Category Archive for 'Retail Branding'

If you scanned the QR code on the promotional piece you received at the Fancy Food Show, you’ve come to the right place. Please review the slides below to see some of Goldforest’s brand-building work. It’s all based on strategy and backed by consumer research. Like what you see? We’re available to help juice your existing brands, create new ones, consult on strategy, or meet with your team to facilitate a day-long learning and brainstorming session.

Interested? Call Michael David Gold at 954-929-7790. If you’re still at the show and want to meet him face to face, call his cell at 305-984-9971.

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Breaking down categories by brand perception is one of my passions. It doesn’t matter how big or small your brand is, this kind of analysis never fails to provide competitive insight. Recently, I had a chance to take a brand snapshot of a playing field in the domestic beer sector. In addition to the bench-emptying kerfuffle among hundreds of individual labels, it turns out that conflict also lies at the place in the market spectrum where “mass” and “craft” beer categories reach out to each other.

Another passion is baseball, and since the new season is here, I hope you’ll forgive me for structuring this post as a metaphor to America’s game.

Setting the Playing Field
For the record, the domestic beer market is controlled by a very small number of America’s breweries. About 93% of US beer production comes from just 56 breweries (that’s 2% of all breweries). The other 7% comes from the 2,360 companies considered craft breweries by the Brewers Association, the trade organization of craft brewers. (www.brewersassociation.org, April 2013.)

Domestic beer consumption dropped 1% in 2011, while the craft sector grew 13% in volume! Not surprisingly, the trend was maddening (and terrifying) to the two percenters. In 2012, there were about 200,000,000 barrels (BBL) of domestic beer sold in the US. You figure the dollars foregone.

The volume below which a brewery, including all its labels, is considered by the Brewers Association to be a craft brewer is 6 million BBL annually. If you’re looking to hit a grand slam (the next Bud Light?), this isn’t the sector to target. It’s appealing enough, however, that the majors have stroked a series of singles and doubles in its direction, any one of which could potentially exceed the craft barrel limit.

Batter Up for the Bigs
Gambling that there might be a large demand for something that tastes like a craft, the big labels are pushing what are often referred to as “faux craft” beers, like AB InBev’s Shock Top, and from Miller Coors, Third Shift as well as Blue Moon Belgian Wheat. Working the free agent market, they’ve also bought actual craft breweries like Widmer Brothers, Redhook, Goose Island and Leinenkugel. Finally, although this master brand naming approach removes them from the craft beer conversation, beers like AB InBev’s Budweiser Black Crown and MillerCoors Molson XXX are super premium extensions of flagships.

Packaging for Shock Top, Blue Moon Belgian Wheat, Budweiser Black Crown, Third Shift

Faux Craft and Super Premium Packaging. Upscale, distinctive, and appealing.

The Brewers Association also takes the position that any label with more than 25% ownership by a major brewery is not a true craft beer. So AB InBev and MillerCoors can sell as much as they want, but they seem to have run up against a wall of perception regarding their craft legitimacy.

You’re Blind, Ump!
Hang on a gosh darned second. If it’s made like a craft and tastes like a craft, who says it isn’t a craft, barrel limits and ownership percentages be damned? That’s where an understanding of perception is involved. Managers who focus on numbers and fail to account for what ordinary people think about beer miss the boat.

It turns out that craft beer drinkers themselves care deeply about the distinction between mass-marketed beers and craft beers. They take pride in their ability to enjoy a wide range of tastes in limited production, often very local brews made with high quality hops, barley and other natural ingredients. In fact, and without the benefit of research that surely exists somewhere, I believe they control the public perception that this craft / non-craft construct is important. It seems to me that Americans accept the notion that, as with wineries, small makes better possible, while big means drinkable, reliable and reasonably priced.

The consultation that afforded me this sector snapshot was a review for market research firm Blueshift Research. A significant aspect was developing a POV, strictly from a brand perspective, on the infringement of faux crafts upon the traditional territory of Sam Adams brand labels. Sam is the most valuable craft in the sector (MVC?). The majors’ strategy must account first for him.

So let’s take a look at the brand identity issues involved.

Sam Adams brand extensions. The visual brand architecture is formalized.

Sam Adams, The King of Craft • 62 labels featured on web site (about 30 with formal Sam trade dress) • Brewed by The Boston Beer Co. • 3 million barrels (bbl) per year production • Respected among beer drinkers though some purists consider it “too big” • Founder and CEO Jim Koch is a fifth generation brewer

Scouting Report: Sam Adams’ Brand
Starting from scratch in the mid-1980’s, Sam Adams was the leader of the craft revival movement. Given its heritage in the craft brewing world, Sam’s is a pioneering brand identity, worthy of its historic New England namesake. It’s perceived as having integrity, courage and strength of character, in flavor as well as brand personality. Like the beers his great great grandfather and each successive male descendant in founder Jim Koch’s family brewed, it’s made with a craftsman’s touch. Sam Costs more than Bud, and an awfully lot of people buy it. Sam Adam’s brand identity seems well-matched to the craft beer sector.

Yet aspects of Sam’s identity resemble the national brands more than they do other crafts.

Its label hews to the principles of commercial graphic design, with consistent repetition of graphic icons, handsome and traditional typefaces, a helpful and attractive color palette, and more.

Craft Beer Labels

Craft Beer Branding. In contrast to Sam Adam’s more formal trade dress, many traditional crafts celebrate the uniqueness of their approach to brewing with highly expressive, sometimes even hand-drawn labels.

With a market cap over $2 Billion, the Boston Beer Co’s large scale (for a craft) affords it a more traditionally organized distribution system, including national coverage in multiple channels (liquor, supermarket, on tap, etc.)

It also provides a workable advertising budget (in 2010, about $30 million). It’s campaign effectively conveys Jim Koch’s obsession with taste and quality.

Sam gets the best of two worlds, the lucky boy! He’s found a sweet spot in the market that’s rooted in the craft sector, but delicately steps beyond it into the mainstream market without compromising its fundamentally “craft” identity.

On the Other Bench . . .
Threatening Sam’s prosperity, perhaps, is the emergence of faux crafts. What’s their brand identity? To true craft beer fans, the kind that care about the 6 million bbl size limitation, they’re not worthy. (See some reviews for Shock Top at beeradvocate.com.) But what about those on the rungs below, consumers who like a uniquely flavored, higher quality brew they can rely on for consistent satisfaction. How vulnerable is Sam in this area?

After all, real success for faux crafts depends on upgrading enough mainstream beer drinkers (of which there are tens of millions) to affect the bottom line, not stealing significant share from the smaller and more discerning craft sector. Early results are positive. In 2012, according to Nielsen (quoted here by food and beverage pundit Phil Lempert), the domestic super-premium segment generated sales of $2.1 Billion, with dollar growth of 29% year over year. That’s “just” a third less in dollar sales than the entire craft sector, which itself grew by 18% to $2.8 Billion.

I would argue that as long as the Boston Beer Co. plans to remain a true craft brewer, success for faux crafts is not a threat. The core markets are too different, as are the brand images. I think the bigger problem belongs to the makers of faux craft beers, which have to be perceived as superior to mainstream beers to earn price premiums. To communicate this, do they not have to reach out toward identity characteristics owned by the craft sector? Here’s a major source of their image problem. Authenticity is a critical brand element of most craft beers. Yet the majors do not even declare parenthood on their faux craft labels. A lot of people think that’s sneaky. And sneaky is the opposite of authentic.

Blue Moon and Shock Top "Faux" Craft Labels

Faux Craft Labels. These labels are craft-like, albeit slicker looking than is typical in the sector, suggesting distinct character and personality. Neither one declares its connection to the world's larges brewers.

A Look at the Telestrator
These charts provide a graphical summary of my point of view. Plotting perceived “craftiness” against sales volume, the dogleg shape of the distribution is clear. High quality and distinctiveness has been a niche market play. Craft manufacturers like Boston Beer Company might push outward toward the area of opportunity (the green rectangle), but if they remain true to their identity, they won’t exceed the craft manufacturing limit. Major brewers, on the other hand, not encumbered by the Brewers Association’s guild-like distinctions, are trying to approach the opportunity as well.
"Craftiness" of Craft Beer vs. Sales Volumes by Beer Label

Perceived Beer "Craftiness" vs. Sales Volumes in BBL (by label). There are hundreds (even thousands) of low volume but very crafty beers, dozens of low-to-moderate volume and non-crafty ones (the amorphous purple shape), and a few very large brands. The latter dominate mass market mind-share. Craftiness ratings are the author's. Volumes are approximated based on various published sources.

When Craftiness is plotted versus the size of the parent brewery, the market perception gap is even more apparent. As long as craft beer lovers prefer attributes like small and local, the majors will have difficulty luring them, no matter how craftily their beers are brewed.

Perceived Beer Craftiness vs. Sales Volume by Parent Brewer in BBL

Perceived Beer "Craftiness" vs. Parent Brewer Sales Volumes in BBL. The Perception Gap. (The size of each square represents sales volume by that specific label.)

Respecting Your Legacy

As a corollary, if The Boston Beer Co. is to remain true to it’s own brand, it won’t care about the success of faux crafts. An awakened taste in quality beers, and a continued migration upward toward “real” craft beers should be good for them and the craft sector as a whole. Also, the company is pursuing alternative beverage categories for now (hard tea and cider), a strategy that carries diversification value as well as the possibility of continued growth without compromising BBC’s craft brewery status.

The best news for crafts in general, at least those whose managers care more about quality than market domination, is that if they stick to their core identities, there appears to be plenty of room for continued growth, even in an economy that is still in recovery.

The Wrap
In EVERY category, brand identity analysis is a big league tool you can use to size up the competition. It’s not enough to know the current stats: sales, penetration, promotional spending. You have to establish a context for evaluating potential. I’ve written elsewhere about the fundamentals of brand identity (for example here and here), but the bottom line is that every brand has an essence that carries valuable genetic information about the strategies and tactics it can pursue to fulfill its destiny, as well as those it must avoid. If you understand the brands, you’re half-way home!

What are your thoughts on this line of thinking? If you’re in the brewing sector and have a take on the category, please chime in. And if you’re in another sector, do you see how these principles apply in your case too?

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In post one and post two of this three-part series, I talked about ways that smaller chains of supermarkets can compete effectively with the large chains, mass merchandisers and club stores that dominate the supermarket channel. And I began to describe some of the marketing and brand related aspects of store operations that smaller operators can use to build customer loyalty and increase bottom line profits.

In this final post, I’ll review three more ways you can get the jump on your competition and draw some useful conclusions for your consideration.

Web Site
Like it or not, the Internet has changed the world. A well-designed Web site that engages, informs and assists your customers is no longer an option. Properly conceived, it can become the hub of your store’s brand communications. While that’s a long term consideration, it can also support your ongoing sale and promotion efforts.

Nino Salvaggio International Marketplace home page

www.ninosalvaggio.com (designed by Goldforest) is a comprehensive Web site offering interactivity and an opportunity to build an online community.

Too many small markets have outdated and largely irrelevant Web strategies. But the truth is that huge numbers of consumers have learned to use the Web to improve their efficiency, shop more intelligently, communicate with their retailers, communicate about their retailers, and deepen their ties to trusted brands like yours. And because the Internet enables engagement within communities, it’s especially suited to the branding needs of local businesses.

But don’t kid yourself. Building a Website with customer relevance takes strong internal will and commitment. Planning and execution are both involved phases. You’ll need a Web development partner who’s demonstrated ability in both areas and you’ll need to follow their lead to get good results. One retailer we’ve worked with scaled back other advertising and marketing efforts for a year to free up the resources to pay for the effort. Remember, a Web site is a long term investment that will pay dividends and leverage the value of your other marketing dollars as time goes on. So if you’re going to do it, do it right!

E-mail Marketing
Once your Web site is up and running, you can leverage your online presence with an ongoing e-mail program targeting your regular customers. It’s the 21st century equivalent of the store circular, only far less expensive and with greater functionality.

Each e-mail can publicize your special offers. But it can also provide links to different pages of your Web site: special recipes, blog posts (if you’re blogging), upcoming events, community happenings, and more!

E-mail Marketing ties into Web page design

This e-mail template for Nino Salvaggio (designed by Goldforest) dovetails with the Web site shown above, offering a seamless online brand experience to the customer.

There are many good ways to build a list of e-mail addresses. And there are companies that specialize in managing e-mail distribution. But the truth is that there are also very inexpensive online programs you can administer yourself once you’ve designed your e-blast template. Constant Contact and Emma are just a couple that come to mind. (This e-mail reached you by virtue of Constant Contact software.)

Trend Watching
Today health, simplicity, eco-consciousness and time constraints are very significant factors in consumer behavior. Have you done anything lately to show you’re in sync with their concerns?  Could you add or develop an in store expert on wellness? What have you done to improve the checkout experience? Have you taken simple steps to make your business more green?

One way to start is to develop conversations with customers. Ask them what’s important to them and how you can make your store more valuable to them. Reward them for making suggestions. Reward employees for engaging customers and soliciting feedback. Any time you implement something that addresses a concern or issue shared by a significant portion of your customers, publicize it in your advertising and in-store communications. You’ll strengthen your customers’ trust and deepen the bonds your store’s brand enjoys.

Why Wait?

The only thing certain is change. Sometimes it’s forced upon us. Sometimes we can act purposefully. The economy is currently in flux. Fortunately, it hasn’t been as bad a ride for most supermarket operators as for other businesses. But your competition isn’t sleeping. Fundamental changes in store strategy are taking place at all levels. If the ideas discussed here makes sense, maybe they’re worth your consideration. The market that plans ahead with a good understanding of its alternatives has a great opportunity to solidify and grow its market position. A brand communications expert who’s worked with businesses like yours can help you explore the options.

What do you think of the ideas I’ve proposed? Feel free to use the comment box below to state your view or start a conversation!

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In the initial post of this three-part series, I wrote that smaller chains of supermarkets have inherent advantages in their competition with large chains, mass merchandisers and club stores that dominate the supermarket channel. And I began to describe some of the marketing and brand related aspects of store operations that smaller operators can use to build customer loyalty and increase bottom line profits. In this second post, I’ll continue with several more.

Private Label
The typical large supermarket chain does about 20% of its unit sales in private label product. Consumers are far more accepting of private labels as alternatives to national brands than they were even 10 years ago. If you’re not offering them this option, you are missing out on a tremendous opportunity not only to provide a significant lift in gross margin, but also to make your stores into destinations for unique products.

Haggen Market Private Label Product Assortment
Haggen operates a chain of 16 stores in Washington State, and maintains a handful of private labels. Shown here is a nice assortment of products under their store banner brand. (photo courtesy www.haggen.com)

There exists a large and well-developed infrastructure of contract manufacturers and packagers that can help you create pieces of your private label line. If you don’t already have a private label program, you may be surprised at the reasonable volumes needed to build an effective program.

Gone are the days when private label uniformly meant knocking off strong national brands with broad assortments of look-alike product packages. The trick is to develop a brand that sends the right message about your store and addresses your particular clientele’s sweet spots. A package design firm with a strong knowledge of private label strategy can help you navigate this course. Beware the trap of letting your suppliers design labels for you. If you do, you’ll probably end up with a hodgepodge, not a brand. Successful private label strategies require consistency in execution and strong central oversight.

It’s true that larger banners carry multiple private label brands at different price/quality points. Some of them even address niches like organic or environmentally friendly. But you don’t need to be that sophisticated to gain from a private label program. Smartly rendered, even a narrow assortment of private label products can help you compete more effectively in this rough and tumble market.

Ethnicity
Many small chains started out serving ethnic communities. If this describes your store, you probably still possess a strategic focus that comes from your roots, even if your market has grown and evolved over the years. And because you do not serve a mass market, you can afford to carry specialty products that your larger competitors cannot “waste” shelf space on. Cultivating a specialty assortment and communicating effectively about it are tactics that larger stores simply cannot adopt. If you’re not taking advantage of this advantage, you’re missing out.

Pro Ranch Kitchen - Ethnic Positoning
No matter how diverse your customer base has grown, acknowledging the ethnic roots of your marketplace is a great way to differentiate from larger competitors. (photo courtesy www.prosranch.com)

You should regularly promote this assortment, and call special attention to it at appropriate seasonal, religious or patriotic opportunities. Always feature some of these items in your circulars, perhaps in a section especially designed for this purpose. If you’re using e-mail marketing (and if not, you certainly should be looking into it  - more on this in part 3 of this post), be sure to do the same thing there.

Are you taking suggestions from customers on ways to expand this assortment? Are you making a big deal of additions to it? The profitable answer is “yes.”

Limited Offer Products and Promotions
Another advantage you have is flexibility in your planograms. That means a couple of things.

First, your regular assortment can more readily reflect the shopping preferences of your neighborhoods.

Second, you can work out advantageous deals on smaller deliveries from local or seasonal vendors that larger stores have a hard time dealing with. Shoppers love a find. Why shouldn’t your market become a place where pleasant surprises are the norm? Come up with a name for these programs and post shelf hangars or special signage to call attention to them throughout the store.

In the final post of this three-part series, I’ll talk about three additional ways you can achieve a marketing advantage for your supermarket chain, and I’ll draw some useful conclusions for your consideration.

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If you operate a small chain of supermarkets, it’s a retail jungle out there. Competing against big boxes, club stores, and large multi-store supermarket chains might seem like storming Omaha beach with a dinghy.

These large competitors have the resources to out gun you on just about everything: price, promotion, advertising, assortment, technology, marketing analysis, loyalty programming. You name it, they got it.

Kuhn's operates a chain of nine markets in Pennsylvania. (photo courtesy www.kuhnsmarket.com)

But the small supermarket chain, 5, 12, 50 stores, still exists because it fills a market niche. If you’re an operator of one of these chains, your number one marketing job is to understand the role you play in the marketplace, to grasp the value you provide your loyal customers. Only then can you deepen the bonds you already enjoy, and discover how to convert other shoppers into fans.

In this three-part post, I’ll touch on a number of key marketing dimensions you can explore to compete effectively against larger competitors. And I’ll describe how, surprisingly, there are some areas where you actually have the upper hand over them, if you choose to take advantage of your ability to position and differentiate your brand.

What’s a Brand?
A brand is a promise that exists between a retailer and its customers. It’s a guarantee not necessarily of excellence or leadership, but of consistency in price, service, product selection, cleanliness, return policy, store hours and a thousand other qualities that define who you are in the marketplace. You can’t tell your customers what your brand is; they figure that out all by themselves based on their own experiences in your stores.

A brand image is a shared phenomenon. At my firm, Goldforest, we say that a brand exists only after people begin to have similar ideas about what the store is all about. Your job, as a retail marketer, is to reinforce positive perceptions of the store’s brand image and reduce, to the extent practical, any negative perceptions.

Now, on to the main issue: how to compete against the Goliaths in your market area.

Home is a Sweet Spot
As a small chain, your number one advantage is location. While some of your stores may be destinations that people will plan a trip around, most are strategically located in the neighborhoods where your shoppers, some of whom are transport challenged, live and/or work. They count on you for staples. You know many of their faces and even some names. You, your store and your staff are reliable touchpoints for them week after week, year after year. And while price is important, it’s not the number one driver of shopper loyalty. Another way to read the last sentence is this: your store banner is a trusted brand!

Fresh & Easy Check Presentation

Participation in local charities cements the relationship of local markets to their communities. (photo courtesy www.freshandeasy.com)

Maintaining in-stock conditions, stable prices, and a clean, safe and friendly environment is critical to retaining your customers’ loyalty and trust. This is the bedrock of your operating policy.

Apples

Local branding is all about the home town you share with your customers. Local values. Local vendors. Local stories. (Photo credit: aplysia_06 Flickr)

But location is about more than just convenience. Your company is more firmly rooted in your community than a large regional or national chain. Your management and staff care much more deeply about important local matters, charities and employers. You probably source a greater percentage of your products locally too, and more of your profits stay in the community; both of these factors help support the local economy.

These elements can be incorporated into your in-store communications – flyers, posters, shelf hangers, etc. – in a creative and emotional way. If you advertise, you can build a campaign around them. These are issues people care about. To ignore them is to miss out on a key leverage point.

Store Heritage
I’m always fascinated by the stories behind successful local businesses. Often a well-known and respected family is involved. Sometimes there is a reputation for civic involvement. And anecdotes that root the business in historically significant periods. All of these are (or can become) a meaningful and very positive piece of the brand image the store maintains.

Small Grocery Heritage Image

Vintage photos tell great stories and can help root the store in the community.

Making this history available on the Internet is fairly common. Reaching into it for promotional purposes is harder but can be very effective. An annual birthday sale, for example, could give your business an opportunity to tell its story. Highlighting heritage connections to current management can be accomplished through in store signage. Advertising that harkens back to an earlier time can be a refreshing change of pace.

A communications agency that understands the importance of “story” in brand messaging can work with you to suggest creative ways of making your store heritage pay dividends in shopper loyalty and bottom line profit.

In the next post, I’ll explore three more dimensions you can use in your marketing efforts to compete effectively against the big boys in your neighborhood. All of them are based on your strengths as a smaller local competitor that you may not have realized you had at your disposal.

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