Why is retail brand Better?

Branding is vital for today’s retailers. When each and every organization is contesting for recognition, it is challenging to compel the audience without a strong brand image.

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The rapid advance of e-commerce and the growth of social media platforms as digital storefronts have stirred up the retail industry. While traditional retail marketing has undergone significant disruption, retail branding has attained a new meaning. Branding allows retailers to enjoy lucrative benefits like enhanced customer recognition and loyalty, a competitive market edge, and much more.

Why and How Does the Retail Industry Use Branding?

There was a time when the term “brand” was only applicable to products and not to retailers. However, today with so many retailers (both online and offline) vying for customer recognition, branding is applicable to retailers as well.

Present-day marketers know that a higher level of differentiation brings higher profitability to an organization. Successful retailers like Lululemon and Patagonia have used this central idea of differentiation to gain long-term customer loyalty and create a sense of authority in the market. Establishing a prominent brand image can be a challenging task for retailers, but uniform and standardized performance along with the right brand message can help them achieve success.

Top Benefits of Branding for Retailer

Retail branding is more than just advertising and selling goods to consumers. It is a complex process that requires expertise to succeed. Branding drives leads to a business by improving brand metrics and encouraging audiences to have a positive perception of a company. Listed below are some of the main benefits of proper branding.

Develop Recognition

A proper branding strategy provides the company with recognition from its target audience. Through digital marketing platforms, retailers are able to establish a presence and favourable recognition in their niche.

Improve Business Value

To stay competitive in a busy industry, retailers should focus on increasing their brand value. Brand value can have a significant impact on your business performance since modern customers are often conscious of the values behind the brands they buy.

Generate Leads

Effective branding can create strong bonds with prospective customers. Through consistent, positive branding, people who may be unfamiliar with your brand will get a better idea of the benefits your company offers and will be more likely to join your customer base.

Build Trust & Loyalty

Branding, when done properly, establishes trust and loyalty among consumers as well as a new audience. Once the consumers start trusting a brand, they become loyal and are unlikely to turn to competitors.

Satisfy Employee Pride

Employees of a strong brand feel more empowered than employees of a less reputed brand. An employee that believes in the brand they work for is likely to perform better at work and promotes their brand to their peers.

Improving Your Retail Brand

For a successful retail business, entrepreneurs must invest in establishing a strong relationship with their customers. To create that experience and build a brand identity, retailers must consider hiring marketers with prior experience in marketing and branding.

While there are multiple channels and avenues about retail branding strategies, nothing can replace the skills and experience of a marketing strategist. With their strong knowledge of marketing and branding, they make the process easy and effective.

Being Meaningful

To generate meaning requires delivering connection and progress to the customer. Brands that excel at connection are those that are true to the individual’s functional and emotional needs. Rather than projecting a corporate one-size-fits all, they create a sense of belonging or immerse customers in a personalized experience. Chick-fil-A exemplifies strong connection through a focused brand proposition. Those with connection also demonstrate that they have the customers’ best interests at heart. How many brands offer their best deals to existing customers on an ongoing basis, versus only to acquire new ones?

Progress involves helping customers do things they couldn’t do before. It’s produced through functional innovation: better performance, easier to use, and setting the standard. Technology brands such as Uber and Airbnb are good examples of companies that have created entirely new markets through functional innovation. Another form of progress is how brands help people build stronger relationships with those around them, whether it be close family ties like Disney, shared passions like Pinterest, or doing right by society like Patagonia.

These two aspects of meaning are grounded in our biochemistry: We intrinsically seek connection and progress. Oxytocin is our bonding hormone, dopamine our drive to always find the next new. Brands that evoke these hormones in an experience and in our memory of that experience are those we find most meaningful.

To remain meaningful for any sustained period requires building both connection and progress. Without connection, brands lack loyalty. Without progress, there is a risk of disruption. We may love Netflix, but with many alternatives, some of which are free, Netflix has lost subscribers in the US this year. For some, love just isn’t enough.

What's Meaningful To Shoppers

A foundational requirement is to know the audiences with which you want to be most meaningful. While this might sound obvious, many retailers typically segment customers by behavior, instead of attitude, and then seek to gain share with those delivering the greatest basket value. A challenge with this approach is that while the “what” is economically attractive, it doesn’t provide insight into the “why” they shop, which varies dramatically across shoppers. Historically, segmentations grounded in attitudes have been challenging to activate due to the difficulty in targeting, but new marketing technologies make it possible to pinpoint attitudes.

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Two dimensions that we’ve found to be particularly discriminating in food retail are price sensitivity and the desire to eat healthier. In simplistic terms, this covers four distinct audience archetypes that will seek out different solutions where those are available as shown by Exhibit 2. The introduction of Plant-based by ASDA, a vegan line, is an excellent example of addressing an underserved that can’t afford premium brands but is looking for better quality in what they eat. (See Sidebox: “How Private Label Can Add Meaning to Your Brand.”) With clarity on the functional, emotional, and social needs of the target audience, it becomes more straightforward to see how they can be served in a meaningful way.

Building Meaning Through The Experience

The most urgent need for most retailers is to ensure that they are the preferred destination for shoppers, which entails offering an experience that they can’t get elsewhere. We see others evolving the role of physical retail: Best Buy is thriving in part due to the expertise and helpfulness of its employees around a complex purchase; Showfields makes discovery a magical experience; Starbucks is evolving its stores to reflect the majority of orders now being made ahead of time through its app.

In food retail, private label, the most comprehensive example of a signature experience, can define a retailer as a destination when done well. The common thread here is that each example creates a destination that provides an emotional lift for the shopper and a point of distinction for the retailer.

The Role Of Brand

For many operators, brand is just a coat of paint to be applied by the marketing team. This fundamentally misunderstands what we mean by brand and its power as a business asset. Amazon’s Jeff Bezos said it well: “Brand is what they say about you when you leave the room.” It’s the heuristic we use as shorthand for every interaction we’ve ever had with a company, whether through personal experience or word of mouth. It’s the missing multiplier for why perception of performance can be very different from objective reality.

So how can a brand be made to “work harder” in the interests of the business?

Innovation is hard, particularly when you’re faced with the challenge to “just be better” than the competition. The fact that so many physical retail stores are considered interchangeable by shoppers is a testament to the lack of innovation that has occurred over recent years.

Brand provides a rich source of ideas for how to innovate beyond functionally performing better (which can be both costly and rapidly competed away). Being known for helping customers build stronger relationships with those around them is 1.5 times more influential than functional improvement alone. An advantage of this more emotional and social contribution to progress is that ideas linked to your brand idea can’t be directly implemented by others. The wine bar at one grocer isn’t going to be replicated by its competitors; it’s just not consistent with their proposition.

A clear brand strategy also helps focus innovation for private label and what should be a major source of destination for shoppers. Were any of us aware of the sheer breadth of what cauliflower is capable of before a single retailer made this a focus of their proposition? They almost singlehandedly raised the profile of this humble vegetable in the minds of US consumers.

Brand can also help perception lead objective reality, as functional performance is challenging to directly measure in food retail. What’s the quality of your produce?  Objectively, we can measure time from farm to shelf. We can also measure attributes around the care taken during that transit. However, for the shopper, none of this is visible. They will measure quality based upon shelf presentation, how employees treat the product during stocking and checkout, and then how long products remain fresh at home.

If consumers believe your brand stands for freshness and quality, their confirmation bias will reinforce evidence that supports that and mitigate examples that contradict it, literally chalking it up to “one bad apple.” It’s the brand heuristic at work.

How Private Label Can Add Meaning to Your Brand

Private label is a critical lever for determining future success. While other countries have penetration rates that approach 50 percent, the US consumer remains primarily a national brand shopper. US private label has been dominated by me-too, lower-priced facsimiles of national brands developed by under-resourced teams. This has led to inconsistent quality, poor packaging design, and shoppers purchasing out of a need to economize, rather than out of desire.

Some notable leaders that are predominantly private label have demonstrated that these products can be both better quality and lower cost. A strong private-label offer lowers the shopper’s total spend while also improving the retailer’s bottom line. It also delivers must-have SKUs that a shopper can’t get elsewhere.

It’s no surprise then that we are seeing an exciting period of private label expansion. We are seeing resistance from many firms, retail and wholesale, to adequately fund their private label teams. This will limit a much- needed source of competitive advantage. Incremental improvement won’t be sufficient.

However, no store experience will deliver without the engagement of employees, from their pride in keeping the store clean and well stocked, to how helpful and friendly they are in shopper interactions. In a high-turnover industry with relatively low hourly pay, it can be challenging to keep teams motivated.

Just as brands need to be meaningful for customers, they also benefit from being meaningful for employees. Connection is built from love for what they do and pride in what is delivered for customers. Progress comes from personal career growth and what work enables them to achieve in their life.