Reclaiming Brand Value in Post-Recession Retailing

Under intense pressure to make sales, many retailers—including elite, once-unshakeable brands—developed functional, multi-layered discounting strategies that buy volume at the expense of value. Customers have been enjoying the fruits of a brand value meltdown that’s allowed them to buy even better-grade merchandise for as little as 15% of MSRP. This attrition of brand value directly affects margins, diminishing ROI and severely reducing corporate profits.

Retailers can’t just expect consumers to go back to paying full price when things get better economically. To bring that profit margin up to where it used to be, retailers will need to redefine the dimensions of brand value and re-engage their consumers’ interest with better formulas at the point of sale.

This calls for strategic and tactical innovation at retail—both in the customers’ experience with the brand and in the brand’s relationship with its customers.

Retailers will want to crack the codes that will lead them back to old relationships based on new rules of engagement. The four “codes” listed below provide the foundation for identifying and communicating these rules to the post-recession shopper. Retailers or brands at retail may find themselves wanting or needing to use one or more—or all—of these codes.

Equation Code: If what you are selling is quantifiably better than the competition, you will need to overtly and repeatedly demonstrate that at every retail touch point. The days of assuming quality brand value are over.

Sensation Code: If your product isn’t functionally better, you need to make it FEEL better if you want to charge a premium, rather than discounted, price. Think of retail as a stage, your product as the star, and the shoppers as the audience. Stage sets are never as real as they look. They evoke and suggest a substance that isn’t actually there, but they help to add to the audience’s enjoyment—as you should do with your customers.

Relation Code: In a universe of essentially commodity products, the brand value differentiator can be the “offline” connection between the marketer and the market. If what matters most to your customers is also what matters most to you as a company, don’t fail to communicate those common interests and communicate them throughout the customer’s retail experience with you.

Identification Code: Sometimes you have to recognize that it’s the customers who define your brand and not the other way around. When you accept that your brand does not and cannot exist without your brand-defining customers, it’s time to celebrate the role they play in your success. THEY are your reason for being, so thank them publicly—and often.