A presentation synopsis of a talk given by Clive Woodger, Managing Director and Owner of SCG London at the fifth international DIY and Household Congress 2011, Russia’s leading forum for the DIY industry, produced in association with EDRA, the European DIY-Retail Association on the 26-27th May.
The presentation provides an overview of consumer mindset changes, the challenge of sector convergence and growth of multi-channel retail. These factors highlight the need for a clearly articulated brand strategy to differentiate offers in an increasingly competitive market place. Examples were given in the UK, Iceland and Russia to illustrate different approaches to brand profile development.
The UK market post recession has overcapacity and illustrates the vital requirement to clearly differentiate your offer from the competition. Multi-channel development gives the consumer immediate wide choice and ability to compare opinions and prices. The need for an inspiring brand and commercially stable strategy was emphasised and a checklist of components and issues to be addressed was presented.
Defining why your image and reputation would be positively differentiated from competitors through your vision, values and ethos and the tangible and emotional attributes of your company and offer is difficult. Does your vision inspire staff, management and investors? Can you ensure every potential interaction with your operation will effectively contribute to a positive perception of the organisation as a retailer brand you can trust and a first choice solutions provider?
The function and scope of a typical Brand Strategy should inspire, direct and engage vested interests and stakeholders, manage external audiences and reflect latest ethical and sustainability practices and policies. This is particularly tough in a converging market where food and fashion retailers are moving into home offers, specialist are widening their ranges and department together with furniture stores are developing their home and lifestyle offers. Issues of credibility and reputation then become key issues. “What are you known for?” is a classic differentiation test.
Surprisingly, despite these pressures, DIY chains still needing to address basic issues which have not changed in the last ten years – appealing to women, selling ‘soft‘ home décor convincingly as well as ‘hard’ diy, providing inspiration and information and making stores easy to navigate and a pleasure to visit. Ten years ago SCG London spent a year working with B&Q developing a new smaller flexible convenience format which would be rolled out as a conversion of the superstores which were starting to be cannibalised by the large format ‘warehouses’. It was specifically targeted at women as research had shown B&Q failing significantly to address this key group. Whilst successfully prototyped, management changes meant the project was discontinued. This was ironic as its layout concept, careful zoning, less intimidating merchandising and distinctive point of sale strategy was ahead of its time and highly relevant today.
Husasmidjan, Iceland’s largest DIY chain realised they needed a sophisticated semi-department store approach to their décor, living, kitchen and bathroom offer but combined with a traditional DIY offer for tradesmen. With careful zoning and merchandising and graphic treatments we were able to create a contemporary flexible environment and brand personality to meet these diverse audiences aspirations.
Two contrasting Russian companies were then reviewed to show how a city décor specialist Starik Hottabych and a massive hypermarket operation Tvoi Dom could achieve more relevant and effective brand experience. Starik is an example of creating a new contemporary offer but clearly based on the well know heritage brand equity. This now attracts a younger profile customer as intended but retained its existing customer base. Tvoi Dom’s biggest issue is breaking down a massive offer into easily navigated zones and clear point of sale with a new brand identity, graphic communication and marketing strategy.
The concluding viewpoint of the presentation was the opportunity of Russian DIY operations to use their local knowledge of customer needs and different more flexible format operations and opportunities to create concepts which are highly relevant to the local customer aspirations. The international operations currently are not so flexible in their offer and formats. Russian companies should therefore leverage their local credentials and advantages. The opportunity is to achieve positive community interaction and develop a distinctive brand profile and real differentiation, offering relevant accessible products and services which can be best tuned to meet local market needs. Maybe its time for less CRM and a bit more RRCC – Real Russian Customer Centricity!
Clive Woodger
May 2011
http://www.scglondon.co.uk/
