Given the current rate of change in UK retail, including Qatari’s acquisition of Harrods, possibly followed by an outright bid for Sainsbury’s, the imminence of Best Buy, coupled with CEO changes across the board at Asda and Morrisons, the possible sale of Walmart’s UK subsidiary and Alliance Boots flexing of its acquisition muscles, all in the midst of unprecedented economic and political change, it is perhaps time for all retailers to reassess their ‘degree-of-fit’ in UK retail.
At the receiving end are increasingly savvy but distrustful consumers, all determined not to outsource their purchasing decision-making to third-party marketers and retailers, ever again…
When shopping, they want to make informed choices based upon systematic assessment of retail offerings and comparison with alternatives available, in a perpetual search for demonstrable value for money. Meanwhile, Internet comparison sites and online retailers are providing the transparency and the opportunity to apply this informed decision-making at point-of-sale, as never before. In other words, yesterday’s retail marketing mix can be hopelessly out of date, and out of step with the current consumer need.
At the same time, suppliers operating in the same competitive environment need to keep up to date on the relative appeal of their retail routes to consumer in order to optimise brand performance within their Invest trade-partners. Key to this analysis of relative appeal are true objectivity in terms of consumer-shopper perspective, and first-hand experience of alternative offerings by competitor retailers.
Whilst a retailer is an in-depth specialist in their own business, and their current shoppers represent a ‘captive’ audience, they can thereby assess the appeal of their current marketing mix from the perspective of current shoppers. However, their attempts at objective comparison with competitor retailers may be inadequate simply because of the lack of direct access, and their restricted knowledge of consumer perspective may limit potential insights, especially in the case of consumers that shop elsewhere.
A well-focused and informed NAM may be able to fill those gaps. Given that a supplier’s marketing mix is meant to be integrated with those of partner-retailers, it seems important that NAMs should attempt to re-assess the relative appeal of different retailers, from the perspective of the brands’ target consumers. This obviously starts with a detailed assessment of the brand’s 4P Marketing Mix (Product, Price, Presentation and Place), vs. the competition, from the perspective of the target consumers as they shop the aisle, within a realistic category context. In other words, it is necessary to step outside the propaganda and objectively view the brand offering from the point-of-view of the target consumer, accepting that alternative offerings may be as good as, or better than the brand.
As a business consultant to the retailer, the NAM is meant to be a broad, but relatively shallow expert in how the category is sold in all types of retail outlet, thus complementing the narrowness and in-depth knowledge of the partner-retailer within their own retail environment. To optimise their value to the partner-retailer, the NAM needs to understand how the different retail business models work, and the role played by the category in each format.
It is then necessary to work out what the retailer is trying to communicate via their 8P Marketing Mix (Products & Assortment, Pricing, Promotional activities, Place i.e. store location, Personnel, Physical distribution & handling, Presentation of stores & products, and Productivity), allowing for the fact that the supplier’s category may be vying for attention amongst the 400 categories typically carried by a major retailer.
With the benefit of this insight, and a knowledge of how the category operates within the chosen retailer, coupled with a clear understanding of the brand consumer’s behaviour within the retailer’s traffic flow, it can be possible for the NAM to walk the aisle and experience the retail offering from the consumer-shopper’s perspective. Repeating the process in nearby competing stores can help in comparing the partner-retailer in order to assess relative appeal, and to identify ways of improving the impact of the 8Ps on the target consumer.
This added insight will then enable them to consult with, and advise, the retailer on possible adjustments that may increase their competitive-edge, thus helping them to identify and fill worthwhile gaps in a very crowded market.
Alternatively, why not treat all retailers the same, and use price to devalue the category….
