Tuesday 29th Jul 2014

Thoughts and insights from the World of Initials

Why big British retail brands are being left behind

Posted on July 22, 2014 by

Roger Hyslop, Initials’ Non-executive Director, discusses the importance of brands focusing on their existing target audience to ensure that an engaging shopper experience – in-store, online and on the move – is created to avoid being left behind. His piece, published recently in Retail Gazette, is reproduced here.

 

Why big British retail brands are being left behind

 

HMV last week revealed its UK sales figures – the first since being bought out of administration by Hilco. The new owner has made some considerable changes: trimming the store estate, launching apps and opening a new Oxford Street flagship. As a result, both like-for-likes and in-store conversion rates have improved.

But even now, the HMV website is not transactional, which means customers will be off to competitor websites which stock a reasonable range.

I still question how such a dominant retailing icon could come to the brink of extinction. How it could have missed the online boat not just once but twice? And that’s with a new owner. By persisting with an offline-only retail sales strategy, it’s condemning itself to failure.

But despite all its woes, it’s still a great brand with the potential to become a major player in the wider field of audio and visual entertainment. However, it needs to act fast to grab a place in what’s already a congested online marketplace.

In contrast, Sports Direct, which has taken over the original HMV site on Oxford Street, is one of the most successful money-making machines the high street has ever seen. And interestingly, whilst the layout of the ground floor is a welcome departure from the cramped and crowded souk-style bazaar consumers have learned to put up with, the other floors are sadly reminiscent of the standard Sports Direct décor.

It’s as if the designers have been instructed to tart up the visibility purely at ground level, on the basis that once inside, the customers will seemingly put up with the lacking in-store experience in the rest of the building.

Despite this sadly traditional aesthetic, Sports Direct’s consumers keep coming back. Why? Probably because the sports giant is doing what HMV failed to do: maintain and focus a presence where its customer base resides. For example, Sports Direct is now expanding in Australia and New Zealand, where sports is a way of life.

That said, its poor in-store offering is not going to cut it in the long run. In order to attract a new, more up-market and affluent audience, the brand needs to develop a richer in-store experience. That way it will increase its margins and consumers might get a marginally more enjoyable shopping experience.

Marks & Spencer, on the other hand, has the décor, service ethics and attitude that Sports Direct lacks, but there’s a disappointing familiarity about the merchandise. Despite all the protestations and the glossy advertising featuring people consumers can all apparently relate to, the goods don’t seem to change much – and the brand has received plenty of criticism for it.

Whilst we can all attest to the need for sustainability, are we really engaged with it enough to buy the same safe apparel every season? The answer is no – and proven by its 12th consecutive quarter of declining clothing sales.

M&S could do with a bit of Mike Ashley-style entrepreneurialism and a dash of Philip Green product range flare to drag its clothing into the twenty-first century. It would also benefit from taking note of what some of the big international fashion brands are doing. For example, something that has made H&M such a success is the brand’s regular celebrity designer collaborations.

There’s no quick and easy way to right the wrongs of each of these retailers but I do have one formula. Focus on your existing target audience and make sure you are creating an engaging shopper experience, in-store, online and on the move – or else risk getting left behind. No brand has ever succeeded by trying to please everyone.


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And finally… the brand winners and losers

Posted on July 18, 2014 by

According to Marketing Week, the big winner in sponsor brands for this year’s World Cup was Adidas. On the pitch, Adidas outperformed all competitors, supplying the kits to both finalists Germany and Argentina and having deals with Golden Ball winner Leo Messi, Golden Boot winner James Rodriguez and Golden Glove winner Germany’s Manuel Neuer. The German business dominated Nike on YouTube with 9 milliion views compared to Nike’s 3 million in the last two weeks of the tournament, while it also generated 2.4 times more retweets. Adidas says it is set to achieve a new record in football sales of €2bn this year including more than 8 million official jerseys, 1.5 million more than the previous World Cup.

Elsewhere, the majority of FIFA’s major partners failed to register any noticeable uplifts in positive chatter in the UK around their brands during the tournament, according to BrandIndex. Coca-Cola was the only sponsor to suffer a “statistically significant” drop in its “buzz” score – an average of the positive and negative things a consumer has heard about the brand in the last two weeks – falling 2.1 points to 6.5 over the last 30 days. BrandIndex records that only 4 out of 11 major sponsors increased their consumer reputation score during the tournament.

Our Pundit’s view

It’s not what you say or do, it’s the way that you say or do it. There can be no denying the brand awareness that an event like this generates, but is that what these already globally known brands need? Seems to us that most brands, whether sponsors or non-sponsors, are going to have to work harder in future to translate their marketing investment into the tangible results that their shareholders will appreciate.


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Integrating on and offline in DIY

Posted on July 13, 2014 by

Initials MD Richard Barrett analyses his own personal experience of shopping in Homebase, and finds that the in-store experience, when it goes beyond the merely transactional, can be a fulfilling experience. His piece, published recently in the Guardian media section, is reproduced here.

DIY is sprucing up the in-store experience

Go in for some screws and come out with a fully-fitted kitchen – the in-store offering of DIY is unique and must be preserved.

A woman in a DIY goods store
I confess that my instinctive reaction to the recent inclusion of coffee shops and mini Argos units in Homebase stores was somewhat muted. As a DIY purist I saw these as unwelcome distractions in one of my most beloved destinations.

But I now feel differently. From a retail perspective there is no getting away from the fact that “experience” is everything and people are looking for a relationship – or at least an interaction – when in store. This is true for fashion, electrical and almost every other type of retail, so why not DIY?

Homebase and B&Q are heavily focused on opening up DIY opportunities to those who are less confident, breaking down traditional shopper barriers. Doing that live in-store and in an approachable manner is spot-on for a certain audience. Diversification of products in store also feeds the imagination. So long as it doesn’t feel like being in a shopping mall, then it should be a big hit.

The traditional retail experience is arguably nowhere more important than in DIY, where you go in to buy 100 screws and walk out with 400 of different size and variety, some piping, new radiator valves, masking tape (just in case you’ve nearly run out) and an outdoor security light to boot.

You’ve enjoyed the experience and been inspired by the cross-category browsing. It’s an experience that doesn’t fully translate online, which is why many brands in the space still see in-store as the most important place to have a presence. For wood treatment brand Cuprinol, for example, getting secondary display in the garden section next to the sheds is vital.

The incorporation of slick in-store technology, such as digital screens offering project advice and 3D product imaging at Homebase, provide a rich, interactive customer experience that feels a far cry from the hardware stores of yore: Aladdin’s cave-style retail outlets piled high with DIY knick-knacks.

Shoppers will always want to touch, see and interact with products in the DIY category, whether to find the right sized nail, the right width of a paintbrush or the exact shade of duck egg blue paint. Having recently had an architect at my house, I can say that real-life interaction with a real person trained in a specific skill opened my eyes to a world of possibilities I hadn’t considered, despite a fair amount of time spent searching for inspiration online.

As tech advances to enhance the DIY retail offer both online and off, the category needs to invest in both innovation and excellent shopfloor service to create experiences beyond the transaction.


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Shoppers want exclusivity from new store formats

Posted on July 10, 2014 by

Initials CEO Jamie Matthews has contributed a thought-provoking piece to the MAA-sponsored feature on marketing communications in the Guardian.

Jamie highlights the growing trend for greater consonance between the retail and online environments, together with consumers’ increasing desire for individuality and personalisation in the products they buy.

If you didn’t catch it this week, you can read the article in full here.


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Dave hijacks the Tour de France!

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UKTV channel Dave asked Initials to create a stunt that would bring the personality of its brand to life and ‘Wit to the World’. Together we decided the best way to lend their humour and make the most impact was to join the world’s biggest cycling race, The Tour de France, whilst it was gaining massive publicity for the UK leg.

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So on Tuesday 8th July at London’s Liverpool Street a group of nine cyclists(tightly knit together), in full cycling gear with spoof logos and on very high spec bikes, cycled around to all of London’s main attractions. They stopped regularly to ask passers-by (in suitably foreign accents) if they had seen the cyclists in the big race and if they could help them find their way back to the tour. They kept cycling round until the race ended and beyond. We got photos of them at all the main attractions such as Liverpool Street Station, St. Paul’s Cathedral, Covent Garden, Piccadilly Circus, London Eye and London Bridge.

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The response was overwhelming https://twitter.com/101_London/status/486426252031819777, people were face to face with the cyclists and truly believed they were lost! The stunt culminated with the cyclists being escorted down the Mall which resulted in amazing press coverage for Dave.


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