Retailer mediation

At the last APG Noisy Thinking on defining the twenty-first century brand, Nick Kendall revisited Stephen King’s 1971 paper ‘What is a Brand?’.

Stephen King, 1971

I think King’s paper is great for several reasons - not least because of the truth in his famous analogy that ‘people choose their brands as they choose their friends’. I think his definition of a brand is particularly strong because it’s firmly rooted in a business context; specifically, in the relationship that brands have with shoppers and retailers.

45 years ago, he argued that a brand can be partially defined by its role in disintermediating retailers by creating a preference amongst shoppers for that brand before the point of purchase.

This concept of disintermediation really resonated with me. King was referring to the way brands first used advertising to generate demand, but modern brands are increasingly sophisticated in the way they vie to reduce the power of the middle man. On reflection, some of the most successful twenty-first century brands and platforms have their DNA synthesised in the idea.

Take Uber for example. This is a perfect example of a hugely successful app-based business whose model is based on disintermediating third parties. Uber links shoppers directly to a service, cutting out all the other middle men traditionally taking a share of the profit.

Our contemporary digital landscape provides more opportunity than ever for brands to cut out the middle man and build direct relationships with shoppers.

On the other side of it, this same landscape has proved fertile ground for those looking to specialise in retailer intermediation.

Take MySupermarket for example. MySupermarket’s platform empowers shoppers by showing them where they can save money with their preferred grocer by switching brands or product formats on their shopping lists.

Platforms like MySupermarket are disarming retailers by stripping away promotional techniques that have traditionally helped them shape buying behaviour.

Consider the traditional in-store shopper journey. During a visit to a supermarket, we will be interrupted several times by brands’ off-fixture Point of Sale promoting discounts and multibuys.

When we see a branded laundry detergent on offer, we won’t go to aisle, cross-reference prices against the brand on promotion, and then make a decision. We choose what seems like a good deal on a brand we have a preference for, or a cheaper own label alternative that we might not have chosen if we were able to easily compare price. MySupermarket arms shoppers with that information, making it easy for them to compare prices of like-for-like products instantly.

The e-commerce experience can be much the same for grocery shoppers. Some retailer.com sites offer a similarly opaque user experience when it comes to price comparison. It’s often difficult for shoppers to clearly compare products. Categories and aisle/shelf level navigation are engineered to get shoppers to buy what the retailer wants.

This may be stating the obvious, but the fact is that increasing numbers of price sensitive online shoppers are switching, and will continue to switch to platforms like MySupermarket.

I think the fundamental reason for this is because platforms like this empower consumers by simplifying shopping.

This poses a threat to retailers’ bottom line as it cuts basket spend, but more interestingly it represents a fresh challenge to established brands because it’s never been easier for shoppers to calculate how much they can save by switching to own label.

In that sense, it’s just as paramount (and more challenging) for twenty-first century marketers to build strong brands as it was when Stephen King defined a brand.

I believe that the traditional values that sit behind a strong brand (must be unique, must avoid me-tooism, must have a strong personality) won’t be enough for brands to succeed in the twenty-first century.

The brands (and retailers) that will win our hearts, minds and cash are those that are building trust through being transparent and genuinely striving to make shoppers’ lives easier.

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