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Those brands that have fared well have managed to evolve but have not lost sight of what they are in essence; they have stayed true to their brand foundations. We’ve seen luxury house brands such as Gucci, Prada, and Balenciaga manage this well. Last year, Gucci nearly doubled their sales in 2018, with consumers under 35 accounting for 55 per cent of those sales.
A key enabler to their success was seeking to understand and involve consumers in the development process. Gucci engaged a committee of global Gen Z and Millennials with tech experts to uncover ideas and approaches for the brand that were relevant and progressive.
But not everyone is this successful. It’s easy for a brand’s DNA, especially a legacy brand’s, to get lost as it evolves.
The DTC distraction
The battle for attention has become relentless. The e-commerce boom, frequent discounting, and the increase in digital pureplay brands has triggered new category competitors, along with a continuous expansion of ‘insta-brands’ that have a seemingly single-minded approach.
Diffusion’s 2020 Direct-to-Consumer Purchase Intent Index shows 81 per cent of consumers will make at least one DTC purchase over the next five years, with 77 per cent of apparel and accessory companies now DTC.
This distraction has caused a reactionary panic among brands about ‘keeping up’ and, in turn, created conflicting messages not grounded in existing brand attributes. The pressure will continue. As The Drum reported, the DTC market is projected to grow by 19.2 per cent in 2021 alone.
Transition to a digital-first species
The way we consume has changed out of necessity and at an incredible rate. The next generation of digital natives expects retailers to react faster than we know how. McKinsey has found that Gen Z, Millennials and high-income consumers are ahead of the curve: 34 per cent of people say they have shopped on Instagram based on an influencer’s recommendation.
New data from IBM’s U.S. Retail Index shows the pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years. The forced digital adoption in early 2020 is now becoming a way of life for consumers, who continue to increase the gap between their amount of online shopping and how much they shop at bricks-and-mortar locations. The familiarity and ease of online is now driving deeper behaviour, reliance and affinity.
Risk of losing the core
These trends have created a constant battle: fighting to reach new audiences without alienating the core. Companies are pivoting in their branding, comms, and product innovation to appeal to younger audiences but this can move them away from the brand’s existing attributes and values, which can alienate core customer segments.
An example of this was Calvin Klein’s Bella Hadid x Lil Miquela campaign in 2019, where the supermodel was shown making out with a female computer-generated influencer. In its attempt to appear relevant and supportive of the LGBTQIA+ community, the campaign came across as tone deaf, resulting in consumer backlash. CK lost touch with its core brand values and failed to resonate with either audience.
What are the right moves for brands fighting to remain relevant? Here are some tips:
1. Audit your brand
Start from the inside out. Take a step back and look to identify roadblocks that are stopping your brand from growing or moving forward. Talk to your people, unearth the true brand benefits, attributes, and insights from those who are creating and selling your products, and those who are behind the scenes. And keep an open mind. They have rich perspectives, first-hand learnings, and insights that are invaluable.
2. Get into the minds of new audiences
Invest in learning more about your opportunity audiences and seek to understand them. Break free from the youth trend reports, get out and talk to the people you’re trying to sell your products. Uncover why your brand doesn’t resonate with them. Understand latent perceptions amongst non-loyalists. Identify opportunities and barriers to overcome. But don’t stop there, you also need to show and prove that you’ve listened through your actions over a sustained period. A report from Forrester found that 83 per cent of consumers admit to paying as much attention to how brands treat them as they do to the products they sell.
Use the next 12 months to keep talking to people and testing your approach with your new audiences.
3. Adapt and look forward
Use these new insights to build on your existing brand essence. Assess what still resonates and what needs reinventing. Determine where your brand’s stated values and actual experience are aligned – and where they’re not – to establish what you should focus on and take forward.
For retail brands, it’s particularly important to plan ahead as they grapple with increasing disruptive forces and future trends. Increasingly climate-conscious shoppers, the onslaught of innovative DTC brands, growing demand for purpose-led initiatives, an ever-expanding network of shopping platforms, among other trends, highlight the need for brands look forward. Identify what’s missing in your current brand architecture, consumer experience, and communications. Discover precisely where you need to invest in the coming 12 months and stay ahead of the game.
4. Stop telling, start doing
Consumers don’t just want to be told what is going to be different. You need to show people what you are doing to make a difference. You will need to commit to and invest in doing better, then you can start talking and acting on it.
5. Close the loop with your people
Take them on the full journey and ensure they feel heard and remain invested. There’s power in your people if you’re all on the same page and heading towards the same vision. Having complete buy-in on your brand’s values and essence because they are born from the insights, benefits, and opportunities your people present will give you a competitive advantage.
In the last 18 months, some brands have been forced into short-term wins with no long-term plan in the face of uncertainty. This can get you only so far. Brands need to come out of the gates with a strong point of view once retail is back open. With people craving more experiences, contact, and connection than ever, there will be an even greater need to stand out from the clutter. Consumers will be looking for a clear, safe, trusted voice. These traits are innate aspects of iconic, legacy brands; if they can keep these characteristics while reimagining and modernising their approach, they’ll have superpowers in our new reality.
This article was originally published in the November issue of Inside Retail Australia’s magazine.