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Stepping up to the markTactics for brand success in the retail marketSTEPPING UP TO THE MARKTactics for brand success in the retail environmentRowland HemingBusiness Development DirectorDesign Board(Brussels – Sofia – Geneva)

It’s not the things we look at butthe way we look at things

Stepping up to the markTactics for brand success in the retail marketMore than 50% are spending less - or spendingmore wiselyImage source: daveanddawncook.com

Stepping up to the markTactics for brand success in the retail market“Change is omnipresent in consumerrituals and attitudesThe way we shop has changed moredrastically over the past year than anytime in recent history."Source: Information Resources, Inc

Stepping up to the markTactics for brand success in the retail marketWhen asked, consumers say:I cook at home more often (60%)We eat together as a family more often(44%)I go out with friends less (34%)My friends and I get together more often ineach other’s homes (26%)Source: Information resources Inc – Consumer study 2009Image source : The Sydney Morning Herald

Stepping up to the markTactics for brand success in the retail marketConsumers today:Cut back on purchasesEat less/fewer mealsBuy more groceries on saleUse coupons moreEat out lessSource: HealthFocus International consumer studyConsumers have become smartshoppers

Stepping up to the markTactics for brand success in the retail marketFood giants like McDonald's have been found the need to invent the“Dollar Menu” to keep customers coming

Stepping up to the markTactics for brand success in the retail marketWe know that in recession people turnto hard discounters and store brandsBut whilst value remains an importantfactor, consumers today are not simplylooking for price reductions.

Stepping up to the markTactics for brand success in the retail marketPercentage of shoppers who rate the followingcriteria as “important” or “very important”:Overall quality (92%)Trust in the product (87%)Product safety (83%)Good nutrition (81%)Reduced sugar/fat/salt (53%)Size options (63%)Price (87%)On sale (80%)Source: Information resources Inc – Consumer Study 2009Whether they shop for brands orprivate labels, consumer’s buyingpatterns and behaviour are alsogoverned by other different criteria

Stepping up to the markTactics for brand success in the retail marketReflets deFrance

since 200050 since 2003170BURLEXTEMPO26 since 200528-50since 20091-7since 2010since 2005since 2006PICCADILLY1–434-502-15since 19947since 20092 - 30 Ramstore “Migros Turk” (4) and soon Tesco? (UK)In the last 10 years there hasbeen a retail revolution16 - 130since 2004Since 1999Here in Bulgaria, shoppingbehaviour is undergoing a bigchange too 11Source: Internet research 2010MAXIMAsince 2006

Stepping up to the markTactics for brand success in the retail marketThe next 5 years could seeover 150 new storesopening up in BulgariaFANTASTICOVERDEELEMAG GOURMETsince 199420since 200016 since 19983 Source: Internet research 2010 over 32 shopping centersconstructed or in thepipelinePutting local retailers underthreat and completely changingthe shopping environment

Stepping up to the markTactics for brand success in the retail marketSupermarket chains like Plus andKaufland have an aggressive growthprogram projecting around 200 stores in BulgariaBoth are part of the Lidl group (Plus since2010)In Western Europe, Lidl opened onenew store every day in the last 15years.

Stepping up to the markTactics for brand success in the retail marketThis means more private labelofferings and the increased visibilityof Western brand products andchanging consumer habits:ConvenienceReady MealsSnack foodsHigh value processedfoodsLarger sizes etc.Source: Gain report 2009

Stepping up to the markTactics for brand success in the retail marketAs we have seen and as experience inother markets has shown, we can expectconsumers to react in two distinct ways:1 Cocooning2 Exploring

Stepping up to the markTactics for brand success in the retail market1 Cocooning:Doing more at homeTrading-up to small luxuriesLooking to the pastBuying brands andproducts they know

Stepping up to the markTactics for brand success in the retail market1 Cocooning:Ideal Chewing gumCocooning will also createsopportunities for many older localbrands – as these will hold fondmemories for consumers and willoffer reassurance but if these brands are going tosurvive in Bulgaria’s expandingretail environment, they will need to“step up to the mark” and embracethe new realities of the marketDetska Zakuska biscuits

Stepping up to the markTactics for brand success in the retail market2 ExploringSearching after value viaexperimentation and discovery:Looking to experimentwith discounter productsComparing brandedcommodities withcheaper optionsExploring the newproducts on offer frominternational sourcesImage source: new.premiumlifestyle.net

Stepping up to the markTactics for brand success in the retail market2 Exploring:The difference in price betweenmajor brands and private labels willbecome harder to justify by theadded value of a brand name, it willbe seen as a “brand tax” that manyconsumers will be no longer willingto pay .unless there is a reallycompelling reason.Rowland Heming - 2010

Stepping up to the markTactics for brand success in the retail marketThe vanishing middlemarket.Our study of 25 industries and productcategories in Europe, North America,and on the global level shows theextent of this phenomenon, known asmarket polarisation.McKinsey reported that, over a 5 yearperiod, the growth rate of revenues formid-tier products and services trailedthe market average by nearly 6percent a year2 Exploring:The result is that we can expect tosee a growing polarisation of themarket, with a growth in both luxuryand value brands and a shrinking ofthe middle market.

Stepping up to the markTactics for brand success in the retail marketSo, brands will either have to tradeup .This implies that brands who want to remainon consumer’s shopping lists will need tochange.They will need to justify their price premiumby investing in creativity, innovation andquality, they must embrace research anddevelopment and look to re-create relevantand important differences that giveconsumers a real reason to buy.Rowland Heming - 2010

Stepping up to the markTactics for brand success in the retail marketOr trade down Already, around the world, we can seemajor brands and mainstreamsupermarkets are introducing “value”sub-brands that offer major reductionson standard pricing, in an effort to attractconsumers away from the harddiscountersImage sources: My private brand & bhc3.wordpress.comRowland Heming - 2010

Stepping up to the markTactics for brand success in the retail marketAs we have seen, even softdiscounters are redefining theirprivate label strategy.Carrefour’s “Carrefour Discount”range, clearly launched to fight backat the threat from hard discounters.Image source: yakyakinfo.wordpress.comRowland Heming - 2010

Stepping up to the markTactics for brand success in the retail marketThere are between 20,000 and40,000 product references in anaverage supermarketWhich means a shopper will bemaking over 300 accept or rejectdecisions per minuteBut even though we arebombarded by brands, logos,colours and claims, we somehowmanage to make a choice www.readersdigest.com.au

Stepping up to the markTactics for brand success in the retail marketFor both the consumer and the brand theact of shopping becomes a risky business and it’s no wonder we find consumers“cocooning” themselves from risky shoppingexperiences by:Writing shopping listsBuying just the brands theyalready know The question is, how can you get aconsumer to take an interest in your offer ifit is not already on their list?

Stepping up to the markTactics for brand success in the retail market when there is only the packageand the attachment consumershave with its look and feel to helpthem to decideIt’s clearly important to understandthe importance of getting yourpackage communication right

Stepping up to the markTactics for brand success in the retail marketAnd all this happens in anaverage time of 6 seconds per brand

Stepping up to the markTactics for brand success in the retail marketSometimes this is less

Stepping up to the markTactics for brand success in the retail marketSometimes it takes a little longer

Stepping up to the markTactics for brand success in the retail marketSeconds I and 2Shelf stand-out findingthe brand

Stepping up to the markTactics for brand success in the retail marketSeconds 3 & 4Reading the product offer

Stepping up to the markTactics for brand success in the retail marketSeconds 5 and 6Understanding theproduct benefits

Stepping up to the markTactics for brand success in the retail market6 Seconds

Stepping up to the markTactics for brand success in the retail marketAdd to this, tests showthat we can only handleabout 7 pieces of visualinformation at one timeHow many times do the “white” team bounce the ball on the floor?”

Stepping up to the markTactics for brand success in the retail marketWhat can brand owners learnfrom this?:Through in-depth knowledge andtargeted methodologies, brandpackaging can be developed thatis effective and adds value

CASE STUDYactics for brand success in the retail marketLYUKS / ESTRELLAUkraine / Turkey

Stepping up to the markTactics for brand success in the retail market

Stepping up to the markTactics for brand success in the retail market

Stepping up to the markTactics for brand success in the retail market

Stepping up to the markTactics for brand success in the retail market

Stepping up to the markTactics for brand success in the retail market

Stepping up to the markTactics for brand success in the retail market

Stepping up to the markTactics for brand success in the retail market

Stepping up to the markTactics for brand success in the retail market

Stepping up to the markTactics for brand success in the retail marketResults : “Design Board Contributed to incredible growth of the brand in a highlycompetitive market and as a result the whole team enjoyed the EEMA Regional IMCAward”.Ivan Pukan – Category Director Marketing Salted Snacks EEMA at Kraft

Stepping up to the markTactics for brand success in the retail marketTo get the best from their packaging, brands need tounderstand: how shopping decisions are made in the retailenvironment and how can they maximise their strengths?

Stepping up to the markTactics for brand success in the retail market1 BE AWARE OF THE SHOPPINGEXPERIENCEBe aware of all the visual clutter thatsurrounds the consumer.Brands need to discern how to help theconsumer find and understand theproduct, the packaging and the productoffer in a few seconds.This means knowing your category andknowing your shelf experience andmaking your package easy to find

Stepping up to the markTactics for brand success in the retail marketConsumerViewBrandowner’sPOVBrands need to understand thecustomers’ current perception of theirbrand positionTo do this, you will need to understandhow they perceive your brands visualequities then you need to determine yourpoint of difference and decide what youwant your customers’ perception ofyour brand to be

Stepping up to the markTactics for brand success in the retail marketYOU?To define a brand’s positioning youneed to understand the marketyou are in and to define whereyou are within that market, byconducting a thorough visualanalysis

Stepping up to the markTactics for brand success in the retail market2 PROTECT BRAND EQUITIESExisting brands have intrinsic values that arerecognised by consumers - a brand maybelong as much to the consumer as to thecompany who owns it.These values are encapsulated in all thefamiliar visual clues present in your currentpackage and product.To help minimise the risk factor forconsumers, brands need to understand thesevisual stimuli and be ready to protect themfrom erosion over time.