Ideations Newsletter- Issue 1, 2012

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Ideations Newsletter- Issue 1, 2012

  1. 1. Ideations A Retail Publication Issue 1 • 2012How Design Drives Retail Brand ValueDesign has ascended to great importance By studying the companies that do it best, Shopper empathyin the 21st century. It’s practically taking the Interbrand team has identified five Design succeeds best when it is conceivedover the marketplace with its influence. principles that when applied bring the and delivered through the eyes of theWe could argue, in fact, that design is the relationship between design and value to life. shopper. They naturally respond to gesturesretail experience since design is both of empathy. Does your customer needsensorial and cognitive in nature. Simplicity wins inspiration or enlightenment? Provide “Although jumble and intrigue has its place, it through design and merchandising.Because shoppers make purchase decisions complexity doesn’t work in retail,” says Do they need new ideas to address theevery day based on sensory experience, Jeffrey. “Simple intuitive design wins every day-to-day challenges of modern life?a strong design sensibility is a vital time. You may think simple equals boring, Create a store organized by solutions orcomponent of a healthy brand experience. but that’s not how human sensibility offer ultra convenience at every touchpoint. works. Use design to tell your brand story“Design enhances communication and as simply but as compellingly as possible, Shoppers will credit your brand for its relevance identity. It conveys meaning and values,” and the audience — your shopper — will and responsiveness. Think of how beautifully says Scott Jeffrey, Chief Creative Officer, provide its own interpretation.” The Container Store speaks to the shopper’s Interbrand Design Forum. “There are brands need for life-improving organization. that clearly value design, both expressing Japan’s Uniqlo apparel store is an excellent and protecting it across every touchpoint.” example of zen-like simplicity. Shoppers get Retailers are learning to respond quickly to it. The environment asks the shopper to consumer behavior changes induced by“There are other brands where design takes slow down, become aware of the offerings’ technology, economic and time pressures. a back seat to operational effectiveness or quality, variety, affordability and beauty. Last season, Sears gave the overburdened, efficiency,” says Justin Wartell, Executive harried holiday shopper a break by putting Director, Strategy and Analytics, Interbrand “The store in total is a powerful medium for virtual toy shopping walls in airports, malls Design Forum. “But regardless of how an communication through forms, materials, and movie theaters. QR code purchases organization views it, we’ve seen clear textures, light and color,” says Jeffrey. made from smartphones were delivered connections between a strong, compelling “If Uniqlo didn’t speak in a unique and to the doorstep. Empathy raises a brand design and brand value creation.” recognizable language through these above commodity status to true relevance. universal forms, it would be just another trendy college clothing store.” (continued on back)
  2. 2. Retail ObservationsAlmost Human: The Four InternalFactors of Brand Strength • Protection: proprietary elements, scale and geographical spread help secure the brand. It won’t surprise you that the brands that score highest on these four internal attributes are the most valuable brands in the U.S., according to Interbrand’s 2012 list of Best Retail Brands. Take clarity. Target’s brand partnerships and house brand developments all revolve around the notion of “Expect More. Pay Less.” It’s clear the brand intends to stay strong in this rite. Walmart’s high score on commitment translates directly into shopper loyalty.Great brands, like great people, start from • Relevance: does the brand fit you, its The merchant’s 2010 media spend waswithin. The friends you most admire are customer? $869 million. The culture fits the brand.most likely smart, self-aware, honest and • Authenticity: is the brand based on a Walmart thoroughly communicates itslive their lives with integrity. According defined heritage or truth? beliefs and values internally—respect,to Interbrand’s study of the nation’s top • Differentiation: the degree you perceive service and excellence.retailers, the brands Americans rely on most it to be different from its competitors.have a similar strength of character. But at • Consistency: across all touchpoints, not CVS/pharmacy is a great example of a brandInterbrand we refer to it as “brand strength.” just in every store. strong on scale, geographical spread and • Presence: is it seen and talked about the proprietary elements of protection. TheWhile we don’t measure the character of positively everywhere? drugstore takes care to protect the equityindividuals, we do apply our very useful • Understanding: do you have an in-depth of its banner brand as it continues to expandvaluation methods to brands. Why? To knowledge of its distinctive qualities? its portfolio of private labels. Its new urbandetermine a brand’s ability to generate format is helping it compete in denser markets.demand for the future. Even though a With just that brief exercise, you can seebrand has intangible attributes, it can be that even your favorite brand has room Amazon.com is tops in responsiveness, builtvalued as an asset, often worth millions. to improve. But the factors I find most to transform when it finds opportunitiesAnd like any asset, it can be put to work interesting — most humanistic — are to compete in new markets or serve newto drive business. But first, a company internal to an organization’s workings. customers through technological innovation,must understand the way its brand They serve as the foundation of brand more convenience and better prices.works. That’s where we come in. strength. Remember how Toyota disastrously abandoned its fundamental Studying a company through the lensInterbrand’s valuation methodology uses internal principles in pursuit of market of brand is incredibly enlightening. It’s athree elements: financial performance, the share? That’s how important this is. holistic and accurate way of understandingRole of Brand (the portion of the purchase how brand makes money for business. Thedecision attributable to brand) and Brand • Clarity: Everyone from the CEO to ten components of brand strength provideStrength (the ability of a brand to secure the mail clerk knows what the brand a multi-faceted perspective that help youfuture earnings). stands for and understands its values, focus and recalibrate. The marketplace positioning and proposition. keeps changing, but the principles ofThere are ten Brand Strength factors. Six • Commitment: the company invests in strong brands hold true.are external—meaning they are defined by its brand.public perception. Think about these factors • Responsiveness: the brand is able toin regard to your favorite retail brand: evolve and renew itself despite shifts in the marketplace. Bruce Dybvad
  3. 3. Lessons from the BestFive takeaways from Interbrand’s 2012Best Retail BrandsInterbrand’s annual study of the world’s Today’s customers gravitate toward simple Be multidimensionalmove valuable retail brands provides some solutions and more efficient shopping. Over time every brand achieves a level ofkeen insight into matters at the heart of In that respect, most retailers still have maturity and reliability that gives it lessthe retail industry. Here are the leading unrealized opportunity to delight their surprise and relevance. Where do you gothoughts around five top issues: customers with or without digital. after that? How does a brand develop, Improved customer service, easier year after year, a renewed experienceBe less predictable, more agile merchandise returns and a reduction with enough depth to triumph?Now that commerce is available all the in out of stocks, which still reach uptime, any place, online or off, levels of to ten percent in stores on average, By developing beyond a shopper’s needbusiness predictability have been reduced. could have far more relevance. for function and identity by adding moreFor retailers, a fluid and uncertain emotion, richer texture and dimension.market is the new normal. Understand the new pathway Brands can revive their relevance by going to purchase deep into their original attributes to find aResponsiveness now trumps efficiency. For many years, marketers had a distinct fresh connection that turns the ordinaryWhen a brand is responsive to its shoppers’ way of examining consumers’ decision into something meaningful.behaviors and expectations, it adds value process. In theory, when need arose, theto its goods and services. Added value consumer would consider a range of It’s been said, if shoppers were onlyallows a brand to earn more. “Location” brands and methodically narrow their interested in price, there wouldn’t be muchis redefined as reach and responsiveness options to a final choice. In response, retail. The variety of retail we have todaythrough store count in combination with brands addressed their points of proves that different people value differentonline impressions and mobile transactions, awareness and purchase through things when it comes to acquiring goods.as well as real-life social interactions. advertising and promotional spending. The trick is to find the value beyond the transaction. The world’s best brands knowIt’s a major challenge for an agile brand The pathway today is more complex what the customer values, and workto keep all touchpoints connected and as consumers connect digitally with relentlessly to provide it for them.aligned. So is maintaining the expected myriad brands through channels outsidelevel of customer service, which in the marketer’s influence. They spend Think omnichanneltoday’s competitive landscape becomes significantly more time in the research Many a traditional retailer has treatedexponentially more critical in helping every phase. Thanks to social media and online its e-commerce operation almost as anshopper interaction lead to brand adoption. reviews, consumers remain engaged with afterthought, leaving it without resources products for an extended period of time or commitment. The typical state of crossUse digital to simplify after the purchase, evaluating and channel commerce remains poor, plaguedJust because you’re digital doesn’t mean sometimes advocating for the brand. as it is by information silos, organizationyou’re helpful. The prevalence of low-utility issues, and non-interoperable programsapps, and gimmicks like augmented reality Smart retailers are studying this path to that frustrate customers.fitting room mirrors are usually short-lived find leverage and insights they can profitablyexperiments. Consumers find that such act on. It requires devoting resources to The best retail brands are taking stepsthings merely complicate their lives. identify the pathway and study its intricacies, to fix the problem, but there is a long then applying the insights to revise strategy, way to go and not much time. It’s estimatedHowever, digital tactics used in the service of media spending and organizational roles. that by 2014, almost every mobile phonetargeting and segmentation can help deliver However, simply watching and listening will be an internet-connected smartphonesomething shoppers value as much as price; to shoppers still works because despite all and 40 percent of Americans willsuch as advance notices, personal reviews the digital research, many decisions are use tablets.or recommendations from peer shoppers. still made in the store. (continued on back)
  4. 4. How Design Drives Retail Brand Value Lessons from the Best Brand voice brand idea, design can surprise, delight The challenge omnichannel represents is“Apply your brand personality or ‘voice’ and push boundaries. It can push so far as great, but so are the rewards. Retailers will consistently and in a compelling way,” says to break paradigms of tired categories, find that the digital and physical arenas Wartell. “Even if it’s unexpected. Even if it allowing a brand to take ownership of a complement each other instead of competing, defies convention. We’ve seen plenty of unique, protectable experience.” increasing sales and lowering costs. missed opportunities to connect with and engage the customer because brand Australia’s health and beauty chain, Aesop, But to achieve that, entrenched anti- touchpoints have been overlooked or believes good design can improve your life. digital retailers will have to overcome their underestimated.” The brand collaborates with designers shelf-centric way of thinking and pick up and architects to create stunning product the pace of change. Brand-led companiesGreat brands have presence. They are able showcases akin to art installations. By doing will have an advantage when it comes toto generate excitement, even love. They so, it has managed to break out of the adopting a new perspective that allowsare talked about because they find ways chain mentality to create distinct branded them to integrate disparate channelsto become part of the visual landscape environments that defy categorization. into a single profitable presence.of our lives. Find your truthTarget has amazing discipline and consistency Lastly, great brands exist for a reasonwith its beautiful whimsy. Touchpoints are beyond the transaction. Retailer T2 stopsplayful and distinctive. Target has a history just short of a crusade when it comes toof defying convention, such as its vertical converting people to the sensory experiencefashion show on a skyscraper, and buying of tea. To enter a T2 store with its strikingout all the ads in The New Yorker. Its passion design and colorful modern edge is toplayed out in design creates anticipation have a sensory experience.and generates buzz. “Shoppers perceive the brand as rich in“Design abhors a vacuum,” warns Wartell. character, credible and distinct,” says“What is not designed with an eye to Wartell. “The authenticity of its claim, the managing and crafting the experience clarity of its message and the company’s To download the full 2012 report on the most will inevitably be ‘designed’ by the internal commitment to the brand make valuable retail brands in the world, go to shopper, a supplier or by accident.” it a powerful contender.” www.BestRetailBrands.com. Provoke the audience Any retailer thriving today knows it’s Humans seek novelty and entertainment. competing on experience as much as product. But novelty has a habit of wearing off. Brands must devote themselves to delivering“Design has the obligation to provide value tirelessly through the pursuit of newness and entertainment,” says Jeffrey. remarkable experiences. Brand value is“While maintaining the integrity of a great too important an asset to leave to chance. Ideations A Retail Publication by Want to be greener? Have IDEATIONS sent to your email. Send your address to jessica.steiner@interbrand.com. 7575 Paragon Road, Dayton, Ohio 45459 P +1 937 439 4400 F +1 937 439 4340 retail@interbrand.comRetail Design | Shopper Sciences | Brand Strategy | Digital | Documentation and Rollout Bruce Dybvad, CEO Jill Davis, EditorFor more information or to be placed on our mailing list, visit our website: www.interbranddesignforum.com James Bacon, Design/Productionand complete the contact form. Reprints of articles or excerpts without the express written permission ofInterbrand Design Forum is prohibited. Ideations will print 4 issues in 2012. Subscriptions: $125 annually in ©2012the U.S.; $150 elsewhere.

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