Tom Child
Dec 12, 2013

Innovate for success this Christmas

Retailers will have to embrace change and become more innovative to repel the growing threat from online competitors.

Tom Child
Tom Child

As the crowds start to pour into shopping malls around the region for the festive season, retailers are faced with an ever-increasing problem that threatens the existence of their ‘bricks and mortar’ stores. Many retailers this Christmas will find that not all consumers are there to purchase but are sampling goods only to return home and purchase at a cheaper rate online. The trend of ‘showrooming’ has been the menace of many a retailer in recent times and with online stores such as Amazon.com offering huge savings, many brands are being forced to be more creative with how they are selling their products.

Many brands have responded to the threat of showrooming by simply price-matching or offering cash incentives for purchases made in-store. Currently big box retailer Toys’R’Us is offering Citibank customers $10 rebates, and are looking to other discount strategies to lure customers in.

The longevity of such strategies has yet to be tested, and as online retailers strengthen distribution networks and advance back-end technology, price matching will be a war not worth waging. Some retailers have seen the value in their position of being able to offer face-to-face time with consumers and see their added value being through after sales services and advice as customers seek the right product.

In fact, there have been some stores strong enough to tackle showrooming head on and attempt to reverse the process altogether. Several large US retailers such as Target have installed Wi-Fi in store and encourage users to browse online to find what they are looking for, then offering price-matching deals to close the sale.

What about the brands whose margins cannot offer such cost savings? There are many ways in which a brand can add real value without being subject to a price war. The power of any brand is in its ability to consistently deliver on its promise and pricing strategies must be seen as only one way in which to compete. Brands communicate over a plethora of touch points and can reinforce their promise in a variety of different ways. From the environment in which the brand lives, the employees who reinforce the brand, and communication tools that spread the messages, there are many diverse ways in which to amplify the brand’s value to the consumer.

Every successful brand is driven by one single compelling idea, and engaging stakeholders with this message can be the true driver in building stronger bonds with consumers. Retailers need to work on what makes them stand out from their online competitors and use these to their advantage. Brands must work harder to engage consumers in the whole customer journey, creating a branded experience that surprise and delights and more importantly, converts to sales.

Shanghai Tang and Uniqlo both do a great job of offering a very different in-store brand experiences and are unique in the retail space. Globally we have seen Abercrombie & Fitch pioneer a brand experience that fulfills the overall promise whilst also enhancing the sense of exclusivity that comes with only being able to purchase official clothing from them directly. 

Smartphones are also being used to enhance the user experience, such as Singapore’s Marina Bay Sands whose mobile app offers destination navigation, product information and availability. This digital interaction, if done right, can engage users and give opportunity for a dialogue between brand and consumer. Engaged staff will also act as a catalyst in creating the total brand experience and in essence remain the key ambassadors of any brand. A unique brand experience that is relevant to the overall brand idea will resonate with consumers and is something that can’t only be replicated online.

Retailers must embrace change; it’s as simple as that. Without flexibility in what they do or willingness to listen to what the customer wants, retailers will feel the impact of a downward trend in sales, and online competitors will continue to take market share and increase their sales revenue. Retailers who use innovation to create positive brand moments and challenge market conventions, will be the ones to benefit this Christmas.

Tom Child is a strategist with Landor.

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