The rise of the “retail brand”

The strongest retailers are using this challenging retail period to pull away from the pack by developing their brand further to build a strong, credible and popular “retail brand” and by taking steps to better understand the shopper and therefore improve shopper experience. Success in these two areas will increase footfall, basket size and profitability in the evolving retail marketplace.

In a changing economic climate, the strongest retailers will continue to drive profitable growth in new ways. They lead the investment and innovation in delighting shoppers in store, under a clear and compelling brand message. They are doing what the consumer-packaged-goods and fast-moving-consumer-goods industries did in the latter part of the last century, and they are doing it very well.

Four key drivers are being harnessed by retailers to achieve this.

Consolidation – fewer but larger retailers; fewer manufacturers with less brands and stock keeping units (SKUs) in store.

Point of difference – creating a unique product offering and experience for shoppers.

In-store theatre – wowing shoppers with interactive displays and point of sale, wooing them to part with their cash.

Productivity – spinning inventory faster and cutting unproductive hours without affecting the customer experience. Retail must remain “all about the shopper”.

The four areas are not ranked in importance as each retailer is at different stages of development. For example Wal-Mart leads the world in retail productivity, but has worked hard over the past five years to “un-clutter” its stores via brand and SKU consolidation, and has this year put significant investment into in-store theatre.

Consolidation and point of difference are often viewed as strong arm tactics being driven by retailers de-listing brands. However, it is more often the case that manufacturers are actively promoting exclusive opportunities.

In Australia and New Zealand, Bunnings is a great example of this point of difference advantage. Its Nippon Paints and Ryobi power tools ranges show the power of an exclusive range in building up a retailer’s brand and encouraging shopper loyalty.

It’s also a great example of manufacturers championing a strong retail brand in order to gain the best shopper experience from their products.

If consolidation and point of difference are the keys to the rising power of retail “brands”, then entertainment and shopper service are the factors that seal the deal to increase profitability.

With 80% of buying decisions made at the point of purchase, convincing the shopper in a store to actually part with their hard-earned cash is the next challenge – and where the innovation is required. Just as marketers look to online for interactive customer relationships, so too must stores. A shopper must be wooed.

In the week before Superbowl weekend in the US, Wal-Mart announced a huge new initiative to entertain its shoppers in store, creating in-store theatre over the key selling days, all day long, and under the Wal-Mart brand. New store fit outs, clearer single price point displays and un-cluttered aisles will make shopping at Wal-Mart not just a rational way to save money, but a great day’s experience too.

In Australia the same thing has begun to happen, with Woolworths re-branding and re-investing in their key grocery and liquor stores in Australia and New Zealand. Coles, Target and Officeworks too are now into the swing, with new format stores and re-investment in shopper experience the focus, rather than expansion of the store network.

Entertaining and engaging shoppers is vital as the world moves away from one-way messaging and towards interactive, relationship-building conversations.

Strong retailers worldwide are already well down the road towards the new retail model. Stores like JB Hi-Fi and Bunnings Warehouse emerging as leaders in their space alongside international retail brands like Costco, Tesco and Morrisons and Carrefour.

All in all it’ll make our trip to the store a longer and more enjoyable pastime.



In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.

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