
"Once upon a time people used to do separate brand and product and price advertising, and they would take maybe one or two of the key brand creation images such as the strapline, music, how they interpret the logo, or perhaps a presenter wrapped around product and price offers.
"That was a traditional way to do things. I think what we are seeing today is that the brand and product and price advertising are merging."
STRINGS OF THE SAME BOW
Treadgold takes a similar view. "It’s a false distinction to think in terms of either communicating a brand message or a call to action retail message.
"What smart retailers understand is that so-called brand work needs to drive a call to action response and, similarly, product and price advertising needs to deliver and reinforce the values of the brand. "It is only in seeing the two as different strands of the same bow that brand work can grow sales and sales work enhance the brand." It can be done, Treadgold says.
"Interestingly and importantly, there’s a very strong correlation globally between retailers that consistently deliver sales growth and those with the most highly valued brands.
"Tesco doesn’t use brand or retail communication, it is a combination of both. There isn’t a single piece of Tesco brand communication which doesn’t have a retail call to action, and neither is there a product and price piece that isn’t delivered within the brand values of affordable quality."
The Target chains in both the US and Australia also effectively recognise that brand and product and price advertising support and reinforce each other.
Treadgold argues the dual approach is crucial for the US Target, which would be trumped if it attempted to use product and price alone against its major competitor, Wal-Mart.
"If you talk product and price within a theme and with a tone of accessible style, effectively cheap chic, then that creates a relevant and sustainable point of difference. Significantly, Target has outperformed Wal-Mart for several years in numerous key performance metrics."
He warns that when retailers succumb to short term sales pressures and lose sight of their brand values, they can be headed from trouble. He cites the Sainsbury supermarket chain in the UK as a good example of the inherent dangers of getting the balance wrong.
"Sainsbury had an unassailable reputation for product quality and assurance, but damaged its brand, sales and earnings because it talked for too long about low prices, largely to the exclusion of other benefits."
THE RIGHT BALANCE
Kulmar says smaller retail advertisers historically aim to drag traffic to their stores, and therefore tend to concentrate on a great product at a great price or a great service at a great price. "They think to themselves, ‘I’ll worry about my brand later’. I think the reality is that even small advertisers need to plan their advertising with the objective of reinforcing their brand and what it means to their customer.
"They should be thinking: what does my brand mean? What is my unique selling proposition? How do I take that product price offer I want to promote and wrap it in my brand so it is seen as a good product-price offer and generates consumer traffic, but also leave a residual imagery and positive perceptions for my brand?
"I think that is ultimately every retailer’s dilemma in the product-price offer today."
DIFFERENT STROKES
Kulmar says brand advertising and product and price advertising require different media strategies. "If you’ve got news, use the newspaper. If you want to achieve frequency of message for a sale, radio works very well because it is a frequency medium.
"Today retailers, particularly in the branding area, are exploring way beyond traditional medium out into the internet and other forms of communication, to build awareness of their name, and what that brand stands for.
"Smarter retailers also collect information about their customers and build profiles of them so they can communicate directly through focused media such as catalogues, email or SMS messaging." The best, but probably least affordable, media for brand advertising is TV, he says. It works because it can create an experience that relates a consumer to the brand.
While retailers are building brands, frequency and reach are critical to retain a brand message, whereas a product and price retail offer tends to be about short, sharp activity.
"I think it is increasingly relevant today to deliver appropriate product offers wrapped up in brand advertising so you get both a short term effect on sales and a medium to long term impact on the brand. The best advertising is where you manage to combine the two of them effectively," Kulmar says.
Treadgold contends a distinctive and ‘ownable’ style that would be categorised as a brand proposition can drive sales in its own right because consumers who recognise the brand are more likely to tune in to the advertising offer.
"Smart retailers understand they must engage with shoppers in ways which are relevant to them. If one of the defining features of the current retail landscape is competitive congestion, then another is surely media fragmentation.
"When P&G, who can be said to have invented modern marketing communication, says ‘there is life beyond the 30-second TV slot and we must accept there is no mass media anymore and leverage more targeted approaches’, you can be certain we’re operating in a very different and much more complex media landscape."
REINFORCE THE MESSAGE
Rather than brand or retail product and price advertising, Treadgold says retailers should reinforce messages with clear objectives delivered in a distinctive style, creatively using a range of media options. "Some retailers may continue to spend those scarce marketing dollars on the 30-second TV slot, but others may opt for a lead role for the internet, or ‘here today, gone the next’ pop up stores, card-enabled customer loyalty programs, viral campaigns or SMS messaging, or some other media.
"However, the important take-home message that retailers should never forget is that the in-store experience is still paramount."
That view is shared by Bernie Brookes, who headed marketing at Woolworths where the ‘fresh food people’ proposition delivered brand and product and price messages. Brookes, now CEO of the new Myer department store business, says the moment of truth for a brand is the in-store transaction, and the more senses you can touch, the better the results.
Brookes argues feel-good corporate advertising can miss the mark on brand values, particularly where a single business might have multiple market offers or different propositions in different product or service categories.
"In-store activity is the best media for building a brand while TV, the press and other media are the traffic generators. The brand advertising is always long term and strategic, but the product and price proposition is tactical."
Reinforce the message in a distinctive style.’ The Luella Bartley for Target collection hits the road in Manhattan.
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