‘Fresh ideas’ needed for success in retail

Some of the biggest names in UK retail have warned the sector’s marketers to prioritise personalisation, localisation and building trust to succeed in the “new era of retail”.

johnnie walker
Andrew Morgan, European president of Johnnie Walker owner Diageo said localisation is key to brand success.

Speaking at the IGD Convention 2012 in London this week, Tesco CEO Philip Clarke told delegates the industry must think beyond offering the “basics” of value, convenience, choice and quality and “rethink” their overall approach to retail with “creative fresh ideas about what we sell and how we sell it”.

He added: “Retail is about people selling things to other people so as we enter this new era of retailing, we need to create a personalised offer that anticipates how our customers’ needs are changing. It’s pretty obvious why – smartphones. Digital technology has given brands the opportunity to forge a personal relationship with every customer.”

Joanne Denney-Finch, CEO of retail insight firm and event hosts IGD, said retailers and brands must adapt to the “rules of tomorrow” by rejecting a mass market approach.

She added: “According to yesterday’s rule, big companies win in mass markets, by supplying the same products to a wide audience and getting it right for most people, most of the time. But now, with much more choice, mass markets are breaking down.

“This journey from mass markets to personalisation is sure to continue. We used to assume that the big keep getting bigger but it’s the big companies that have most to lose if they don’t adapt.”

She cited Coca-Cola’s Freestyle vending machines that encourage consumers to create their own drinks as an example of a brand putting the consumer at the centre of product development.”

Localisation, in terms of product and brand communications, is another important shift in what consumers expect from brands and retailers. Consumers are demanding more local products in stores and ranges tailored to the local demographic, speakers said.

Diageo Europe president Andrew Morgan, said the success of its Johnnie Walker whisky brand lies in tailoring its message to local markets. It has made its global ‘Keep Walking’ message resonate in markets such a Thailand, Brazil and Greece by tapping in to issues that are important in each market such as the economy or the influx of tourism.

In doing so, the brand has been able to increase its brand loyalty and build trust, which is key to growth, he said.

He adds: “Brand loyalty is a form of trust and trustworthy brands are more successful. [The lack of trust in business and institutions] represents an opportunity for clever and resourceful brand owners because consumers need to trust something and brands can fill that vacuum.”

Sainsbury’s CEO Justin King agreed that gaining consumers’ trust should be a priority for any retailer or brand. He added despite the pressure on household budgets, price is not the way to achieve it as it doesn’t appear in.

He said: “I believe that while barometers show a trust is relatively low, there is good reason for consumers to trust us and opportunities for us to build that trust. Price doesn’t feature in the demands for trust. We’re less trusted on price as an industry now than for a long time.”



Brand messages lost in promo clutter

Rosie Baker

Despite the high volume of price focused messaging and the relentless rhetoric about squeezed household budgets, the supermarket sector has reached the point where price has become irrelevant. The sector is so competitive on price that it has become a hygiene factor not a point of difference.


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