In Australia the department store sector has surrendered almost one third of its market share since peaking in the mid 1980’s (Herald Sun November 8, 2011). They are between a rock and hard place, with online and specialty retailers earnestly chipping away at their customer base. For the financial year just past Myer suffered a 5.5% decline in sales and David Jones a 3.2% contraction. Interestingly during the same period many luxury brands reported growth, so it is not all being driven by the new cautionary consumer mindset so prevalent in Australia.

From David Jones we have heard very little about how new CEO Paul Zahra is going to tackle the problem. But in the other camp Myer’s chief executive Bernie Brookes is taking an approach that has some merit. Firstly, Myer is lifting its aspirations in the online space, seeking to generate as much as 10% of its sales revenue online. It has always been such a huge puzzle as to why Myer has been so slow to staking its claim in the online world. If you reflect on one of the advantages Myer has over specialty store online offers, it is its diverse array of brands and product. The fact that it has a wider choice is something they  need to leverage. Likewise they have a reputation for accepting product returns with an absolute minimum, a service dimension that they should duly transfer to any online transactions.

But it is Bernie Brooke’s stated approach to customer service that I think has real merit. He is suggesting that Myer will adopt a far more strategic mindset. Myer is going to concentrate on putting additional people in the high traffic areas of its stores eg women’s fashion, shoes, cosmetics – any place where individual attention is needed to convert customer interest into sales. Myer is in a superb position to know where it should place its additional customer service resources, as it over 5 million shoppers with a Myer store card in their hands, and therefore has the richest shopping behaviour data of any retailer in Australia. But it needs to be used intelligently.

Myer will only succeed if it can truly transform its customer service experience into a great one. Being selective about where those more magical personal experiences should play out, is an important enabling step. Myer is beginning move away from a one size fits all and is adopt a more agile and considered brand management approach. The proof will be in the Christmas pudding, but a big tick for intent.

Peter Singline
Brand Scientist

This year I had the pleasure of a 2 month sabbatical in Europe, with a combination of travelling and cocooning and reading a big pile of business and brand writing. One thing that struck me was that from a brand perspective the time of the socially responsible company has well and truly arrived. Corporate citizenship was a re-occurring theme across so many books that I explored. One telling factor was the weight of writing marketing guru Philip Kotler, in his new book Marketing 3.0, devoted to values driven business models. In the early 90’s I remember subjecting my MBA students to Kotler’s marketing text, which was brilliantly dense in subject matter pertaining to the 4 P’s, but lacking anything like the spiritual and noble essence of his current writings. It was an amazing awakening for me to witness such a shift in emphasis from a doyen of the marketing fraternity. It reaffirmed what one has been sensing is playing out in many market categories.

In his book, Kotler makes the point that……’a growing trend in society …consumers are now not only looking for products and services that satisfy their needs but also searching for experiences and businesses that touch their spiritual side. Supplying meaning is the future value proposition in marketing. The values-driven business model is the new killer app in Marketing 3.0’.

It is therefore not surprising that we are now seeing the advent of branding to reinforce the role of socially aware organisations, with the introduction of a new certification process. Certified B Corporations are corporations which use the power of business to solve social and environmental problems. B Corporations are the new black in corporate social responsibility branding. It provides a new landscape in brand management.

B Lab, a nonprofit organization, certifies B Corporations, the same way TransFair certifies Fair Trade coffee or USGBC certifies LEED buildings. B Lab promotes the fact that when you support a B Corporation, you’re supporting a better way to do business. Governments and nonprofits are necessary but insufficient to solve today’s most pressing problems. Business is the most powerful force on the planet and can be a positive instrument for change. There are over 450 Certified B Corporations across 60 different industries. Through a company’s public B Impact Report, anyone can access performance data about the social and environmental practices that stand behind the products being offered. Measures pertaining to employees, consumers, community, environment and accountability provide a well rounded assessment of each companies social footprint. It is clearly very early days, but the B Corporation strategy introduces a very positive process and branding device into the mix for communicating to the world the deeds of socially responsible companies. It represents an evolution of triple bottom line accounting, and one that has the potential to elevate the level of consciousness that companies and consumers have to such matters. But like all certification schemes it will live or die by the level of robustness and objectivity embedded in the process.

We wish the B Lab well!

Peter Singline
Brand Scientist

Surfing brand Billabong International is moving down stream into retail to better control how its products are sold. An increasing trend amongst the large retail chains is to increase the proportion of merchandise they sell under their own brands. Brands like Billabong can either cop it sweet and sit back and let their share of floor space and sales decline or they can take steps to control their own destiny. It is pleasing to see that Billabong has opted for the latter. Billabong is increasingly seeking to make retail acquisitions as a way of gaining greater control to their route to market. Last year they acquired the California based RVCA brand,  the West 49 retail chain in Canada, Surf Dive’n’ Ski  and Jetty Surf in Australia. Likewise Billabong is investing to build its online sales, which currently makes up 3% of their revenue.

Billabong is not alone in needing to re-think its strategic direction in terms of its consumer interface. For a long time brands have been sensitive of creating channel conflict and ever so respectful to the large retailers. But the respect is increasingly not being returned , brands need to seize the initiative back. Brand management needs to in fact be just that, brand management. Online represents the most obvious space to be managing more intensively. Why wouldn’t a big brand like Billabong not wish to offer the most compelling, engaging and intuitive online offering in its market category?

In terms of a retail footprint the investment required is significant, and for many manufacturing and wholesaling brands beyond their financial means or scale to create their own retail chain. For those retailers there is a need to be a little more creative. Why not seek to joint venture in a retail business? Seek out a number of complimentary brands and underwrite a shared dedicated retailing arm. Yes, it is difficult finding partners of the right size and same motivation, but they are there in many categories. When there is so much focus on co-creating with your customers, why not co-create with your peer band owners.

If your key major retailers are losing the spirit of collaboration and pursuing a more intense self interest position, reinvent your market interface, at the very least creatively explore the options.

Peter Singline
Brand Scientist

The day of just having beautifully attired mannequins is over. The digital world is opening up a whole new frontier for retailers. New and wonderful ways to engage customers and showcase products. The possibilities are immensely exciting, but the resource requirements challenging. The digital world is a two edged sword. A window to an imaginative and captivating domain, but equally leaving you looking like yesterday’s brand if you do not creatively unlock the magic of what is available.

One fashion retailer that is stepping up to the mark is Gucci. It is encouraging consumer interaction in its retail stores with the launch of a new immersive experience using groundbreaking technologies developed by experience design company OOOii. Unveiled at its newly-renovated Milan via Montenapoleone flagship recently, the initiative includes 50 LCD video wall displays from Planar Systems tiled throughout the store that from 2012 will enable natural human-computer interaction.

The immersive display installation at the flagship includes almost fifty 45″ and 50″ Clarity Matrix LCD video wall displays from Planar Systems, tiled throughout the store. These ultra-thin, energy efficient, near-seamless LCD displays, together with OOOii’s graphics engine create life-size interactive images – forming one of the most technologically-advanced retail environments in the world.

For the first phase, three “zones“ have been developed: the Immersive Window Display, the Immersive Entrance Display and the Immersive Women’s and Men’s Fashion Show Displays. Each zone showcasing a range of specially curated digital content. The highlight being the Immersive Women’s Fashion Show Display, where customers will experience Frida Giannini’s Autumn Winter 2012 Milan women’s fashion show as though it was happening right in front of them, thanks to 5k resolution film shot by a team from Hollywood on one of the world’s few RED Epic cameras.

Pause, rewind and search for specific content by making simple hand gestures in front of the displays. Then, if a customer likes a certain product they will be able to receive an image on their mobile device allowing them to consult with friends and later send a notification to their usual sales assistant in order for an item to be reserved.

Not for one minute do I pretend to have any understanding of the technology driving this immersive and dynamic customer experience. But I do understand that the face of retailing is changing, that retailers need to start making conscious decisions about how they are going to use digital technology to inspire deeper customer connection. The Gucci initiative is also a greater reminder of whether it be virtual or real, shoppers are going to more and more expect to be entertained and thrilled in their shopping excursions – simply because that is what the best retailers will be offering. If you are a retailer, without the deep pockets to fund a Gucci type brand gesture, then you must look for other creative ways to engage. Make it personal, make it intimate, make it real, make it funny, make it outlandish, make irreverent, make it a social cause ……make it something! In the words of legendary Australian Rules Football coach John Kennedy ‘……don’t think, do something!’. Well almost, think first always! What is the most effective way you can evolve your retail experience to touch the lives of your customers in a more meaningful and inspiring way. But after the thinking, if you don’t act, you will be yesterday’s player.

Peter Singline
Brand Scientist

The world of retailing is changing and the bricks & mortar ‘only’ strategy is truly under threat. What is required from retailers is a new paradigm based on integrated retailing. That is where physical shops are simply part of the offer to customers – a new mental model that actively pursues online as well as off-line sales environments. An approach that seeks to use technology to enhance shopper experiences, that gives consumers the choice as to where and how they research and consummate their purchases.

Online shopping in Australia is expected to expand its share of the retail market from 2 to 3 percent to 7 to 8 percent – closer to the threshold it already occupies in the U.S. and the U.K. Retailers can either choose to pursue this channel or witness a stagnation or decline in their sales.

But the new paradigm that is needed, extends beyond the simple on or off-line formats debate, to one that integrates technology into the full retail experience. Retailers need to ask themselves, how are they using technology to make pre-purchase research informative and easy. How are they using technology to identify and reward loyal customers, flag special offers, navigate store environments, check product availability, and dare I say it pricing. How are they using technology in-store to engage, inform and delight their customers. How are they using technology to empower their staff to serve their customers better.

Additionally in an integrated retail world, how are retailers with an extensive store footprint converting that to an advantage. How are they leveraging such comprehensive geographic coverage, to better serve their customers, even if they have purchased from them on line.

Finally, in terms of bricks & mortar, we believe the value of flagship stores that truly wow is going to grow. If the economics of delivering experiential mastery to customers at every store is prohibitive, then some real magic must play out at least in fewer well positioned flagship store environments.

Integrated retail is the name of the game – try playing it.

If you’d like some strategic coaching on playing the retail game to win, give us a call

Peter Singline
Brand Scientist

Over the past couple of years we have been witnessing the demise of the Qantas brand, with its business strategy dictating the brand’s terms of engagement. Every public gesture that the business has made, has reflected an unwavering commitment to taking cost out of its operations. There has been scant regard for the brand or the customer.

The Qantas world has been one of automating, offshoring and outsourcing. And when it suited them straight our brand transferring by substituting Qantas routes with their low cost operator, Jetstar. This has manifested itself in a recent downsizing of Australian employees by 1,000, a new international carrier brand being established in Asia and then this week a win over the union as a result of Fair Work Australia approving the employment of lower paid pilots through Qantas overseas subsidiary Jetconnect.

To counter the potential fall out of all this, Qantas has also been running a campaign in the media to spin a yarn along line of ‘the spirit of Australia, getting into fighting condition to take on the world.’ Unfortunately, for many customers, its focus for so long has been about the business and not brand relationships. Worse it seems that with the on going pursuit of cost cutting it is also cutting the guts out of the culture of Qantas. When you are positioned as the ‘Spirit of Australia’ you need an organisation with people who feel passionate and dare I say ‘spirited’ about the brand. Certainly having a fully engaged Australian pilot at the front of the plane, was a good starting point – perhaps now a brand attribute of the past.

From a branding perspective the move by brands to increasingly automate customer contacts is also an interesting one. Qantas desire to essentially have no personal contact with passengers until they board their flight has some obvious advantages. It shifts steps of the  value chain directly to the customer and thereby reduces costs. Some customers enjoy being directly in control and in many instances it removes queuing for them. But it also means that the brand is walking away from an opportunity to engage passengers at a personal level. The experience simply becomes a transaction (albeit efficient) and not as relationship charged as a face to face exchange has the potential of delivering.

The lesson for all service brands is that if you keep taking out steps that have some form of personal engagement, you lower the emotional connection that customers have with the brand.  Brand’s need to continue to consciously ask themselves, how are they fueling an emotional and more personal relationship with customers? What are they doing to substitute for automation steps that make them more remote? The more you make it like a functional transaction the easier you make it for customers to leave, if a competitor does it better functionally.

Qantas as a brand has always drawn heavily on emotional cues – unfortunately these are fast being eroded.

Peter Singline
Brand Scientist

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Fashion retailers in Australia are simply devaluing their brands with a seemingly unrelenting reliance on price discounting. In Melbourne we have not yet officially hit winter but many of our fashion retailers are hitting the ‘sale’ panic button. In the past week I have had the pleasure of purchasing jeans and pullover from Saba at a 30% discount. This discount was not simply available on those two items, it was available on all menswear items. The interesting thing is that I went to store specifically to get the items, not knowing the sale was on. I am a loyal customer, the very thing that brand equity is based on.  They traded off 30% in gross profit margin and did nothing to make me think that I had specifically been rewarded for my loyalty – as it was a discount available to all.

And they are not alone. Country Road are offering a mere 25% off everything today and tomorrow.

While it may serve to feed the sales pipeline it unfortunately also reinforces the diminished value equation so many fashion brand retailers currently represent. Most fashion shoppers feel rather reluctant to purchase any item at the full recommended retail price. Why would you when if you wait a few weeks into a new season you can step up to a 25-30% discount. The re-occurring cycle of across the board discounts communicates only that the retailers in question are operating with inflated margins or absolutely wacko business models. What ever the driver it simply serves to inform the consumer that the brand only represents value with a hefty discount.

There has to be a better model. This is particularly the case for fashion brands who operate their own retail outlets and hence get to control their distribution and destiny. At the very least, let’s call a halt to across the board discounts. The challenge is to find a solution that works for the business and the brand. New fashion entrant to Australia,  Zara, at least moves to the beat of its own drum. With small volumes of inventory and rapid changes in fashion items/styles (every 6-8 weeks) they create an inherent urgency in customers to act – or miss out. Attractive pricing always, combined with average quality products adds up to great value for those who simply wish to have on- trend fashion pieces for the current season (not for a life-time or the moths).

It truly is time for some fresh thinking.

Peter Singline
Brand Scientist

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There is nothing like the mother of necessity to inspire creativity. Cigarette brand owners are amongst the most creative brand owners on this planet because they have to be. They will never roll over and die (like many of their customers!), they will simply fight each new hurdle imposed by Government legislation, because their very existence depends on them finding new and novel ways to retain their appeal.

In Australia they have slowly but surely had every possible medium for communicating their presence stripped away from them. When they lost the right to advertise in the main media, they simply shifted their focus to sport sponsorship. They then lost sport sponsorship and one felt almost the opportunity for product placement in movies….and then along came the mini-series Mad Men. What an amazing reminder that some social norms have had a huge shift over the past 4-5 decades.

Today in Australia we are about to see the introduction of plain cigarette packaging. No brand logo. No brand colours. No brand specific typefaces. The same plain pack for every cigarette brand, a simple brand name adorned with a graphic example of the health joys in-store for the regular smoker. A pack that is meant to not only remind the smoker of the perils of their habit, but also to make the pack look as socially unappealing as possible. An attempt to snuff out one of the last remaining brand building properties owned by the cigarette companies.

Unfortunately, what it is likely to do is drive them down the creative pathway once again. Surely, they will simply re-invent the ‘old’ cigarette case. Gift them to their loyal smokers. They will do everything possible to ensure that their customers get to look as cool as possible with the container that houses their little cancer sticks! Hence it is back to the future, but this time with cigarette branded cases. It will simply result in customers buying their preferred cigarette brand and then transferring the cigarettes from the plain packaging (with infected lungs or throat screaming at everyone!) into their swanky branded case, or even one with a tongue in cheek statement of how the customer views smoking.

The cigarette brands are masters at reinventing how they communicate their offer to the market, because they have to. Why not try imagining that the primary way that you market yourself to your target market has been removed from your arsenal – what would be your creative response. You may find a very potent alternative to your current paradigm.

Peter Singline
Brand Scientist

I read with interest an article in The Australian newspaper this week (22 March 2011) which featured the ‘Sportsgirl Likes’ collections. In Australia, Sportsgirl as a younger woman’s fashion brand, occupies an enduring and esteemed positioning, the result of not sitting on its laurels. The Sportsgirl Likes collections is testimony of the brand’s capacity to look to the future. The collections provide Sportsgirl with a potent vehicle for fostering young design talent, and the same time injecting interest and currency into their brand.

Genevieve Kulesza

The inspiration starts with the Sportsgirl sponsored National Graduate Showcase that is part of Melbourne’s Fashion Festival. The sponsored showcase celebrates the creative talents of young designers and importantly provides an opportunity for Sportsgirl to observe first hand designers that have the potential to shape the next wave of fashion. However, Sportsgirl is anything but a passive observer in this event, it is actively screening the talent on show to select two or three designers that they would like to collaborate with to create a collection to be marketed under the Sportsgirl Likes range. The collaboration is a rich experience for the young designers selected as they get access to almost every resource available within the Sportsgirl organisation, with no creative restrictions placed on the products they design for the business. They get to strut their stuff with huge support, but in a context that has commercial realities attached to it. The designers have the creative license to create a collection that will be relevant and accessible to the Sportsgirl target market. It is a test in realism as well as well as design, as the product needs to sell through.

Naomi Milgrom, owner and Group Chairwoman of the the Sussan Group which owns Sportsgirl, positions the program as a simply a demonstrative commitment to foster young Australian design talent. It is not assessed on a financial basis, rather as giving young designers with first hand experience in balancing design and creativity against the commercial needs of business. It’s stated purpose while being noble to the last thread, is also a superbly intelligent brand gesture. Too often the community minded programs pursued by brands are unrelated to the positioning of the brands that sponsor them. Our view is that there are enough ‘causes’ in the world to ensure that the one’s championed are relevant to the brand. For Sportsgirl, design is fundamental to the brand and thus the Sportsgirl Likes program is a superb way to generously support young up and coming designers, at the same time generously inject something fresh and vibrant into the brand’s offering. It is an intelligent brand gesture that sits comfortably with a market leadership position.

If the fashion collections that result are not your look, perhaps your focus should be on driving out community inspired brand gestures that have a hand in glove fit with your own brand. Why not?

Peter Singline
Brand Scientist
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In recent months, the larger supermarket chains have found themselves embroiled in controversy as a result of their price wars and less than market friendly tactics.  As Peter Singline mentioned in his recent blog, the plight of smaller brand owners, in particular the smaller milk producers, has been brought to the country’s attention causing widespread consumer outrage.

Despite the recent market pressure, Woolworths has once again found itself in the spotlight, with Organic Marketing Australia launching a case in the Sydney Federal Court this week.  The family-owned business trades as ‘Honest to Goodness’ and is alleging that Woolworths latest advertising campaign, featuring Margaret Fulton, infringes on its intellectual property.

The David vs Goliath battle, is set to cost Honest to Goodness owner, Matt Ward, hundreds of thousands of dollars in legal fees and years enslaved in legal battle.   The battle centers around the trademarked ‘Honest to Goodness’ phrase, which Mr. Ward argues can not be used by any other retailer or wholesaler of health foods.  Woolworths is countering the allegations on the grounds that Honest to Goodness is not a unique element but a common phrase that can be used freely.

At the heart of the allegations is one question; is Woolworths using the phrase as an integral part of their branding, or simply using the phrase in a descriptive sense?  Based on the campaign’s own branding, it would appear that Mr. Ward may have a strong case in his favour.

It is also worth noting that although Aldi have also been advertising ‘Honest to Goodness Savings’ in relation to their cheaper value proposition, they seem to have missed the media glare to date.  They might just find themselves attracting unwanted attention in the weeks to come.

Click here to view the embedded video.

The Honest to Goodness brand is a perfect example of how important it is to not only have a unique and engaging brand identity, but an identity you can own and preserve in the market.  It is not enough to create a brand based on visually stimulating imagery alone, if it is not unique and able to be protected by law.

If you would like to know more about creating your own unique (and ownable) brand identity, why not give us a call?

Nikki Williams
Client Account Manager
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