This one is in the category: WHY DID I NOT THINK OF THAT
The curse of retail drift, and how to avoid it
A common mistake seen in all sizes and in all categories of retail from fashion to shoe stores, from fast food to pharmacy is ‘drift’.
You see it in many products and brands, not only in retail. When Hyundai launched here, they were positioned as low-cost entry level motor car. Over time they add features and the price creeps up. This is called ‘image drift’; as the brand seeks to become more prestigious.
The executives always find a (rational) reason why that must be so.
But of course another executive suite argues (perfectly rationally) that this gap presents a good business opportunity and very soon there is a new entry-level, low cost brand. (Hello Kia.)
The process repeats itself again and again. (Hello Ssangyong and then Great Wall ad infinitum.)
Image drift is the love child of feature creep, and the step child of ‘retail (proposition) drift’.
- The Fish & Chips shop adds chicken burgers and then hamburgers and then coffee.
- The Pharmacy adds beauty products, then shoes, then home wares and finally pet food.
- The Ladies Shoe Store adds Men’s shoes, then kids’ shoes and then athletic shoes and then school shoes and then bags and then belts.
These are all examples of the BLUE ARROW options in the diagram above. They chase the volume; seduced by the marginal sale. They convince themselves they are chasing an increase in basket size with no clear understanding of what it does to their offer and to their brand and to customer perceptions of their proposition.
Do you go to the Fish & Chips shop to buy hamburgers? Of course not. When the Fish & Chips shop does start selling hamburgers, it is Corner Café – an entirely different proposition.
Does a woman looking for those really special shoes (insert favourite band here) really want to wrestle through the aisles cluttered with kids and trolleys?
Too few retailers go for the RED ARROW option – because they would be going uphill. Only a rare few even hold their position.
The reason why great retailers are great is that they achieve consistency. Lowes is a great retailer for that very reason. And no wonder they are more than a 110 years old. Good brands like Sportsgirl, Reject Shop (please get rid of that annoying auto play video) and Country Road have owned their proposition for as long as I have known them. (The Reject Shop resisting the temptation to go online shows to me that they understand their business model and proposition well.)
This does not mean you cannot re-position or adapt, but changes and additions ONLY work when they fit the original proposition.
McDonalds introduced fresh options to their menu and added (real) coffee. McDonalds is about fast family food and the menu is modernised to reflect the tastes of their market, so that works.
Similarly there are newsagents who added gifts. If you are selling cards, the same customer is happy to buy a gift for the same person on the same occasion at the same place.
But if Dominos starts selling hamburgers, you can be sure to start selling your shares, because savvy consumers will perceive that as a cynical attempt to capture an additional sale.
In the long run, chasing that shiny, seductive incremental dollar at a lower margin is a counter-productive chimera that will destroy your business. It kills your brand; the goose that lays the golden eggs. (E.g. Toyota could not become Lexus, they had to create a new brand instead.)
Two strategies that you could consider instead are:
- A service company should ‘productise’, and product companies should create services. For instance, BMW did it with BMW on demand. Patagonia’s Common Threads Partnership is an example of how Patagonia facilitates (offers the service) the recycling of their own clothes. This is completely counter-intuitive, but it is exactly the right thing to do.
- Strengthen your proposition by purifying it and focussing it. If you sell Fish & Chips, sell fish and chips that would make Jamie Oliver proud. That is, add some organic fish cake or gluten free batter or whatever. Become a Fish & Chips shop worth visiting because the service and the offer together provide a unique and special experience. (I am not suggesting the shop becomes ‘swanky’ – just different and interesting and worth visiting.)
"Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to," said the Cat.
"I don’t much care where--" said Alice.
"Then it doesn’t matter which way you go," said the Cat.
(From Alice's Adventures in Wonderland)
Adding lollies on every counter is lazy retailing and a sure sign of a retailer drifting down the road to nowhere.
Read this: warts and all about Fifty Shades of Failure: A Personal Confession.
Ganador: Learning & Development for the 21st century retailer dealing with the 21st century consumer.
I read some interesting
- 96% of cancer patients in a hospital claim to be in better health than the average cancer patient.
- 93% of motorists consider themselves to be safer-than-average drivers.
- 90% students see themselves as more intelligent than the average student.
- 94% of college professors said they are better-than-average teachers.
- Ironically, 92% said they are less biased than average, too.
The psychology term for this is illusory superiority. (Delusions of grandeur is the less kind way to look at it.)
I can write a long post about that. Or I can ask you to think about it.
Instead, I will ask you to do (as the author did) to:
- Imagine that you are not as smart as you think you are
- Imagine you are not as experienced as you think you are
- Imagine that people don’t care as much about you as you think they do
- Imagine that your brand is not as strong as you think it is
What comes next?
What would YOUR logo look like if these principles were applied?
This happened in a supermarket (John Lewis Foodhall, London.). That is not new. That it happened is not new. But look carefully at:
(a) the number of p[hones the crowd produce and
(b) read the comments on the original YouTube
... and consider that I am writing about here and that the original link was forwarded to me via email.
THAT is the power of the network.
Thank you to all who participated in the short survey. Do you want to know what you think of me? Have a look below for the feedback and summary. The sample size was 43. For the sake of clarity and emphasis I will round the ratios. (NOTE: A few late entries came in, but did not alter the substance.)
WHY DID I NEED TO KNOW?
In a business like this, constant reinvention is required. As a rule of thumb, a good consultant will earn 50% of revenue from products/services that did not exist 3 years ago. (Some would argue.) That suits me fine - I like change and mixing things up and I have created several successful and unsuccessful products/services over the last 7 years.
Secondly, business has been quieter in the last six months, and I could not put my finger on why. that might be so. (Given that we do a lot of work in retail turnarounds, the GFC worked to our advantage somewhat.) I wondered if people understood what I offered as much as understood what my brand stood for.
Thirdly, and most importantly, I have found two polar opposite responses when I engaged with people:
Response 1: Some people had an expectation of getting free/cheap services work and did not seem to value what we do as a business. (One recent example is where we changed a retailer's sales trend from -31% to +8%. After completion of the engagement, we did not even get a thank you. (The supplier paid for the intervention.) One of the consultants we sometime work with was offered $20 cash-in-hand.
Response 2: On the other hand, some people may write to me and say things that seem to suggest that we are on some pedestal and even unapproachable - and sometimes even say that we only work for the big end of town. (We do focus on working with the supply chain (landlords/brands/wholesalers,) but not exclusively. I would hate to think that we are perceived as too high-end or too expensive etc. Worst of all, we very much believe we are approachable -- to anyone.
So we wanted to find out what you really think.
The audience is almost evenly split 55% Retailers and 45%
View of the Brand (Dennis Price/ Ganador)
I have summarised the range of responses into three broad categories: edgy, expert and informative. Those three categories form a natural hierarchy from most exciting to somewhat bland. That is, the majority of respondents described Dennis/Ganador using words like ‘interesting, provocative, makes you think, different’ etc. I have used the label EDGY to capture those responses.
Another 30% used words like expert/ specialist/ consultant/ adviser. These are also positive associations but from my point-of-view, do not discriminate my brand sufficiently. (It is rather generic.)
The rest are what I would consider fairly dull associations such as provide information, provide news etc. And of course there were two respondents who had negative brand perceptions. (‘Ignorant’ and ‘self-serving’.)
I would have been happy with more negative perceptions because it at least it demonstrates some cut-through; but of course ‘not knowing your stuff’ has no positive value. One thing to note is that many people who would hold negative perceptions of Dennis/Ganador brand would NOT bother to complete the survey.
Digging deeper into these differences, an interesting fact emerges. Within each category (retailer, brand, service provider etc) around 75% of the responses would be classified as ‘edgy’. However, amongst the independent retailer group (about 40% of the respondents) only 39% used the same type of descriptors.
This means that a minority of this cohort (independents) used those same descriptors. I find this particularly interesting. (With a bigger sample it may smooth out a little, but probably not much.) The independents either described my brand using words like ‘expert’ (27%) or informative and both negative responses were within this group.
There are two explanations: Either more than half the Independent Retailer cohort does not recognise/appreciate the essence of my brand correctly and almost everybody on the outside does; OR I am fooling the suppliers/brands etc and more than half the Independents are 'seeing through me.'
Your biggest business need
I have classified the range of responses as per this image below. Upon closer reflection there are really only two categories of needs.
- Growing the Business 63%
- Running the Business 37%
What surprised me was what was NOT there. Only one person mentioned online and another mentioned online marketing. I would have expected a greater emphasis/issue around the adoption of technology and going multi-channel.
What does all this mean?
The reason I did this exercise are explained above: I was curious to see if my branding efforts have paid off over the years. I have certainly wanted to position the business as leading-edge in terms of thinking, but contrarian and different – not the same old, same old.
My reasoning is that:
(a) most businesses will be familiar with ‘same old same old’ and that in time when you need change or assistance you will need someone who is at the forefront and thinks differently about the challenges and,
(b) it suits my personality. Because we always intended to trade to as a ‘boutique’ consultancy, our brand had to be authentic and could only be so if it aligned closely with the individuals in the business. (And it is safe enough because I do have a business partner that can pull me in line when I am too close to the edge…)
So I can be assured that my brand perceptions are at least on the right track: who do you go to when you need new/fresh/different strategies/solutions/skills?
If I want to do business with you, then I must focus on how you can grow/develop your business. For instance; we have not renewed our RTO license because we found that demand for training was declining and that the way in which the government curriculum was focused on compliance and not performance. It makes sense that this type of training is not valued as it does not clearly contribute towards growth. (Training programs focused on new selling and persuasion techniques on the other hand are more popular.)
THE GOOD NEWS
You need strategies, skills, systems = SOLUTIONS to help you grow your business. (Or jump the curve as we like to call it.) That is what we do and that is more or less what you need.
THE BAD NEWS
We seem to be positioned more as an information provider (albeit interesting, different & provocative). Information is not a solution - so we have to work harder at clarifying our offer.
Thanks again for taking your precious time to contribute.
If you have any comments about the interpretation and findings - please comment below.
The Dove campaign has been featured here a few times as an example of 'authentic marketing' . This dates back some 6 or 7 years when I first introduced it to my MBA class. AT the time I noted that one big risk for this positioning strategy was that it was impossible to turn back and adopt a traditional positioning w.r.t. beauty.
They are certainly sticking with it...
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A simple short video (HT Neil Perkins) about Apple's design philosophy and approach. The KEY - I believe will be found at around the 30 sec mark with the first step.
Students of Marketing will be familiar with Kotler’s typology that identifies the transition from a product >>> sales >>> marketing orientation. That was a brilliant insight. He even foresaw the shift towards ‘societal' marketing:
1. The production concept (World War eras)
2. The product concept (Post WW2)
3. The selling concept (1950s)
4. The marketing concept (1960s onwards)
5. The societal marketing concept (now)
The fundamental assumption of this schema is that marketing is something that marketers do and the consumers are subjected to. Oh, how things have changed.
Consider the diagram below to understand the evolution of marketing. (You won’t find this in a text book, so if you are an actual student, don’t reference this as an absolute given – it is my interpretation of how marketing is shifting.)
We are all familiar with the early years of mass communications (radio and TV and the advertising that accompanied that era.) In Australia I gather this is the era of Louis the Fly.
The explosion of media including specialist magazines and local stations gave marketers the opportunity (or forced them) to became more sophisticated in choosing their channels and their messages.
Technology enabled real niche-marketing, which became viable because of global economies of scale. Entrepreneurs could start to leverage the long-tail opportunities.
Ubiquitous marketing of the message was also enabled by technology. You could see the same message on any device, on any channel, inside and outside the home. (I think Tom Waterhouse marketing is a good example of this. J)
Marketing that is embedded in the everyday experiences of people. This is become more prevalent in the online world (see this post), the emergence of The Internet of Things is going to make and break many marketers.
The march towards consumer empowerment finally culminates with the consumer being fully in charge. The only real ‘influence’ will be the social circle, and for the rest, the consumer will open themselves up to information about products as and when they need it.
The three key features of On-Demand Marketing are:
- Now (in the present)
- Simple (try 140 characters message or 9 sec video on Vine)
I am not suggesting for one minute that any organisation abandon TV/ Newspapers/Radio etc. Like with most things in life, the transition is a process that takes time and large numbers of people are still effectively reached via TV advertising. (You may reach me, but not my son, for example.)
What we need to do is to start the thinking processes to design our retail proposition to be future-proof. Unlike most other transitions, the final transition means that once you have lost out on the opportunity, you may have lost out permanently. The first-mover advantage will be enormous.
The starting point is to conduct a brand audit to really understand what it is AND how customers think about your business. This marketing evolution also drives home the point that you don't actually 'own' your brand - since your brand is what the customer thinks it is.
I would love to hear some stories in the comments about how you are already embracing these changes.
And a quick pop quiz: how many organisations are still stuck Stage 3 of Kotler’s hierarchy?
Future-proof your business with Ganador.
PS: I am preparing a presentation about these big picture shifts for a conference that I am doing for free, so I thought I will share the love around if you are interested in that sort of thing. See HERE for those interested. (No strings, but limitations apply, so be quick.)
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Sometimes it takes a brave brand to inject some fun... but it is such a fine line. What do you think? (Video)