Retail advertising awareness drops

Tis the season where many retail advertising makes or breaks the retailers themselves. That’s why Stealing Share has been offering suggestions and criticisms for the industry lately.

retail advertising
With low awareness of all retail advertising, the future of those retailers is uncertain.

It’s a market that’s simply a mess. NBC News recently reported that a handful of retailers may announce closings unless this season’s sales drastically change things. Shoppers are increasingly shopping online. That’s a problem for retailers because Amazon owns that space.

The simply fact of the matter is that retailers are in this quandary because they thought they could exist on low prices and relative convenience. Turns out that shopping on Amazon is more convenient and offers the better deals. Who knew?

Shoppers also buy based on brand. And, right now, there is so little loyalty among consumers to those brands that the new parlor game is figuring out the order of retailers going belly up.

Most ignore retail advertising.

The news gets worse. The YouGov BrandIndex reported that almost half of all large retailers are seeing their retail advertising awareness drop from a year ago. Kmart and Best Buy suffered the biggest drops, but the whole slate of retailers have lower retail advertising awareness.

A bit of caution here. Awareness is one thing. I’m sure most people know of Kmart and Best Buy. What meaning they gather from those retailers is what creates preference, the more important factor.

But low advertising awareness means that those ads are not resonating with consumers. They are simply ignored. And they should be.

The one retailer whose retail advertising is resonating is, get this, Amazon. That’s partly because its new spot – A Priest and Imam meet for a cup of tea – is unlike anything else on the airwaves. It hits a political and social nerve that no other retailer would ever attempt.

But it’s also because Amazon means something to consumers. What does Macy’s mean? What does Old Navy mean? Bed, Bath & Beyond? Any of them?

We can help. Call us. But it means being honest in your own advertising and brand evaluation. Otherwise, the doom and gloom continues.

McDonald’s tactics are not enough

Here’s another one of McDonald’s tactics that is an exercise in sheer stupidity.

McDonald’s, the fast-food king of the world, is instituting kiosks for ordering and initiating tableside service.

Let me write that again. Tableside service at McDonald’s.

McDonald's tactics
McDonald’s tactics are just that. They don’t fix the main problem.

You’ve got to be kidding me.

What I want most from a McDonald’s is somebody waiting on me as they serve me crap food. What’s wrong with the current system? We order food, get it and eat it. Simple and easy. The industry is called fast food, after all.

Also, for most people, the drive-thru is the main source of delivery, so this is just a stunt. McDonald’s does not typify a dining experience. And it never will.

McDonald’s tactics do nothing to help the brand.

What’s more, this absurd new process is anything but simple: “The company said once people order at one of the stations — sleek, vertical touchscreens — they will get a digital location device and can take a seat. When their burgers and fries are ready, the technology will guide a server to the table to deliver the food with a big smile and a thank you,” according to The New York Times.

I can see that happening swimmingly, can’t you?

In my humble opinion, McDonalds had nothing to fix but it’s brand. But it is so darn nervous about losing share in the fast food industry that it is willing to try anything.

But these superficial changes are just tactics. The real problem here is that the fast food industry is under fire. Less and less of us want to plow our faces with garbage food. We want a semblance of health in our lives. Something that isn’t McDonald’s.

I’m sorry, that mindset won’t change because of a kiosk and a phony smile serving a pile of grease.

The soft drink industry sees trouble

The soft drink industry must wake up to a new reality.

You see, there are all kinds of business trends that are transforming industries. We’ve already seen what our smartphones have replaced. Streaming media has made CDs and DVDs obsolete. And, as we’ve written extensively, cold breakfast cereal is in its own mess.

The failure to recognize what’s going on and building your brand to respond to market forces will leave you in the dust. Retailers are flat-out ignorant of enacting true change to adapt to a new reality, which includes dead malls.

The soft drink industry is also experiencing massive change. Bottled water has replaced many of our sugar-infested soda drinking habits, with soda sales dropping 1.5% in 2015. The industry itself is responding with ads saying its players will reduce the amount of sugar and offer smaller sizes.

This is, of course, the equivalent of the tobacco industry saying it will have light cigarettes with less tar in them. The industry itself knows that it has a problem, but is trying to stem the tide of consumers leaving it.

However, the soft drink industry is also responding by diversifying their portfolios. The epitome of irony is that those soft drink companies now own most of the most recognizable bottled water brands.

How the soft drink industry can survive.

If I were to make a prediction, I’d say Coca-Cola has the best chance of surviving for one simple reason. It’s the only one with a meaningful and preferred brand. Pepsi once held a direct position against Coke by being about youth, while Coca-Cola was about nostalgia.

Since those heydays, however, Pepsi has been all over the map and must consider a new direction. Today’s youth are veering away from soft drinks. (A 19-year-old son of a co-worker has never sipped a soda in his life.) Capturing the imagination of Millennials is important, but that means all the players need a different strategy. Not just thumb plugging a hole in the dam.

Even Coke’s recent announcement of a selfie bottle won’t do the trick. It’s a gimmick. Big whoop.

A repositioning is in order for all the players. Otherwise, it demonstrates another industry failing to respond to trends in a meaningful manner.

A case study in exclusivity & more: Costco

Costco might be my favorite place to shop, ever.

Sure, I’ve rattled on about Ikea, have praised the store concepts of Verizon and I believe retailers can copy the atmosphere of the Apple Store. But none of them hold a candle to Costco.

Please, tell me if I am alone with this. But I think not.

There is a rush with Costco like none other. The excitement comes with pulling out your membership card to be clicked into the warehouse, for instance. That rush, if you’re like me, is a little like the anticipation I had as a child Christmas morning. There is always something new (albeit, a lot of items I don’t really need) to pique my interest – and that thill of discovery is indeed just like getting a gift from Santa.

Costco and its model.

Costco
Costco membership has its advantages, both rational and emotional.

It begins with the membership. Actually, we should look at it differently than a membership. What we are really paying for is a kind of exclusivity. Membership can be a hurdle in some cases (like credit unions, but that’s because of other factors). Mostly, however, an emotional driver is being part of an exclusive club.

In this case, Costco promises lower prices (especially in bulk) but members have found that it offers loss leaders that give it some pizzaz.

Consider this from investopida.com:

“The biggest Costco loss leaders in America right now are rotisserie chicken, the hot dog & soda combo and gas. A Bloomberg article has calculated that Costco earns only $14 million in profit a year on its sale of 70 million chickens…These chickens, placed deep into the store along with the cheap fruits and vegetables, mean that customers have to walk through lots of merchandise to pick one up – and hopefully, along the way, they’ll grab some other products to make their trip to Costco worthwhile.”

It’s true. Every time I venture to Costco I normally have one product in mind that I need to pick-up. To find that in the warehouse takes time. In that time, there is much space to cover; space filled with unique goods and samples and odds and ends. Consequentially, by the time I hit the checkout line, I have a full cart. I’m also considering grabbing a slice of pizza or a hot dog on the way out.

Of course I go with the hot dog. I mean, who can beat a large soda and hot dog for a buck fifty?

Nike store showing retail how to look ahead

If you’ve been reading the new articles on this site (and blog), you’ll notice that we’ve been digging deep into the retailer industry. Stores are closing. Sales are dropping. And all retailers are looking for solutions.

You can find our recommendations here, along with a complete study here. But most brick and mortar stores are scrambling to find ways to transform their locations into destinations shoppers will actively seek out.

Nike store
A new Nike store in NYC is showing retailers how to join the technological age.

A new Nike store in downtown New York City is offering a template for just that future.

The shop is a complete interactive experience. Shoppers can try out new products in actual sports settings, such as on treadmills while sensors record the best fit. A personalization studio allows shoppers to laser engrave on their shoes and touch screens mimic the online experience of choosing product.

It’s not exactly what we’ve recommended, but it’s very close. We believe the in-store experience has to join the technological age, recommending digital measurements so shoppers can browse clothes that actually fit.

The Nike store overcomes many retail issues.

Right now, most brick and mortar retail stores feel and look like something from the Eisenhower era. The world has simply passed them by and few integrate their online experience with their in-store one.

That’s how you become irrelevant. (And watch Amazon eat your lunch.)

The Nike stores are a step in the right direction, with the right kind of thinking. There are land mines here, though. A Nike store like the one in NYC – a 55,000 square foot monstrosity – is costly to replicate. (Nike will replicate one in Miami soon.) But the thinking behind such improvements is exactly what retail needs.

There’s another reason why I think this will be a success for Nike. It has a meaningful brand, one of the most meaningful in the world, which says its customers “just do it.” That’s a leadership position.

Retailers must re-think what they do in stores, but they also need to ensure they have a differentiating brand that gives them permission to do all those things. And make them important.