How do Brands survive in our ever changing Market?

In the past decade the trend of retailer involvement in both related and unrelated diversification was found successful. Consumer goods manufacturers such as Nestle, Unilever and Procter & Gamble are particularly recognized for diversifying their operations increasing their product portfolios by mergers and acquisitions. This has allowed them to further build their position globally and achieve stronger brand equity. Moreover, due to their large size, these consumer goods manufacturers have been able to acquire economies of scale, enabling them to pursue further growth.

Customers always change and the growth of technological advancements forces retailers to react to these changes. Currently the world of retail is changing due to ten recognisable trends:

The first trend being “opposites attract”. This trend is the explanation to why the retailing industry is becoming polarised, meaning that retailers either focus on value or luxury. Retailers who focus on value serve the low-end markets and those who focus on luxury serve to the high-end markets. Those who serve the middle market stagnate because they do not have clear differentiation, we could see this happening particularly during the GFC.

The second trend is the fact that more and more retailers such as Carrefour, Walmart, Tesco and Costco are pursuing global markets, particularly caused by the increase in coverage and decrease in costs of information and communication technologies.

The third trend is the anti-big perspective, it is when retailers diversify or concentrate to niche but profitable markets. Retailers such as Cotton On Kids and Gap Kids have expanded their offering to special children-wear and Pumpkin Patch has been found profitable in their business with $14.5 million net profit in 2009.

This trend is highly applicable to brands like Zara, Primark, TopShop and Forever21 that have been found successful in fulfilling the demand through “Fast Fashion” schemes that emphasize on the notion of “buy it now or regret it later”.

Consumers nowadays also look for “Greentailers”, retailers who show concern to the environment and care more to the society. An example would be Marks & Spencer in which they suggest their products to be washed at cold temperature provide parking for “green” cars and use LED lighting within their stores.

The fifth trend is what Banks and Airlines have been doing for years; acknowledging that Service Sells. Apple’s approach is a good example for this because within their stores they let customers try their products in order for them to build attachments and the staffs are always there for any enquiries. Another example is the American Girl Place in Chicago (US) where they sell a different kind of emotional experience with dolls to young girls.

The next tendency is that Shift happens and nowadays the trend is on technology. Consumers are getting more mobile and connected, thus retailers have also expanded to reach these customers through mobile retail. In Australia for example, more people are connected to the internet on their mobile phones than people in their houses.

The eighth trend is “brand-tailing”, or the movement of manufacturers becoming retailers. Examples are Apple and Nokia with stores to try out their products first before purchase, and also Nespresso with their coffee shops all around or cities (it doesn’t matter where you live really, you have probably seen these).

The ninth trend is having stores as the stage. Retailers now build their brand image by making more use of their stores to directly communicate with customers to provide them an experience that will be implanted within and could make the customers come back to the stores. Examples would be Abercrombie and Fitch and Ann Summers.

And last but definitely not least... in fact, probably the most influential of all trends goes along with the fact that customers like to be different and often seek personalisation. An example being Adidas with their MiAdidas and Nike’s copy, NikeID to serve these customers with the personalisation option of having their name stitched to their soccer shoes.

You can notice this trend even on your iPad or iPhone (which are some of the most customizable products available on their respective industries) which have highly benefited from little things like allowing their customers to carve their names behind their device or creating different accessories that change the colour or shape of your device.

All these trends clearly indicate that we are headed for a new era in marketing, the era of customer-based branding. There is an old saying that tells “the customer is always right”, but in today’s globalized world, the customer has never been “righter”.

With today’s customer activism and the ease and low cost of information sharing, brands either start adapting to their customers’ needs and expectations and start listening to the trends of the market, or start packing for oblivion.