Even in the midst o\ue003 what may look like a
terri\ue003ying competitive landscape where
companies \ue002ght to live another day, some re-
tailers are seeing an opportunity. As markets
contract and customers have less means
to buy, they change their choice behavior
entirely. Even the most routine purchase
decision is up \ue003or grabs.

In a downturn, customers don\u2019t stop buying.
The desire and need \ue003or satis\ue003action is still
there. A strong brand with a better proposi-
tion has a chance to capture a share o\ue003 cus-
tomer choice that was previously unavail-
able. Yet, while a great brand aura can help
reduce negative impact on gross margins, it
doesn\u2019t change the \ue003act that given insecure
consumers and an industry-wide explosion
o\ue003 competitive pricing, retailers must rely on
discounts to loosen purse strings.

\u201cPromotions to move merchandise are
unavoidable in this climate,\u201d says Greg
Silverman, SVP, Strategy, Interbrand Design
Forum. \u201cBut these are temporary conditions.
Retailers cannot overlook the possibility that
heavy promotions may cause some loss o\ue003
brand equity.\u201d

According to Silverman, retailers that will
win when the economy recovers are those
using brand management tools to \ue002nd and
create new ways to connect with their cus-
tomers. \u201cYou can manage through the short
term on price, but the long term will be won
on brand propositions that are di\ue001erent.\u201d

Companies relatively new to the concept
are wondering i\ue003 a retailer has the chance
to become a brand that inspires the kind
o\ue003 personal connection people have \ue003or the
likes o\ue003 Harley-Davidson or Gucci. Such
iconic \u201ca\ue000nity\u201d brands are the ones that \ue002rst
come to mind\u2014the logos most o\ue003ten seen on
T-shirts. But others are just as power\ue003ul, the
\u201cenabling\u201d brands like UPS or AT&T. Shop-
pers trust them to per\ue003orm an important
\ue003unction, but probably won\u2019t wear branded
apparel declaring their devotion.

Only retailers have the opportunity to be
seen as the designated \u201cagent\u201d brand that
helps people with o\ue001erings and solutions
relevant to their busy lives, their worries and

Costco enables you to stay within budget,
but also a\ue001ords you ego-satis\ue003ying merchan-
dise, like single malt scotch and cashmere
apparel. How retailers manage their brands
will determine i\ue003 they will succeed as a\ue000nity,
enabler or agent.

Says Silverman, \u201cWhat makes the di\ue001erence
is good brand management. It inspires every
part o\ue003 the organization. It\u2019s a \ue002lter through
which all decisions are made. Consistent ex-
ecution at all levels internally and externally,
that\u2019s how you become an iconic brand.\u201d

And with even loyal shoppers \ue003eeling the
urge to roam, it\u2019s high time to remind them
why they \ue003ell in love with you. Stores win
by attracting and brands have the means
to make themselves inviting through the
shopping experience. It conveys the brand\u2019s
emotional, physical and visual perspective;
it\u2019s where those persuasive attributes can
be put to work to generate more value by
infuencing behavior and choice.

The tensions o\ue003 the recession make change
more urgent, and many companies may
\ue002nd this a rare opportunity to move ahead
with speed to make stores work harder and
per\ue003orm better.

Delivering what matters now begins with a
deep understanding o\ue003 the customer jour-
ney. How does she navigate the media bom-
bardment, her own time-hassle economics
and the de-selection process in the store?
With that kind o\ue003 insight retailers can cra\ue003t a
brand experience that delivers the right ideas
at the right moments. E\ue001ort and capital are
not wasted\u2014they are optimized around the
customer\u2019s needs. In other words, success

requires a greater understanding o\ue003 the me- chanics o\ue003 brand value creation and decision making.

\u201cThe past \ue003ew years have created an explo-
sion o\ue003 predictive tools,\u201d says Silverman. \u201cWe
can now, with high degrees o\ue003 precision,
measure the likely revenue and brand impact
o\ue003 a creative, strategic or operational idea.
We have witnessed dramatic improvements,
such as sale increases and capital decreases,
with the use o\ue003 market simulations, optimi-
zation models and primary research.\u201d

Insight into brand infuence allows you to
deploy that knowledge into the store envi-
ronment in a way that connects to shopper
emotions and responds to their concerns.
Analytics also help with the necessary
tradeo\ue001s \ue003orced by budget caps by ranking
touchpoint investments according to return.

Intelligent branding enables retailers to
gauge brand strength\u2014that is, their di\ue001er-
entiation, relevance, ability to innovate, in-
tegration o\ue003 touchpoints, \ue003ormat strategies,
merchandise mix, service and experience.
The gaps or overlaps are where the incre-
mental opportunities are. Filling in those
gaps ratchets up the shopping experience
to win new shoppers and a greater share o\ue003
loyal customers.

\u201cIt\u2019s never been a more exciting time \ue003or
retail,\u201d says Silverman. \u201cWe have moved past
the era o\ue003 scale and now we are into the
brand management period. Where our his-
torical \ue003ocus was principally on merchandise
and presentation, we are now looking at the
entire experience and how all the parts and
pieces come together to create a brand.\u201d

It\u2019s going to be a tough year. Headlines call-
ing out \u201cthe epochal crisis o\ue003 capitalism on a
global scale\u201d will be served up every morn-
ing with break\ue003ast. Wrenching job layo\ue001s
and business closings will be waiting on the
desk at work, and the actions o\ue003 a new U.S.
president calling \ue003or \u201csacri\ue002ce\u201d will dominate
the conversation over evening drinks.

But even as we dig in \ue003or a prolonged down-
turn, we\u2019re already anxious to know what
awaits us when the dust settles. Will retail
ever be the same again?

That, o\ue003 course, depends on people.
Americans are expected to be hit with 2 mil-
lion more job losses in 2009 along with the
combined loss o\ue003 $10 trillion in household
assets. A con\ue003rontation with our debt culture
and broken health insurance system has had
a sobering e\ue001ect on us.

We\u2019re trading down instead o\ue003 trading up,
repairing instead o\ue003 replacing, dining in
instead o\ue003 out, and all in all revalidating our
brand experiences according to value. While
\ue003rugality is good \ue003or consumers, it\u2019s bad
\ue003or retailers.

Lee Scott, outgoing president and CEO o\ue003
Walmart Stores, believes that people have,
indeed, \ue003undamentally changed and are not
\u201cgoing to have the same immediate desire to
go back to consumption and debt.\u201d

For many consumers, that will be true. But
\ue003or others, this is just a speed bump. They\u2019ll
return to their \ue003avorite luxury brands mixed
with mass purchases as soon as they begin
to see their home and stock equity rebound.

In the meantime, however, as stores
vanish with consumer assets, we\u2019ll see a
recalibration o\ue003 retail happening over the
next several years. Weaker players will
continue to close underper\ue003orming stores or
consolidate. And as usual, private equity will
have its eyes on the real estate.

New store concepts will most likely have
smaller \ue003ootprints, greater energy e\ue000ciency
and reduced inventory that gives shoppers
optimum choice instead o\ue003 endless choice.

A di\ue001erentiated experience with heightened
customer service in more exciting surround-
ings will be one o\ue003 the strategies adopted to
engage shoppers. We\u2019re currently advising
our clients to allocate resources to improve
the shopping experience, with a\ue001ordable
but meaning\ue003ul innovations designed to
encourage an extra cash register ring and
inspire loyalty.

The winning retail brands will be those that
adopt strategies in\ue003ormed by shopper in-
sights to re\ue003resh their brands, invest in store
enhancements in key markets and evolve
the value proposition to meet the changed
behaviors o\ue003 their particular segment.

In all these decisions, it will be vital \ue003or retail-
ers to in\ue003orm themselves with new shopper
insights. Because we might be looking at a
cultural change as \ue002nancial conservatism
dovetails with another macrotrend, conser-
vation and sustainability.

It\u2019s hard to imagine Americans adopting \ue003ru-
gality \ue003or its own sake, but with a larger goal
in mind, a signi\ue002cant segment o\ue003 the popu-
lation may shi\ue003t the paradigm. And since
retailers and shoppers infuence one another
mutually, retail may pro\ue002t \ue003rom the change
by helping shoppers \u201cindulge in thri\ue003t\u201d and be
good stewards o\ue003 what they have.

Thri\ue003t is a means o\ue003 thriving by applying \u201cthe
discipline o\ue003 wisest use\u201d\u2014something we rou-
tinely recommend to our clients. The record
number o\ue003 \ue003reezers sold last year to consum-
ers who\u2019ve switched to buying consumables
in bulk might be an indicator o\ue003 the search
\ue003or a smarter way to live well.

According to behavioral economic theory,
advance purchases like a case o\ue003 wine are
thought o\ue003 as investments rather than
spending. And consumption o\ue003 a good
purchased earlier\u2014a bottle o\ue003 wine served
at dinner\u2014is considered a savings, and even
thought o\ue003 as \ue003ree.

Meanwhile, resources are limited and ten-
sion is high. The time is ripe \ue003or innovation,
and I\u2019m hoping to see a world-upending
idea or two be\ue003ore it\u2019s over. We\u2019ve got new
media, demographics and ideologies\u2014next
is new retail.