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In recent years,
more and more retailers have seen the importance of branding
and have recognised the need to adopt distinctive positioning
within their marketplaces. However, the drivers of branding
for retailers are often misunderstood, and it is sometimes
unclear what a retailer needs to do to develop their brand.
The ACNielsen | ShopperTrends Study 2003, conducted in 12
Asia Pacific countries, tackled this problem with the help
of the proven ACNielsen | Winning Brands approach to identifying
the sources of brand equity.
What Is Brand Equity for Retailers?
Store Equity (our measure of brand equity specific to retail
chains) measures the strength of the store brand by examining
the extent of consumer loyalty, and their willingness to pay
a premium to shop there. It’s not the same as ‘customer
satisfaction’: customer satisfaction is about the day-to-day
interface with customers, and while shopping experience is
obviously vital for retailers, it is not the only factor in
developing a brand. To build long-term commitment, and to
drive conversion opportunities among non-customers, retailers
need to develop their store, as well as customer, equity.
ACNielsen ShopperTrends uses sophisticated multivariate analysis
techniques to model what drives store equity – that
is, what factors do consumers seem to use between what they
regard as a ‘good’ and ‘less good’
retail brand.
The chart below summarises the results averaged across three
key types of markets.
The largest drivers are not related to specific store features,
but are called ‘awareness’ and ‘consideration’.
These general drivers of brand differentiation summarise the
degree to which very basic brand knowledge criteria (Do I
know it? Is it ‘top-of-mind’? Have I used it before?)
is key for consumers. It is apparent that these really general
differentiators are strongest in developing markets Indonesia,
Philippines, etc), less important in what are sometimes called
the Asian Tiger economies (Singapore, Thailand, Hong Kong,
etc) and of least importance in Australia and New Zealand
(where strong retail brands are longest established).
This implies that, as markets develop, shop features and imagery
will become more important to consumers. In developing markets,
therefore, those retailers who work to develop their brand
positioning will have an advantage as markets mature. Yet
we can also see that even in more developed markets, consumers
continue to differentiate between store brands on the basis
of pretty superficial aspects of brand knowledge. The basics
of making plenty of ‘marketing noise’ and providing
incentives to induce trial remain essential for brand building
everywhere.
Consumers also use ‘Location’ to distinguish between
store brands, (convenience to access generally, as well as
convenience of specific location), and clearly a strong store
brand has to be accessible.
After these broad factors come a number of more specific drivers.
Note, however, that one of the big findings from ACNielsen
research is that in terms of general brand imagery, consumers
often don’t think about stores on the basis of individual
benefits – rather they build holistic assessments based
on a few broad criteria.
This points to a big difference between building store level
customer loyalty, and driving chain level brand equity. For
the former, a retailer needs to identify and fix problems
at a very specific level (eg speed at checkout counter), but
in terms of general brand development, it may not be enough
to improve single attributes – instead, consumers may
differentiate chains on the basis of – for example –
‘overall ease of shopping’ and it may require
changes on a number of related performance areas to change
their assessment of the store brand.
For ShopperTrends, we have identified four such holistic criteria:
- Everything I expect (essentially the degree to which
chains provide all the key range of requirements/facilities,
etc)
- More than I expect (the provision of key extras, notably
extra/better promotions, better quality fresh and instant
food, good private label brands)
- Value for money
- Hassle free shopping.
It is notable that all four of these drivers are (in the Tiger
and Australia/NZ markets at least) of reasonably equal importance.
In the Tiger and Australasian economies, ‘Value for
Money’ – a very traditional positioning for many
retailers – does not differentiate markedly more than
‘hassle free shopping’ and ‘offering more
than I expect’. This may be partly because consumers
do not necessarily see much difference between the chains
on this driver, but it also seems to reflect a developing
customer interest in ‘extras’ as economies develop.
Certainly, ‘hassle free shopping‘ and ‘offering
more than I expect’ are more important in the more developed
markets, and are areas that retailers in fast-developing markets
(like China) will need to emphasise if they are to prosper
as the market matures.
Overall, the research emphasises the need for retailers to
develop a broad-based approach to developing their brands.
Strong store brands need to be familiar, accessible and offer
value – but as markets develop, so do consumer expectations,
and they need increasingly to look at the totality of the
shopping experience and invest more in convincing consumers
that they offer ‘something special’.
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