An IPO gold rush is coming for retailers, but first there must be a marketing rush
What a difference 12 months makes. This time last year the headlines were all about the wave of bankruptcies hitting retailers, with HMV, Jessops and Blockbuster all going into administration. Fast forward to now and instead it is IPOs that everyone is talking about.
Just this week Poundland and Pets At Home announced their intention to float, following convenience store chain McColls onto the stock exchange. At least 10 more are in the pipeline for this year, including Fat Face, Game Group, House of Fraser, Card Factory and B&M.
The about-turn shows that confidence is returning to the British high street, said by some to be in terminal decline due to digital disruption. It also reflects growing investor appetite for consumer stocks as the economy recovery in the UK continues.
However, going public is not an easy route to money. It is key that companies know their strengths and values and make sure customers and investors know them too. The obvious way to do that is through marketing.
Strong brands with a clear business message that can explain their differentiator and why they will succeed perform best on the public markets. It’s all well and good outlining that in IPO documents, but only traditional investors are ever likely to look at them.
Perception in the wider market and among the general public is even more important. Now is the time for retailers to flex their marketing muscle.
It is strange, therefore, that of the three companies to file so far this year it is only Pets At Home that even mentions marketing in its floating plans. It will “increase marketing” and boost its loyalty scheme, developing its VIP Club to offer more personalised deals to customers.
However, when asked by Marketing Week, Poundland said it “wouldn’t be talking about that now”. It’s a similar story over at McColls.
That is a mistake. McColls is planning some big changes to its business as it heads to the public markets, looking to move away from its roots as a newsagent and transform its stores to “higher quality convenience stores”.
It has a strong brand, but most people see it as a place to pop in and grab a paper, not a place to pick up that evening’s dinner on the way home from work. Changing that perception without using marketing will be difficult, if not impossible.
Poundland similarly has promised big expansion once it goes public, with plans to double store numbers and invest in online.
All the retailers planning to go public face some significant challenges, whether from online rivals, bigger players encroaching on their market or worries over consumer shopping trends.
Just because Poundland and McColls don’t mention marketing doesn’t mean they don’t intend to up spend. In fact they might well do. The problem is that in many areas marketing is still seen as an expense, which they’ll be keen to avoid pointing out.
But they should be shouting from the rooftops that that is their plan. Good marketing, after all, is a revenue generator.
There is no better way to increase brand strength and build a profile in the business sector. It also generates interest, assuring investors they are backing a certain winner.
All companies that are preparing to go public should be investing in their brand and, by extension, their marketing. Those that underestimate the impact it can have do so at their peril.
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