After years of brand globalisation, being local has now become more important to consumers than ever before. The recession of the last 18 months has left people wanting to feel part of something physical, tangible and local. Individuals want to feel connected to where they live and take part in local events, according to research by co-creation research agency Promise (see Community-led Trends in 2010 box below).
But while brands may talk about becoming part of the local area, it is notoriously difficult for large high-street retailers and brands to form genuine links on a community level. Marketers are attempting to get closer to their customers by tapping into this trend.
Luxury boutique hotel Andaz is using community-led marketing in a bid to offer its guests a more authentic localised experience (see below). Meanwhile, Debenhams and Domino’s are using location-based tools to give their big brand names relevance to consumers.
Konstantin Pinaev, senior consultant at Promise, says: “People want to feel part of something because it’s about safety and security. This is a natural reaction to the credit crunch.”
The desire to be part of a community is a counter-trend to globalisation, he suggests. And retailers and brands will have to become more local in their outlook if they are to build closer relationships with consumers. This is being aided by new technology, which has the potential to help brands find a genuine role in their community. The speed with which the mobile internet has developed is allowing real-time engagement, which can be used to a brand’s advantage in local areas.
One location-based tool, being used by both Debenhams and Domino’s, is Foursquare. The web service allows users to “check-in” to locations and earn reward points for their loyalty based on their use of local businesses.
This type of initiative can benefit large chains and independent stores alike, argues Jon Buckley, head of digital at advertising agency Archibald Ingall Stretton. He says: “It has got great potential to become a quick and very local loyalty scheme.”
Those visiting Debenhams can check in on the Foursquare service and claim a free coffee once a week. And customers who check in the most times can become “mayor” of a particular store and claim unlimited free coffee. Similarly, Domino’s is offering a free pizza every week to any mayor of its stores.
Foursquare co-founder and chief executive Dennis Crawley says the point of the service is “to encourage people [to] explore the cities in which they live”.
Buckley says chains and big brands that want to get involved with this service “need to have a united face”, giving customers a consistent loyalty scheme across the country. He believes that location-based technologies enable a more egalitarian form of marketing. This should create opportunities for local retailers and small brands to tap into a “ready-made loyalty scheme since they can access the existing infrastructure”.
Community website BuyGB is also using location-based technology to connect rural villages in the UK. It is building an online farmers’ market where people can buy local produce and crafts from suppliers in their area. It will track users by location and direct members to their nearest producers. Eventually, offers based on where people live will be emailed to them (see Viewpoint, below).
But others in the marketing industry doubt whether tracking tools will engender a feeling of closeness between consumers and brands. It could make consumers feel like they’re being stalked, warns Magnus Willis, founding partner at brand consultancy Sparkler. “There are civil liberty issues here with GPS and Bluetooth applications. People feel uneasy about being tracked and tapped into. Brands should really think about if they could genuinely work in this space as it takes a lot of thought and investment to commit to a location-based strategy.”
“People want to feel part of something because it’s about safety and security. This is a natural reaction to the credit crunch”
Konstantin Pinaev, Promise
One way to avoid appearing too “Big Brother” while staying engaged with the local community is to avoid location-based services and instead customise marketing and services for specific regions. Mat Hart, group marketing director at Nuffield Health, says that being decentralised is the secret to relevant community marketing.
Not only does Nuffield take a localised approach in its hospitals, he says, but it is attempting to become more locally relevant with its health club marketing. In some areas, general managers can make their own decisions about promotions and incentives to ensure that they are relevant to the location and demographic of that particular gym.
It’s important to consider the community where you operate instead of simply producing a one-size-fits-all strategy that has to be implemented across all clubs, Hart says.
“The demographic and the competition from other gyms can vary greatly from region to region,” he reports. “A health club in London has a typically younger member than in some of the regional fitness centres.
“We have a brand differentials programme where members will be able to ‘meet the experts’ and ask them advice. A slightly older demographic responds to this, whereas younger people are more interested in a rewards programme that the health clubs offer,” he explains. “Instead of asking general managers to roll out the same marketing across the regions, they can decide what’s appropriate for them.”
“People no longer congregate in the community hall or local church, so brands have an opportunity here to fill that void”
Magnus Willis, Sparkler
Tesco is taking a different tack in its attempts to appear part of local communities by emphasising its regional sourcing. Although the brand is now global, the company is keen to promote its links to specific regional areas.
It has been running an “Enjoy the Taste of…” campaign in-store to tell customers about products in its stores that are sourced from the surrounding area. Point-of-sale material highlights this message and shelf signage provides extra information.
Demand for local produce is rising fast, claims Jo Wren, Tesco’s regional marketing manager. She says there has been a 25% increase in purchasing local products since last year.
“It’s a good way of telling stories to consumers in the region. When people come into the stores, some personally know the suppliers that they’re talking about,” she says. “When people walk into a Tesco store, they should immediately be able to tell they are in Essex, for example, because they will see point-of-sale displays telling them about produce available from that region.”
Other retail chains are also trying to become part of the community through the power of local sourcing. The Budgens supermarket chain has long integrated itself into local communities.
“The Budgens approach is genius. It’s a way of providing for the community and saying ‘we’re here for you’,” says Willis at Sparkle. Budgens sources much of its local produce directly from the high street on which it operates. One Budgens branch in London sells bread from Dunn’s Bakery, which is located on the opposite side of the road to the Crouch End store.
This type of community-led sourcing is what will create loyalty with shoppers in the local area, Promise’s Pinaev suggests.
Even global chains such as Starbucks and McDonald’s have been trying to be more local by customising their décor to be more attuned to the surrounding area. However, Pinaev argues: “You can put a local layer on, but you’re still a global brand.” Like Tesco, Starbucks and McDonald’s must keep a consistent brand look while also bringing in local elements.
McDonald’s has been trying to get right at the heart of the community by getting involved at grassroots level with The Football Association. More than half of the restaurants are twinned with a local football club, providing equipment and mentoring. It also works with Tidy Britain groups to co-ordinate litter controls in the areas in which they operate.
Tesco is also playing the football game with its FA skills programme. Tesco retail and logistics director David Potts says that the training scheme is a great way of getting to the heart of the community. Potts says a television advert in the run-up to the World Cup will “help to promote the scheme to a wider audience”. He wants more people to sign up to the community-led scheme as well as watching the global tournament on their TVs.
While no brand should try and force an unconvincing relationship with a local community, companies do need to think carefully about how they can build stronger relationships with people on a local level. With the effects of the recession seemingly easing, companies will need to woo new customers who may want something more tangible from their brands.
Sparkler’s Willis says that the smartest companies will see the potential in localised services and marketing this year. He explains: “People no longer congregate in the community hall or local church, so brands have an opportunity here to fill that void.”
Andaz: Creating a community feeling
Connecting the Hyatt Hotels and Resorts-owned Andaz brand to the east London community in which the boutique hotel is located is essential for business success, argues Andaz sales and marketing director Alvaro Bonavita.
“The Andaz concept is about being authentic to the area. We’re different because we embrace the local community,” he argues, adding that this is what sets the five-star hotel apart from its rivals.
Hyatt launched the Andaz brand in 2007, with its hotel in Liverpool Street the first to open. The corporation felt there was a gap in the market for high-end luxury combined with a smaller design-driven concept. But to create the feeling of a boutique hotel, you have to go beyond the standards of a global chain, Bonavita argues.
Embedding the hotel in the local community allows it to create a “more authentic feel” for its guests, argues hotel general manager Arnaud de Saint-Exupery. “Our guests want a personal touch. And weekend clients who are well-versed with London’s West End scene want to experience something less touristy than chain hotel guests.”
The Andaz street art tour aims to help guests experience the area of London around Liverpool Street that has become synonymous with world-famous graffiti artists such as Banksy. Andaz Liverpool Street has also formed a partnership with the local Whitechapel Gallery, with some of the exhibits appearing in the hotel’s lounge to help promote nearby attractions.
De Saint-Exupery is also looking to bring the hotel events programme to life in a more local way. It is working with musicians from the surrounding area to create unique playlists on its iPods, which are offered for guests to use.
He adds that all of the restaurants and bars have obvious street entrances, which aim to encourage east Londoners to spend time in the hotel to help create “a local atmosphere”.
Events for the local community run during the year, including a recent open day where the public were given tours of the hotel.
There are five Andaz hotels open around the world, with plans for further expansion over the next few years. Although the hotel in London will become part of a growing chain over time, its decentralised approach to marketing allows the team to continue to integrate with the surrounding community.
De Saint-Exupery adds: “To ensure that Andaz offers its guests a homely feel in luxurious surroundings, the brand will continue its strategy of embedding itself in the local community.”
Alex Froom, co-founder of BuyGB, a not-for-profit sales and marketing website for businesses in rural communities
A lot of farm shops and smaller communities are trying to make themselves known to consumers, but with lower budgets and less expertise, there has been a lot of fragmented activity.
This makes it difficult for people to source local producers with just a Google search, so we decided to build a location-based network, which we think will benefit individual users and producers. The marketing is always going to be localised because when members log on to BuyGB, they can only see the producers available in their area.
Producers with delivery capabilities can sell their wares through the website. There is also a social networking side to the site that allows members to communicate with each other on both local and national levels. They can find out about local events in the area, which will help to bring communities together.
Any producer can sign up and will pay a monthly fee. We can feed their news through the site and create relevant vouchers.
However, we want the public to get involved in encouraging their local producers to sign up, so there is an offline affiliate campaign. If a member of public signs up to the site, they can download a voucher which can be printed off. They can then walk into any local farm, food or craft shop and give the shop owner this voucher which allows them to sign up to our service for free. By tracking the unique referring code, we can then offer the consumer commission on any transaction the producer makes on the site.
We also want to work with other membership and charitable organisations such as Scout and Guide groups or schools. There is an area on the site for these groups to promote themselves with event news that we can communicate to our social network community. If these groups are registered as charitable organisations, then we can even give them commission rates for getting producers to sign up.
To support the marketing, we have a geo-locationary system that allows us to index every village and hamlet. This allows us to customise emails on a unique user level. Eventually, we’ll be carrying some targeted localised ads.
We have to make sure we are offering people great content. And with the social networking, we’ll find out what people like and don’t like. It’s about giving smaller producers a voice and helping people living in rural communities get access to information and produce within their local area.
Community-led trends in 2010
“I want to feel closer”
The recession has resulted in people reconsidering their values. Consumers are placing more value on real things, such as local communities, friends and family, rather than virtual acquaintances.
As people have a desire to connect more with their local area, brands will use geo-tagging, mobile internet and augmented reality campaigns to allow people access to opportunities and offers in their area. There will also be more demands on retailers to stock local produce rather than global products.
Brands will try harder to create relationships with consumers by using a more proactive, personalised approach. But consumers will also become better at spotting the difference between real and fake brand relationships.
“Hobbies are back”
The recession has led to people wanting more community involvement. There is a desire to reconnect with the community after years of “going global”.
The amount of exposure to personal technology has created a dichotomy: it has increased an appetite for people to search out new experiences but also makes them miss basic human interactions.
Hobbies or “social DIY” are predicted to grow as a response to the desire to spend time with people while learning new skills. This trend refers to communities forming around both online and offline interests.
Brands that can help facilitate hobbies or help forge communities are predicted to benefit from this trend.
“Speed, simplicity and shortcuts”
Information overload and busy lives mean that consumers want quick and easy solutions. Localised mobile solutions will help consumers make more informed decisions on the spot. Brands that work in this space effectively will help forge closer relationships with customers since they help to make their lives more straightforward.
“Here, there and everywhere”
Mobile internet technologies are enabling consumers to lead different lifestyles from even a few years ago, getting information on the move. This is creating a feeling of freedom, allowing people to be much more spontaneous.
T-Mobile internet technologies are enabling consumers to lead different lifestyles from even a few years ago, getting information on the move. This is creating a feeling of freedom, allowing people to be much more spontaneous.
There are likely to be further developments of the pop-up culture where brands can set up in a local area for a short period of time creating excitement and a buzz within a community.
Source: The Promise Expert Forum, a co-creation group of about 30 consumers and industry experts who discuss and develop ideas around pertinent issues.