To compete successfully in today’s global retail market, a company has to do many things exceptionally well. Generally speaking, however, two things are vital. A brand must be managed as an asset and the customer experience must be continuously engaging. At Interbrand, we do not look at isolated measurements to see how well a brand is doing. Rather, we look through the holistic lens of brand value. It’s a point of view that turns up a wealth of insight for business leaders.

One of the measurements for Interbrand’s brand value methodology is Brand Strength: how likely the brand is to secure future earnings by competing well in the marketplace — obviously an area of intense interest. There are actually ten aspects underlying a company’s ability to generate value, and Brand Strength brings them together — people, products, positioning and partners. In this article, we’re going to address the three components of Brand Strength that outwardly affect the shopper: Consistency, Differentiation and Relevance. Consistency is the degree to which a brand’s promise is experienced without fail across all touchpoints. Differentiation is the extent to which the brand is perceived to be distinct from the competition. Relevance is the brand’s fit with needs, desires and decision criteria across demographics and geographies.

When you walk into a darkened room in your home, you probably reach for a switch and turn on the light. This is a simple example of a transactional experience; you need something (to be able to see) and the light switch delivers (provides electricity to the lamp). The light switch doesn’t compliment your technique, comment on your choice of lamp, or ask you if it can help you find anything. That is because the light switch isn’t trying to make friends with you. Now imagine that you have several choices for how you are able to see in the room: two light switches — maybe the Clapper — all able to turn on the same lamp. Suddenly you need to have a preference and now you begin to evaluate your choices.

It is in this moment of evaluating choices that transactions alone fail and interactions become critical. Interaction experiences require the light switches (if they could think and act) to understand your needs at a deeper level and present themselves quickly as the right choice. Let me add some complexity to our “need” to see in the dark room to make this point. Your significant other is sleeping in the room, and you need to see in a drawer. The original light switch may work, but the light comes on bright and may wake them up. The Clapper certainly wouldn’t be a good choice if you want to be stealthy. The third choice, a dimmer switch, is perfect because you can slowly dial up just the right amount of soft light to get to the drawer and feel for your wallet. The transaction itself still took place, but the dimmer switch was best suited to the true need and has become your friend, at least for the moment. Chances are next time you will reward the switch by using it again, until your need drastically changes. Perhaps next time the Clapper will be the best solution. (You can make up that story.)

When you ask an architect to envision the Store of the Future, their mind races with the opportunities of the clean sheet of paper, unlimited budgets and unlimited resources! The reality of the store of the future is altogether different.

The Great Recession has left us with smaller budgets, dwindling resources and consumers who shop less. And according to the 2007 Economic Census, there were 1,122,703 retail establishments in the United States and a total of 14.2 billion square feet of retail spaces. With such an abundance of existing shopping space, the question to solve is: How will the existing retail environment of today be transformed into the Store of the Future, enticing the shopper and energizing the store personnel to provide a greater return on investment for the retailer?

Building Information Modeling (BIM) offers an exciting platform for renovating retail space, when it is appropriately used by design, construction and executive teams. Building models are constructed from digital representations of parts and components used in construction, complete with quantities and physical properties of the materials used.

These information-rich models allow simulation of things like heating or cooling loads, or physical weight loads. They allow an owner to tap into a robust database of information for use in identifying maintenance needs or merchandising opportunities over the life cycle of a building. In the future, BIM will drive a shift in construction towards premanufacturing or panelization of building components, reducing construction time and waste to provide tighter and more accurate bids.

For consumer brands, distribution is king when it comes to growth. But if you’re a manufacturer with good distribution, how do you pave the way for continued success, especially with upstream innovation plans?

Several years ago, I was working with a leading restaurant client, talking about how they were driving traffic to their locations. This chain was (and is) a generalist in a marketplace with a lot of specialty competition. Every year their marketing plans included “featured cuisine,” promotions such as Italian or seafood, to celebrate their menu variety. The problem was their brand did not transcend their advertising message of “doesn’t Italian food sound great right now?” As a result, the appetized marinara-seeking public drove right past the generalist to their favorite Italian eatery. The generalist picked the fight, but the specialists won the occasion because they had the “judo” advantage of the consumer’s current cuisine-driven preferences.

The idea of judo, using naturally occurring momentum in growth, is not new; in fact, it has propelled Procter & Gamble’s marketing efforts for decades, with brand extensions as well as brand marriages such as “Swiffer with Febreze” that ride the coattails of consumer habit and trust. Where judo is underleveraged is in the aisle and at the shelf. Upstream product innovations that consumer research show to have great potential often fail to get trial and build momentum because the company neglects the consumer’s existing shopping habits.

For that same reason, go-to-market plans that focus on communicating the same benefits with both out-of-store and in-store messaging risk being out of step with the shopper right at the moment they are ready to buy.

Our work as consultants who delve into the inner workings of brands and businesses allows us insight into many different organizations. Despite our diverse clients, their varied industries and the unique customer groups that they serve, we’re frequently asked the same question: how can we improve the overall customer experience so that we satisfy the customers we have and can confidently go get new ones?

For most clients, the definition of customer experience has included everything from retail interactions and call center activities, to social media and internal corporate culture initiatives. The concept is a broad one that touches many disciplines and departments within an organization. But, it leaves organizations ultimately asking who, ultimately, is responsible for the customer experience?

The most likely place to assign responsibility is at the highest level, the chief executive officer. CEOs define the vision, lead those responsible for functional areas, identify strategies to grow, and make the tough decisions that directly impact the organization and the customers it serves. While a CEO answers to a Board of Directors, the definitive stakeholder of interest is the customer. In a world where putting customers first is becoming the expectation, does the CEO need to deliver a higher level of advocacy and experience creation to truly deliver a delightful experience?

Because of our increasingly complicated lives, our access to technology, more choices, and less time, we as customers are choosing the brands that strive to deliver a great experience. Across industries and categories, I believe the CEO should be the strongest advocate for bringing this notion to life.

While our annual 2010 State of the Retail Industry report delineates the challenge for retail brought about by consumer behavior changes in reaction to the great recession and the rapid adaption of mobile technology—many of those challenges will take several years to address. To find seven things that retailers can do right now, we asked our experts.

Scott Jeffrey, Chief Creative Officer

Push for differentiation. There is no time to rest on your laurels. Realize that innovation isn’t a stage, it’s an ingrained brand behavior. In fact, stop thinking of innovation as a “next step” all together–”step” as in a phase of something that stops and starts, or merely cycles through.

My ideal retail brand would be one that never completes a store design prototype. The “never done” mentality is always asking, “What else? What else can we do to make it better?” That type of thinking requires courage. Belief in the importance of change. Granted, not every one of your new ideas will be a game changer, but once you entertain doubt and back off, you pretty much lose momentum. Particularly now, when the customer expectations are so far ahead of what most retailers are delivering in terms of the brand experience.

The minute you rest on your laurels and let your brand and your stores get outdated, you have a really big, hardest-to-do maneuver on your hands: a turnaround. If you have a fleet of any size, you’re in danger of being too big and too rigid to manage a turnaround. But if you’re a constant seeker, a brand that remains loose and nimble, the maneuvers are much smaller and easier to manage. Your creative adjustments and transitions will be happening all the time. Knock down any silos in your way and get to that mindset as soon as you can.

Bill Chidley, Senior Vice President, Shopper Sciences

Consumers’ rapid adoption of the smartphone means it’s time to start thinking about connecting and communicating through that little screen. To make the most of the opportunity to drive demand, mobile optimization should be a top priority for your brand. It’s all about being in the game. Don’t try to justify mobile initiatives with ROI. Move forward with a reasonable hypothesis and prepare to learn and adapt.

Don Rethman, Senior Vice President, Architecture

Consider doing a site survey. Do your shoppers expect to share their shopping experience instantly? Do you plan to make fast calls to action in the store? Your building needs a wireless-based backbone to support that, with wireless connectivity that allows for transitions. This goes even beyond the creation of mobile hot-spots. Buildings must have a distributed, robust and flexible IT infrastructure which will allow technical access to all spaces. It helps if you’re working with architects who are aware there is such a thing as a path to purchase so they can help create a store that increases productivity and doesn’t skimp on the brand experience.

Amanda Yates, Vice President, Strategy & Analytics

It’s vital to map the “customer journey” to understand where best to make the wireless investments, as well as other investments that help your brand drive choice. Mapping will provide the insights that will help you gain advantage and protect sales by offering shoppers what they want in the modes they desire. Not every retailer will need a full-blown program, but each must understand the needs of its customers, what information and access they are looking for and where or how they want to access it. Once these insights are known, the appropriate level of investment and how to spend it will become much clearer.

Dave Nixon, Executive Director, Digital Strategy

The multi-channel ideal is a seamless transition from the physical shopping experience to the virtual experience through every digital touchpoint–one that’s painless for the shopper and profitable for the retailer. However, for most retailers that’s not the first thing you can do. There will be silos to take down, brand strategy work and brand engagement initiatives to adopt before that nirvana is reachable. I’d like to elucidate further on what Bill says (above)—“Get in the game.”

Companies that spend too much time planning their next technology steps will find themselves playing catch up to those that are already moving. One of the main benefits of digital is the ability to deploy it quickly and then modify or adapt the solution depending on the performance metrics for success. In that respect, adopting new digital platforms into your channel strategy is less expensive and presents less risk than physical channels. The time is now to leverage digital technologies for increasing revenue, efficiency and customer loyalty.

Kris Medford, Ph.D., Director of Shopper Sciences

Get to know your shoppers again. Segmentation that is a few years old is downright archaic so make sure your insights are recent and actionable. Who are your shoppers—both those in your store today and those you want in the future? What’s important to them from a digital perspective, and how can you use digital help to make your brand be more relevant to their lifestyle?

Justin Wartell, Senior Consultant, Brand Strategy

The physical store needs to evolve from its position as the “jewel in the crown” to a “tool in the arsenal.” For retailers, the most important thing that can be done right now is to (re)examine the relationship between the physical brand experience and all of the other expressions of the brand. Brand experiences are inter-connected organisms that create an overall customer feeling about the brand. By understanding the role that retail plays in the context of the other touchpoints that are, or can be, deployed, retailers can drive loyalty, reputation, efficiency and value across their organizations.

At this summer’s annual IIR Shopper Insights in Action conference, there was a surprising focus on biology and chemistry, and how all of these subconscious human processes relate to decision making.

This year, the conference had a slight feeling of Bill Nye the Science Guy meets shopper insights. We heard some intriguing facts about how our senses of smell and sight, for example, work in relation to branded scents, and—of special interest to me—why we humans tend to look beyond what is right in front of our faces.

In Shopper Sciences, we are often called upon to create disruptive solutions in store, putting brands in the shopper’s line of sight. One of our constant challenges, especially in mass retail, is that it’s not just our client that wants to be disruptive. It’s every brand in that category, and every category in every aisle. We’re working in any extremely noisy environment.

They say that having no presence on mobile devices in 2010 is like not having a website circa 1999. So true! The digital age is in hyper-drive. 3G access continues to increase, and 4G is already here! Some stats say that up to 99 percent of the population will have some sort of data capability on their mobile phones by 2011.

So what does this mean for retailers? It means the need for a whole new view to their digital strategies. When a shopper can enter a store, scan a barcode, see that the same product is cheaper at a nearby competitor and click a link for directions to take them straight there, the game has suddenly been changed, so to speak. There is an ever-expanding catalog of apps out there to enable this type of shopping behavior (in the store, in the car or on the run), and manufacturers like Apple are training customers via commercials and advertisements about how to use all these apps to simplify their lives.

It might be easy to dismiss this trend given the relatively small percentage of people with iPhones or Droids today, but now is the time to start investigating and investing in individual strategies.

A: When I’m shopping at my local Kroger.

No, not the “Post” as in Raisin Bran; I’m referring to the physical post, or column, that is in the cereal aisle at my store.

The scene is this: my wife asks me to go get the Multi-Grain Cheerios so she can shop in peace for 10 minutes. She says, “Get the big box, unless the smaller box is on sale,” adding, “The Cheerios are close to the post about half-way down the aisle.”

If she wouldn’t have given me that navigational pointer, she probably would have bought herself 15 minutes of peace. The merchandise presentation in the cereal aisle is such a mess, so lacking in organization, I could easily have squandered more time, forced to scan every package, not finding what I was looking for. But since she gave me the post as my pole star, I managed to navigate past the lions and tigers and bears to the Cheerios. After a moment of anxiety while I scan the shelf for validation—Ta-dah!—I find the Mutli-Grain big box not on sale!

Contrast this with my second mission, during which my wife gets only a few minutes of peace.

While I spend my days understanding shopper behavior and applying rigorous research and analysis methods to help companies “grow categories,” I spend my weekends shopping like crazy. With my bank account being the victim of all of these great growth strategies! As you know, retailers and manufacturers are always finding new ways to create incremental growth or, simply put, make shoppers spend more.

One of my favorite places to shop is Target. Before I even make it into the store I have generally blown $20 on the dollar spot. After piling my cart with a bunch of stuff I really have no use for, my second stop is always the shampoo aisle. Regardless of need, I always stop. Something about the colors and the arrangement of the shampoo aisle just makes me feel so clean and orderly and I generally end up picking up something guaranteed to fix frizzy hair or give me more volume.

Well, much to my surprise, my venture into the shampoo aisle a few weeks ago yielded a fantastic new surprise! The new Pantene display! Aisle violators grabbed my attention as they organized the offering by color and hair solution. That’s right, hair solutions–easily found! And not only did the aisle violators frame up the offering, but the bottle packaging was new and perfectly coordinated with the signs. You can image my excitement as I quickly zeroed in on the “fine” solutions area. I left the aisle with a whole new system of hair care.

As I was finishing up payment at the pharmacy, a young male employee strolled into the area and struck up a conversation with the staff by saying, “That new Kotex packaging is sharp!” Silence. Then, apparently mistaking the silence as a request for clarification, he continued, “You know, the black packages? They are really cool looking!” More silence. Based on a quick survey of their expressions, everyone seemed to be thinking the same thing, What is an 18 year old guy doing talking about feminine hygiene products?!

Even as I grabbed my purchase and escaped the awkwardness, I began to contemplate what transpired. Given that I spend my days knee-deep in shopper sciences, I found the situation quite compelling. Good packaging should be, in part, disruptive, and the new U by Kotex packaging is definitely that. The sub-brand is unique in the category, both in shelf presentation and in the “get real” tone of the advertising. A+ on disruption.

Companies under pressure to stem margin erosion may jump headfirst into shopper marketing before they are ready. In doing so, they could overlook the need to solve fundamental problems in the shopping experience and end up with unpredictable results in the store.

The urge to dive in is understandably tempting. Brands that invest in shopper marketing are seeing three times the return as compared to traditional marketing disciplines. But the discussion revolves around a very small percentage of brands, such as CVS/pharmacy and Mars Snackfoods, ShopRite and Kellogg’s, Walgreens which just announced it will engage in a shopper marketing pilot with The Hershey Company, and of course the eminence of shopper marketing, Procter & Gamble. All have been working on shopper marketing for years and have an extremely high level of expertise.

Retailers looking for great examples of wirelessly connecting with their shoppers have three great brands to look to: American Eagle Outfitters, Netflix and Amazon.com. The continue to differentiate their shopping experiences with intimacy, responsiveness and relevance.

Even with millions of items for sale, Amazon connects intimately with customers, from its one-click ordering to its ability to become more relevant with each visit. The result is a “barrier to exit” that other brands envy.

American Eagle excels at aggressively integrating multi-channel marketing tactics into both its traditional and digital campaigns. It connects at all the right touchpoints, which goes a long way towards achieving brand loyalty. This year, AE included a mobile filed in its loyalty program, and used mobile as a point of entry into sweepstakes as well as an alerts program. Calls to action were posted on social networking sites, such as Facebook and Twitter in the form of banner ads, status updates and tweets.

While we can all agree that price matters more to the consumer than ever, it’s not the be-all, end-all of shopping. At some point, the hunt for best price has to stop. And why it stops is up to the retail brand.

Shoppers attach to brand, not price. Brand—the distinct way you do business—needs to provide a reason to activate the purchase, a reason beyond price. It can be trust, convenience, fun, effortlessness, time savings, fashion or many other factors a brand makes itself known for.

Many retailers have learned the hard way that price-based competition is simply not sustainable. To survive, they need a balanced value proposition unique to the brand that makes the shopper confident she has found the right choice among similar offerings of the product or solution she seeks.

This year, retailers have made headway in the battle against “sameness” by negotiating exclusive famous name brands, making sure their private labels stand for something besides “cheaper” and by infusing the shopping experience with emotional appeal. One brand that renewed its value-plus-reason image is Old Navy. After veering off into fast fashion inspired by the designer runway, it has returned to bright basic family apparel surrounded and supported by its kitschy sense of humor. Shoppers are returning to the store and business is on the upswing.

Recession or no, our research shows that shoppers enjoy finding something new in the store. It’s human nature. Whenever retailers bring energy and inspiration to the game—even when shoppers are thinking long and hard before opening their wallets—they still give the store credit for a better shopping experience. And from a better experience comes all

The past year has seen an explosion of interest in shopper marketing. Reportedly 60 percent of brands and retailers are investing in shopper marketing efforts, up from six percent previously. Most, however, admit to being in the learning stages of the emerging practice.
Finding a common language is the first challenge. The term encompasses in-store media,