Integrating the brand offering to the actual brand experience is the big next step in the retail world. Conversion from communication to experience will be a key brand driver.
Over time, key differentiators have moved through output, price, quality and choice. The new differentiator is experiential delight. Fulfillment must follow the initial offer and indeed surpass it!.
Example: Cell C: ‘you've seen the ad now visit the store...'
Shopper marketing (in-store activities, such as TV, floor and shelf-ads, signage and displays) is growing by 26% a year at the expense of traditional media. It's about understanding the required shopper response, crafting and exposing a stimulus at point of sale and ensuring the consumer response exceeds expectations.
The moment of truth in a retail environment is when a shopper stands in front of the shelf and makes a product choice. Consumers face over 3000 impressions a day from advertising, promotions and word-of-mouth recommendations to store displays and pack design – and all these impressions attempt to drive and influence moment of truth choice.
Boots in the UK has 1500 stores and one billion store visitors a year. Their research shows that 30% of sales are motivated by point-of-presence appeal. As a media element, in-store promotion will become hot property as bigger brands jostle to appeal to customers at the point-of-sale.
‘Cross-selling' and ‘occasion-clustering' is becoming increasingly common. It's about the sum of the parts. Gin, tonic, pretzels, the cooler box and an umbrella is a much more compelling proposition when packaged - than the individual components – and we'll see much more of this.
Research also showed that good design also convinced 55% of Boots' customers to part with their money… “Because they saw it”. We are in no doubt that: ‘Retail detail (design) influences choice'.
Attract, engage, entertain. It's communication first, sales second.
Recognising the value of retail space and utilising it effectively and memorably is the stuff of winners. Research shows that 75% of buying decisions are made in front of the product. Shop windows aren't platforms for dressed-up mannequins anymore. Store shelves aren't simply functional spaces – they're increasingly being recognised as valuable – and even tradeable - media canvases.
Retailers are using digital technology and communications to drive store trials, track shopper behaviour through real-time price adjustments and of course, to attract the customer's attention. Electronic pricing at point-of-sale is becoming incredibly sophisticated and innovations such as virtual coupons via cell phones are already old news. ‘I have received SMS coupons from Nedbank as well as Wetherleys over the last three days alone.'
Kiosks and temporary pop-up stores – both physical and virtual - are becoming branding opportunities. One day they're there, and two weeks later, they're gone. They become talking points. Communication comes first – sales second.
Not so long ago, retail brands had an average lifespan of five to seven years. Now it's more like three to five years, and in the Far East, it's even shorter. In Singapore retailers have a fixed lease for thre years only and then are forced by regulation and tax incentive to re-image or move location. This effect means constantly refreshed tenant mixes.
Internationally, concept stores are big business. They're defined as stores that enhance the purchasing decision through a unique, differentiated experience associated with the brand.
Stepping up from concept stores are brand spaces which attract consumers simply because they want to be there – not necessarily because they want to buy stuff. They're aiming to become a useful part of the consumers' lives, offering opportunities to surprise, discover, empathise and transform.
The rules for the future are stores that offer spaces to hang-out in, experience the product for free, possibly solve an everyday problem and that empower the consumer through education. It's about offering a beneficial relationship to the consumer.
Building a passion for the brand is key.
Local clothing and outdoor retailer, Cape Storm, is ahead of the game with its customer relationship management. In-store social events, information-sharing forums and regular email communication build cohesion amongst the followers and ensure brand loyalty.
Other retail trends such as going green, social responsibility, the ‘Eve'-olution (women make 21% more purchasing decisions than their male counterparts), and the return to nostalgia brands continue to drive consumer choices and brand strategies.
