The Marketing Expert ProblemBy Tom Dougherty
10 July 2014
Marketing Experts are the problem in retail
For a brand strategist, it is disheartening to see retailers rely on basic consumer attitudes about the retail market in general for good news, rather than seeing an uptick in sales due to the success of the individual brands. Few retailers are even doing a passable job of making their brand persuasive. However, marketing experts are the problem in this category.
Wal-Mart reported a 17% rise in profit, as Wal-Mart owns “cheap” in the minds of almost consumers. Neiman Marcus, which owns “luxury,” saw its total revenues increase 7.7%. Those retailers, at least, have some kind of position in the minds of consumers.
(Read a new article on the rebranding of department stores here.) But the rest simply depend on consumer spending habits to improve across the board. When that happens, it helps the retail industry. But it doesn’t’ help any particular brand looking to steal share.
Compare Wal-Mart’s increase to Sears and Kmart. A 1.7% increase in Kmart same-store sales was offset by a decline of 6.1% in same-store sales at the Sears domestic outlets. Why the difference? Because the Sears brand has no meaning and the Kmart brand means cheap but not cheap enough.
Marketing Experts ARE the problem
The problem with retail marketing is the marketing experts. More explicitly, retail marketers are not marketers at all. They are simply merchandisers. Retail marketers don’t understand the intricacies of persuasive brand marketing at all. They only understand what to do with products and merchandise once someone stumbles into one of their stores.
The crux of the problem in retail marketing lies in a fundamental misunderstanding of today’s nature of retail’s mature market. Retailers seem to think they are selling products or categories of products. It was a workable idea when shopping was in its infancy but times have changed. Today, preference is built around branding a customer and not selling “things.” If any of the players wants to survive and grow they need to stop worrying about the usage and attitudes of their current customers and begin to understand the anthropology of the customers who do not use them. Why is this happening? Because, retail marketing experts are the problem.
The history of the current retail market is worthy of some examination to understand where all this foolishness started. When the major department stores first took the world by storm they pushed most of the mom & pop retail specialty stores out of business. Instead of going to a lingerie specialty store, and then heading to a dress shop for an outfit, the department store “departmentalized” all of these separate divisions under one roof.
Today, the best example of this is found at Harrods. There, you can find all of the specialty “stores” under one roof: Lingerie, kitchen, furniture, toys, kitchen, bath, hats, dresses, shoes, chocolate, even a green grocer. And these departments have their own price point. You can shop in Harrods from Burberry to benign. From Luxury to utilitarian.
This model translates to supermarkets as well. There, the green grocer and butcher shop were replaced by an all-in-one model that saved the busy shopper time and money. As a result, we have Harris Teeter, Giant Publix, Food Lion, ACME, Shop Right, WEIS and all the others.
The same model applies to the large pharmacies, which replaced the drug store-apothecary of the 30s with the convenient store hybrids we find today at Walgreens, CVS, and Rite Aid.
The next sea change in department store retailing took place right under the noses of the big chains and with their acquiescence.
Enter the mall
There was a time when department stores were located in cities and the rising population in the suburbs still relied on the center city for its shopping experiences. When the malls began to arrive, only the very largest cities, with an intact and growing urban population of residents, continued to support the downtown department stores. For the rest of the population, the mall became the new commercial hub and the anchor stores quickly built their new flagship stores at corners and intersections within the mall environment. (Read a quick look at the retail category here.)
The new shift is to stand-alone strip malls with the “anchors” being a Target store and a Bed Bath & Beyond. The marketing experience of the mall has been replaced by a new economy, the economy of time saving. Target has no more of a brand promise than simply a new department store of mall stores.
Meanwhile, Sears, Macy’s and Kohl’s fight for the Target and Wall-Mart leftover crumbs and battle for the dollars spent during special seasons like “back to school: and Christmas. The rest of the year, the stores are deserted.
Sears has even lost its business as an appliance retailer of choice to Home Depot and Lowes. Watch SEARS’ marketing and you will see that Sears still sells “things.” They don’t sell the brand of they customer they wish to influence because they have no idea who these people are.
Retail is More Than Patterns
Oh, they know where they live and the rest of the demographics. It is certain they even know the traffic pattern within each store, which after all what merchandisers’ jones for. But, they have no idea how to reach into the innermost precepts of the target audience and develop a brand the target audience will covet because it is about the prospect/customer and not about Sears.
Sad really. This quintessentially American retail marketers have been relegated to value only in our memories. And, retail marketing Experts are the problem. What they do has no relevance to our lives and the truth of this can be seen in their marketing advertising. Raise your hand Blue Team, Sears is for you.