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As consumers' expectations, needs and values change, retail and product brands are in danger of losing their meaning, according to one branding expert.
Cash-strapped consumers understand exactly what products and services are worth, and they "need a reason to buy now," Dr. Robert Passikoff, president of Brand Keys Inc., an international consulting firm, recently told me. "People are not looking for 'stuff,' they are looking for 'brands' -- not just names people know, but brands that resonate with authentic values. Just because people know a brand name, doesn't mean it's a real brand today. We've become very sloppy with the word 'brand.' It's become a catch-all for 'I know it.'"
C-stores that positioned themselves almost exclusively as the seller of major national brands must reconsider their product mix and figure out the best way to meet their customers' expectations. "Look at the business through the consumer lens," Passikoff said. "Most retailers and product makers are still talking to themselves."
While inventory technology helps retailers determine which products sell and which don't, retailers should more aggressively seek out products, initiate marketing strategies and create shopping experiences that best engage consumers. "You can be a box on the corner with all of the products I want, but that will not keep me as a customer if service is poor or something else does not meet my expectations," Passikoff said.
Among the realities of branding a convenience store operation and the products and services it offers are:
"Value" is the new black. "People aren't just looking to buy something on sale, they are looking for a reason to buy at all," he said. "Value is not just price. People are looking for value-for-dollar. This could spell trouble for chains or products with no authentic offer."
Brands are increasingly a surrogate for value. "What makes goods and services valuable is increasingly tied to what the brand stands for," he said. "The issue is people know many brand names, but don't know them for anything in particular. Is what you are serving up meeting a need? Some private label brands imbued with enough value are now strong brands. "
Brand differentiation is brand value. "Awareness as a meaningful market force is obsolete," Passikoff said. "The unique meaning of a brand will increase in importance as products become more like commodities. Just throwing something up on the shelf at a cheaper price doesn't work. It's become tougher to differentiate yourself. The store experience becomes part of the differentiation of the brand."
Consumer expectations are growing. "Every day consumers devour the latest innovations and hunger for more. Brands that understand where the strongest expectations exist will prosper," he said.
Old tricks won't work anymore. "You are dealing with more brand-literate -- and because of the recession -- value-oriented consumers," he said. "The old message about beer, cigarettes and snacks won't cut it."
Consumers don't need to know a brand to love it. As buying becomes more online-driven and uncontrolled by brands, front-end consumer awareness will become less important. A one-store operator with a good reputation will compete well against a larger, well-known chain, Passikoff said. "A brand with the right street credibility can go viral in days," he said.
It's not just buzz. Conversation and community is increasingly important, and if consumers trust the community, they will extend trust to a brand.
Consumers talk with each other before talking with brands. Social networking and exchange of information outside of the brand space will increase. This will mean more opportunities for retailers to meet customers where they are.