Store Branding Takes Center Stage

Two must-reads for retailers in Advertising Age’s CMO Strategy section this week (August 25):

Get in the Game or Lose: Why retailers must track the entire customer sales pipeline

Why does a shopper put your store on the short list when considering a purchase? Apparel and footwear shoppers want the latest trends, while consumer technology purchasers seek brand names and home products buyers want a broad selection. NPD Group developed a fascinating stack of data about what drives consideration — what consumers look for in retailers.

Discounts, value, special deals and services don’t matter nearly as much — and despite what a million real estate developers might say, location, location, location placed near the bottom in three categories and dead last in apparel.

“It’s imperative that retailers track the entire customer-sales pipeline, with a special focus on consideration,” Dee Warmath, VP-retail insights, writes. “You need to understand the customers’ requirements, or what they are evaluating in the decision to consider a given retailer for a particular category. In most cases, what gets you into the game will be different from what matters in a purchase decision.”

The Newest Brands? Open for Business: Retailers have switched gears, marketing their stores and their own labels and strengthening bonds with shoppers

On the facing page, DraftFCB’s Jim Lucas argues that retailers have evolved beyond their historic role as a link in the distribution chain for national brands.

“Rather than just establishing loyalty to branded products, retailers want voices of their own,” writes Lucas, who is executive VP and director of the shopper marketing division of the Chicago ad agency. “They are seeking to establish their own brands, and they are doing so by tailoring their customer experiences, differentiating them from their competitors’ and creating better, ongoing relationships with shoppers.”

How? By strengthening customer bonds with well-crafted private label products such as Safeway and H&M, strategic loyalty programs such as Kroger’s and Tesco’s (both developed by Dunnhumby), and strong value propositions such as Aldi.

It’s a complicated task — much less straightforward than marketing a traditional CPG brand, Lucas notes — and manufacturers need to consider their retailer partners’ branding needs and figure out where they fit in the mix.