No other major retailer has an equivalent role to that created by Sainsbury’s.  Innovation in business is the way to success and as Business Consultants feel that more businesses should take note.  However, that doesn’t mean ‘bolting’ on the HR piece to a role that focuses on the customer.  For real business benefit this focus needs to be truly integrated into the responsibilities and, more importantly, accountabilities of the role.  It might be as simple as developing a programme of Helping Managers to Manage or looking at the culture of the company – listening to what employees have to say through climate surveys can have an incredible impact on employee engagement and motivation.  If employees truly feel valued, listened to and part of the business then their resultant relationship with customers will be optimised and enhanced.

But, at Retail Remedy we wonder whether companies should think about the cost of not thinking about “people” in the rounded context of business.  In the current climate many businesses who have an excellent blueprint are failing.  The product and price may be excellent, location a plus but without the people element being effectively addressed it can mean the difference between survival, coupled with potential future growth and shutting up shop.

Whilst it may be about viewing figures for the mainstream channels, Mary Queen of Shops and Ramsey’s Kitchen Nightmares have both shown that without the right people with the right knowledge, skills and attitude, failure isn’t too far away.

So whichever viewpoint you favor, companies ignore the value of managing and developing people and employee engagement at their peril.

Getting off the drug of promotions should be led by those with a sincere EDLP (Every Day Low Price) retail strategy, but the truth is the likes of Asda (and to a lesser degree Tesco) have abandoned their EDLP stance to stop Morrisons and JS becoming the exciting places to shop.  Reducing cost and easing operation through EDLP retail strategies may make great sense but it is not sexy to suppliers or customers.  Asda’s price perception is ahead of the pack and looking at its action alley it communicates value the clearest, although it does suffer at times from inconsistent retail standards and end displays that are mixed in their individual sku value and with inevitable trading floor changes this position is likely to continue.

When Retail-Remedy reviewed the promotional execution of the big 4, our observations were that if Morrisons could communicate their deals as powerfully as Asda, both on ends and down the aisles they would improve sales and price perception. They might have execution right, but it is executing mixed messages on price and deals that can be confusing to customers. Our instinct is that Richard Hodgson will bring improved promotional communication to Morrisons. We believe that the improved communication methods we expect to be implemented at Morrisons will reward those suppliers who can deliver a full end offer that hangs together on product relationship and deal type.

It looks like the promotional battle will intensify rather than recede. Where does this leave EDLP retail strategies?  On the back-burner until a brave retailer can break the cycle of promotional promiscuity, the Asda Price Challenge was such an attempt but their promotional strategy has not abated suggesting a half hearted effort.

More and more, consumers look to the brand and its brand values for reassurance as to quality, security and value for money. Consumer spending will focus on ‘reason to buy’, not ‘impulse to buy’. The brand is the key element in the purchasing decision.

Brand awareness is desperately important but it’s not the whole story – in the States, everyone knows General Motors, trouble is no-one is buying their cars! Consumers are responding to brand differentiation – attaching meaning and value to the brand to increase its weight in the purchasing decision. Brands need to stand for something; they cannot afford to be vague in their offer. Developing brand differentiation is the key to improving long-term sales growth and customer advocacy.

So, Phil, how do we achieve brand differentiation?

The landscape for any brand tends to be misted over with a cloud of generic features claimed and owned by all players. To rise above this cloud means convincing the consumer that you are different from the crowd, that your offering is the one to meet their requirement or their hopes.

You can’t just add statements of value to your marketing – if you make any statement about your offering, they have to be believable and authentic. Consumers are becoming ever more sophisticated and see through insincere claims and inappropriate endorsements. Any retail strategy has to be built on recognising that consumer engagement only comes with authenticity – and engagement is the key to sales. Brand building is a precious endeavour and Companies need to ensure that nobody in the organisation delivers less than the brand values, consistent delivery is essential.

If that’s the case, how do we deliver ‘authenticity’?

Do you mean ‘we’ as in retailers or retail consultants? Be specific about what you deliver and make sure all the people in your organisation support this 100%. The amount of web-sites now offering no differentiation between one retailer and another suggest everybody is playing too safe and there is definitely space for some bolder claims.

New technology is now not only the product, it is the medium as well! The online experience is less and less under the control of retailers or corporations, the market now exists as a series of communities. Social networking, Ebay, business networks all present massive opportunities – especially if you can gain endorsement from the community itself, recommending the brand. Ignoring or misusing these markets and the way they operate cuts off the blood supply to the brand. Twitter users will spend more money on the internet than non-users. We (now I really mean retail consultants!) need to show retailers how to integrate this customer orientation into every aspect of brand building and customer care – then we can strengthen and lead brands into the future.

So, how should Retail Marketeers respond to these challenges?

Retailers need to deliver on three main areas in order to capitalise on the changes that the internet offers:

• How clear is the brand differentiation and how consistent is this delivered? What is the brand promise?
• What platform is most effective to your current and future customers?
• How does the brand promise get delivered in the real world and what is the buy-in from the front line customer service staff?

I would urge retailers to be bold, get buy-in and build a brand that stands out to your customers!

As consumers become more restrictive on what and how they spend.  Retailers, who invest in their brand through a recessionary period, have the opportunity to profit whilst others fail.  It has been proved time and again that a strong brand is the most important asset a company has when recession strikes.  In fact, retailers with strong brands can profit from recessions, as lesser companies turn inwards and fail to spend.

Look at Intel!  Intel’s famous campaign, using the ‘Intel Inside’ slogan and labelling, began in July, 1991, right in the middle of the recession. That did more for Intel’s branding than any single campaign before or since. They weren’t the only ones, and success at that time came to those with the balls and the acumen to do it. The same will be true of this current recession.

Harvard Business School professor John Quelch, writing in The Financial Times, says: “Instead of cutting the market research budget, you need to know more than ever how consumers are redefining value and responding to the recession.” Quelch also points out: “It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.”

When it comes to branding through the downturn the key to success is in maintaining focus;

1. Continue to deliver a positive brand image within your sector

2. Maintain or increase your brand visibility within the market place

3. Communicate brand stability to your existing audience

4. What are the opportunities to share your risk with brand partners

The following points may be obvious to most retailers, but reflecting on them is always of value;

1. What are your customers looking at your brand to deliver for them at this specific point in time?

2. What is your completion doing and are you in a position to anticipate what they will do next?

3. What emphasise are you placing on your core proposition and its value to your customer?

4. Are you maintaining the quality of your products and services?

5. Are you keeping your customer base engaged

We all need to make the most of every dollar spent in supporting our brand through this challenging period, but also have to consider that without effectively communication we simply become another brand on another shelf!

Marks & Spencer’s UK sales have dropped by 1.7%, whilst its overall sales grew by 0.4%, thanks to the 25.9% increase in international sales.  Last year, the adjusted profit before tax was £1.09bn whilst this year’s results see a drop to £768.9m.

The Board has taken the last six months to review the business and layout its long term strategy.  Ian Dyson has been entrusted with the responsibility of leading the ‘2020-Doing the Right Thing’ change program, which is set to refocus the Company’s brand communication, accelerate change, focus on international expansion and multi-channel development.

As the Group’s final dividend for 2008/09 has been reduced to 9.5p, how long does Dyson and Sir Stuart Rose really have to deliver a positive step change that their customers will respond too?