17 January 2018

BRAND - What is Changing the Brand Game?

No Name Merchandise and a Cohort of Buyers That Aren't Brand Conscious

Image result for brand images
The First Translucent Soap 1807

He needed a set of impact sockets. Picking up his smartphone he asked 'Google' for the best deal on impact sockets. What happened next amazed him. The first three entries were brands unknown to him but all  sold by Amazon.

Craftsman, a brand he trusted for lifetime warranty was near the bottom of the page. The rabbit hole got deeper as he was transferred from site to site. Eventually he read that Sears had sold Craftsman to Stanley Black and Decker early in 2017. He would need to find a retailer if he wanted to discover the price and acquire a Craftsman set.

Back to Amazon, he was able to order a full set of TekTon impact sockets with carrying case for C$88.00 with free delivery to his rural setting. Sure enough, two days later he picked up an Amazon box at Canada Post Office. The packaging was similar, the price was lower, the sockets worked fine and the convenience was surprising. This is an actual experience of InfoStream staff near Madden, Alberta.
This kind of episode is changing the retail game and moving buyers away from the well known brands and retailers to discover the best price and convenience they can find.
A brand or trademark has been highly valued by those who analyse and invest in businesses. This intangible asset is often recorded as 'goodwill' on the balance sheet. Here are the world's most valuable brands in 2017 as ranked by Forbes.

There are a number of reasons why the value of a brand has historically been very important: Brand reputation supported loyalty; Brand recognition influenced prospective buyers; and, Brand imaging differentiated competitors in a marketplace. However, it seems brand significance has changed for the empowered consumer. They are demonstrating they care more about discoverability, assistance, convenience and price.

Furthermore, name brands have far less influence than YouTube and other social media channels offering authentic story and DIY advice from the users of lesser known products and services. The impact of brand on the price and value complex has also diminished as Dollar Shave Club and Harry's have proven in the past 18 months. Gillette's pricing succumbed to stiff competition from these startups despite the 'recognized' value of the Procter and Gamble brand.

Another large impact is the rising cohort of buyers that do not seem brand conscious. Millennials have a different approach to jobs, education, money and buying. They are more likely to be skeptical of brand promises and more likely to buy without giving brand a second thought.

Just before Christmas, Bloomberg featured an article by Matthew Boyle, entitled 'The Retail Apocalypse Is Fueled by No-Name Clothes'. One of the revelations in the story was how the retailer is developing clothes for Amazon’s surging apparel business. 

Amazon representatives met with fashion designer Jackie Wilson. They wanted her to make a knit top for women that would be sold on Amazon. They wanted the fabric to feel heavy and high-quality just like name-brand attire.
“They are not concerned at all about how many units they sell, and they’re not focused on margins,” says Wilson, whose company in Syracuse, N.Y., makes clothing for Kohl’s, American Eagle Outfitters, and J.C. Penney Co. “They’re concerned about customer satisfaction. They want five-star reviews.”
The Google research we published earlier shows that customer assistance and satisfaction are the primary elements of the new battleground for retailers. Customer satisfaction seems to be the driving force at Amazon. And why not. They have the lead in discoverability, logistics, customer assistance, price and convenience. So why not go for customer satisfaction and have the whole enchilada.

No comments:

Post a Comment