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091409 Idea Issue4 Web 3pg

091409 Idea Issue4 Web 3pg

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It’s a given that today’sconsumers escapetraditional demographicconventions. Attitudesand values are a betterpredictor o shopperbehavior than age andincome. Decoding them requires a moresophisticated, analytics-driven approachto shopper research. These tools allowretailers to map the decision processes o each o their segments and identiy boththe connections and the gaps. Those withthe highest potential to engage the shoppercan be redesigned to be more eective.This is where the idea o brand “touchpoints”comes into play. In the past, customerswere “touched” by companies through thestore, an associate or the telephone. Itwas easy to imbue those moments witha cohesive and consistent brand style. Ina Web 2.0 world, the touchpoints seemalmost innite, rom web pages to tweets.In the analog world they include new storeconcepts such as those planned, oddlyenough, by Microsot, which eels thatpeople need something tangible in a digitalworld. And store ormats designed to enterdenser locations, such as Saeway’s urbanliestyle grocery in Washington D.C. FromeBay to Hermes, pop-up stores continue tobe avored as way to surprise and interruptconsumer expectations. All oer the chanceto put a new twist on brand so that peopleapproach it in a dierent context, andsee how it ts in their new ramework.Armed with endless touchpoint possibilities,how does a company choose? Three wordsretailers will be hearing more in the utureare “prioritize,” “optimize” and “orchestrate.Prioritize in regards to touchpoints,optimize in terms o ROI and orchestratethe elements o the brand experience—romagships to digital sales receipts.Hallmark, the specialty card and git retailer,oers products through its own storesas well as supermarkets, drugstores andmass merchants. Its tradition o innovationhas taken it into many digital territories,rom television to in-store kiosks, onlineoerings and greeting card sotware.With so many touchpoints, each with itsown potential or return, the challenge isto determine which o the many possibleactions the company should take to pleaseits customers, according to what priority.
Redefning Retail Brands inan Age o Frugality
It looks like consumer rugality is settlingin or a long stay. For most shoppers,the new thritiness is a cautious choicein the ace o an insecure uture. There ismoney to spend, but there is a new socialconsciousness around the idea o value. Valuehas less to do with price and more to do withintangible benets, such as time-saving,problem-solving, convenience, consistency,creativity and condence building.In such an atmosphere, retailers woulddo well to redene and reintroducethemselves. The key is a new and deeperunderstanding o brand and the customer.When it comes to brand, it is alwaysdifcult or businesses to get away romlogo-centric thinking and question thecompany components that may or may notresonate with consumers. But devotingtime to introspection could help nd thecrucial dierentiation, credibility and greaterrelevance needed to win. Once ound, theseelements can be introduced into the brandexperience, usually without the need or bigcapital-intensive physical transormations.For example, although the extreme valuecategory is seeing gains now, once therecovery takes hold, how will stores retainthe trial customers driven through theirdoors by the recession? Dollar General knewthat to go orward it needed to stand orsomething other than a cluttered, random,“cheapest” experience. By subjecting itsel to a peeling back process, Dollar Generalrevealed its original roots as an “honestand casual” brand. And ater listening to itscustomers, we helped the retailer discoverit needed to add a new dimension: resh.The subsequently rereshed brand isintroducing itsel through its almost8,500 stores, supported by a conservativebudget. The store plan is more shoppableand the brand benets are clear; theregular customers are reassured that theiravorite store didn’t change too radicallyand the new customers are encouragedby the experience. Even or the extremevalue category, it’s a ar better strategy toadd value than pound the price drum.It has always been difcult to createappropriate goods and services withoutshopper insight. Lack o it oten leads tobroadened assortments beyond a brand’slegitimacy. While stuck in the currenteconomic limbo, companies can use the timeto learn more about the new customer.Again, breaking down the big picturerequires a repeatable analytics-drivenapproach to brand impression managementin order to guide thinking about thedesign o every touchpoint, so that all arealigned and orchestrated according to abrand that’s been rereshed and redenedwith insights into shopper needs.The new rugality is not solely about price.Quality, price and reason will share topconsideration in the customer’s mind.For them, transactions will revolve moreand more around ideas, inormation andrelationships. As retail brands adapt to thisnew customer culture, they will redenetheir ideas, values and positioning tostay in the game. In an age o rugality,thrit—the wise use o resources—isa cherished cultural value. It can alsobecome a winning retail strategy.
A Retail Publication
Ideations
Issue 4 • 2009
 
Chairman’s Commentary
A Retail Publication by
7575 Paragon Road, Dayton, Ohio 45459
 
P
+1 937 439 4400
F
+1 937 439 4340
retail@designforum.comD. Lee Carpenter, Chairman & CEOJill Davis, EditorJeremy Mumpower, Design/Production
© 2009
Ideations
No living system is exempt rom deathby irrelevance.
Innovation
First o all, don’t look to Washington,Wall Street or the media or signs o aturnaround. That way lies madness.Too many o their metrics are backwards-looking and the media has beennearly hysterical. Enough already.The current economic climate has all theelements or a perect storm o innovation—the downall o trusted institutions, therise o social consciousness, an empoweredand wary consumer and a attened,transparent world. Something’s gotta give.Even so, it’s been a long time since I’ve seen acompany jump the curve and reinvent itsel into a new lie cycle. Granted, it’s alwaysdifcult or businesses to change theirinternal workings. Successul companiestend to be risk averse. But today’s shrunkenmarket means the stakes are low, the needto innovate is extremely high and manycompanies aren’t that successul anymore.Have you noticed that whenever you get intoa conversation about innovation-starvedcompanies, they always seem to come romour categories? Healthcare, commercialairlines, telecommunications companiesand automakers—all notorious or theirpain points and complex delivery systems.They seem to be in the business o dening reality or everyone. And theirmarketing appears to consist o making itas difcult as possible or their customerbase to leave. The only role or customerservice is to manage disappointment.In some cases, we want innovation so badly,we’re willing to let the government take acrack at it! But you can’t legislate innovation,as we’re seeing in the complex arena o healthcare. It will come rom outsiderthinking. Look how a retailer, like a CVS/pharmacy or a Walgreens or example, twoo the Most Valuable Retail Brands accordingto our 2009 report, can innovate aroundpeople’s need or aordable health care. CVS’sexpansion o MinuteClinics and Walgreen’spartnership with Take Care Health Systemsare brilliantly lling a market gap. Andsomeday they may even make money.When it comes to airlines, everyone isgetting black eyes, even the maverickslike JetBlue and Southwest. They’ll allhave to come up with something moreinnovative than inight WiFi. In the caseo telecommunications, anyone who’s evercursed out an interactive voice responsesystem knows why consumers hate ISPs,cable and phone service companies. Tryingto resolve dierences or part ways tends toplay out like a scene rom Fatal Attraction.As or U.S. car manuacturers, or whom Ihave a sot spot having worked with manyo them over the past thirty years, theyare having change orced upon them. OurInterbrand team was in Detroit recently,talking with automakers about a littlecreative deconstruction, the kind thatleads to innovation. It will take a newramework, language, tools and metricsto even begin to explore what they haveto oer to a post-crisis America.Quite a ew companies in these categorieshave lost their brand authority, sinceauthority is now granted by watchdogconsumers who only bestow it on companiesperceived as authentic and transparent.It’s tough to accept that today the averageconsumer is the one at the top o theood chain and that continuing to dobusiness as a Tyrannosaurus Rex is theway to become extinct. The big moneyis in customer happiness, which requiresgetting to know people in order to createthe brand experience they want.Take a look at the companies on the list o Interbrand’s Best Global Brands: Toyota,Apple, H&M. Or those on our own MostValuable U.S. Retail Brands ranking:J.C. Penney, J. Crew, Big Lots! These arecompanies we look at and think, “theyreally do things dierently.” We admirethem because they clearly deliver whatthey promise and that is the essenceo great brand building. Great brandssucceed because their cultures are uniquelydeveloped to meet the needs o theircustomers in a distinctive way. They aresalient and relevant. Such companies tend tobe the ones that do things that are unusual,ground-breaking and dey convention.Passionate entrepreneurialism at work.We all understand corporate inertia andresistance to change. As consultantswe deal with it daily. We’re called in todevelop new ideas, only to hear whythey can’t be implemented. But, comeon, even the Berlin Wall came down! Ican only assume innovation is gestatingsomewhere as I write this, in products,services, ideas or experiences. And thecompany that brings it will be a leader—until the next innovator jumps the curve.
For more inormation or to be placed on our mailing list, visit our website: www.interbranddesignorum.com andcomplete the contact orm. Reprints o articles or excerpts without the express written permission o Interbrand DesignForum is prohibited. Ideations will print 4 times in 2009. Subscriptions: $125 annually in the U.S.; $150 elsewhere.
Thoughtully,D. Lee Carpenter

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