Tuesday 23 July 2013

Integration and the shop as brand marketing....more thoughts on the High Street

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When I came to Bradford, I came as an account executive at a direct marketing agency. And, back then, direct marketing was flavour of the season. The advent of databases, the collection, manipulation and analysis of information, and the idea that we could tailor our offer or appeal to the target consumer - these things made us the scientists of marketing set against the flash, braces-wearing 'above-the-line' folk making those useless TV adverts.

But direct marketing seemed a stale term, more akin to door-to-door selling than to the white heat of information technology. With all our profiling, multiple regression, expert systems and data-mining we rebadged the business - firstly as database marketing, then as relationship marketing - before realising that the unreliable, untargeted advertising was still there, our clients were still spending more on this than on letters and leaflets.

So integrated marketing was invented. Or rather it wasn't, we simply realised that the different bits of marketing activity needed to work together if the campaigns were to succeed. Our clients needed brand marketing as well as targeted marketing.

What's all this got to do with the high street, I hear you cry? Put simply bricks and mortar based retailing has to make use of on-line promotion and sales - we know this and every retail strategist worth his salt is focused on making this transition. But what we haven't appreciated is that this isn't a shift from real to virtual with the high street vanishing but the integration of different channels and their use for marketing as well as selling.

Here's Adam Stewart, marketing director at Rakuten’s Play.com:


“Our view from the marketplace is that there is going to be a form of humanity, and consumers are still going to be interacting with the high street,” he said, explaining that consumers will always prefer to look and feel products and connect with retailers on a face-to-face basis. “What Rakuten’s Play.com is trying to do is be able to offer the services so that high street retailers can have the services without the massive costs and infrastructure to build a digital proposition within a marketplace. So our position is very much not about Cannibalisation, but more about working together with the high street and being able to offer a digital proposition that works in collaboration with a tangible, physical, high street environment.”
All a bit wordy but, in essence, what Stewart is saying is that the virtual retail world needs the high street environment because customers crave tangibility. The problem is that those tangible retailers will struggle to succeed alone - the store becomes as much about brand development and promotion as it is a sales channel.

This can take the form of the spectacular - here's the Johnny Walker House in Beijing:


Diageo describe this as:

...the Johnnie Walker House serves to meet consumer demand for luxury with substance. Blending a bar, museum, retail outlet and an exclusive members club, the Johnnie Walker House Beijing is a response to the demand from Chinese consumers for in-depth knowledge, not only of the specific luxury brands they indulge in, but also of the broader categories the brands fall under.
If you want the more mundane you can check out Disney's presence in Walmart - for sure this makes sales but it's just as much about maintaining the ubiquity of Disney as a brand. Plus of course there's the wonder that is the Apple store - again there's no obvious need for a high technology brand to have a high street presence but the stores provide a strong brand impression in the real world (as well as flogging the odd iPad). When the new product launch comes along and all the fans want one it's better marketing to have all those fans queueing in the town centre than to have them invisibly poised over the 'enter' key on their laptop.

Just as importantly - and this matters in thinking about our centres - the customers that the brand owner wants in his store aren't simply any old customer who wanders by - here's Stewart again talking about retail banking:

 “A very good, corporate, customer, with a high lifetime, probably wants to go in to see a bank manager, and banks need to be able to facilitate that conversation and offer a good service,” Stewart explains. “But a customer who is churning on zero per cent credit cards, banks want them to interact digitally."
Just as Diageo wants high net worth customers in the Johnny Walker House, the future high street success wants high spending, high end customers - the every day buyer can shop from his computer and have it delivered or collect from the Post Office. In town retailing becomes an event, an orchestrated, animated marketing promotion. The customers walking into you shop are there because you've invited them - to a product launch, an anniversary, a preview. They're dressed up to party not slouching round the shops in jeans and an old t-shirt.

Inside you'll get them to engage on-line even more - to like the Facebook page, to follow on Twitter, to join an on-line club for the best customers. And they'll go away and become your best sales people - bragging and preening about the brand urging their friends to get involved.

This integration will be - for retailers - the essence of success. Without a strong on-line presence the retailer cannot compete once over a third, perhaps half, of retail sales are virtual. But that isn't enough - the best retailers will see the shop as one of their essential marketing tools, as a place of rewards, celebration and excitement. As the thing that captures the idea of that brand as fun - as leisure and pleasure.
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“Our view from the marketplace is that there is going to be a form of humanity, and consumers are still going to be interacting with the high street,” he said, explaining that consumers will always prefer to look and feel products and connect with retailers on a face-to-face basis. “What Rakuten’s Play.com is trying to do is be able to offer the services so that high street retailers can have the services without the massive costs and infrastructure to build a digital proposition within a marketplace. So our position is very much not about Cannibalisation, but more about working together with the high street and being able to offer a digital proposition that works in collaboration with a tangible, physical, high street environment.”
Read more at http://www.thedrum.com/news/2013/07/22/true-value-customer-rakutens-playcom-marketing-director-why-understanding-customer#A2BGjJzbeSo66TWI.99
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