It’s no secret that the retail industry is highly competitive. Consumers are spoilt for choice when it comes to options, making it notoriously difficult for brands to stand out. A challenge that has become even more difficult in our current economic climate.
Our latest Tracksuit data reveals Aussie consumers are tightening the purse string across the board to keep pace with cost of living pressures. The retail industry hasn’t been immune to this. In fact, it’s the sector where consumers are reining in their spending the most – meaning brand campaigns that were effective twelve months ago, may not resonate now.
According to our data, the top three areas where Aussies are reducing their spend are groceries (65 per cent), eating out (60 per cent), and clothing, footwear and accessories (50 per cent). Those aged 18-34 are most likely to cut back across all three categories.
Of those cutting back on groceries, half are opting for cheaper grocery alternatives while 47 per cent have reduced the amount they buy. In the case of clothing, footwear and accessories, a third have reduced how often they buy or pay for items, half have reduced the amount they buy and 29 per cent are choosing cheaper brands.
Against this backdrop, retailers need to be able to effectively leverage their brand to make sure their product is ending up in shoppers’ baskets, not their competitors. So, how do you build a strong identity that captures and retains consumers? Here are some essential tips.
Build strong brand awareness
For any retailer, brand identity and reputation play an integral part in success. Enhancing consumer perceptions of your brand, not only results in higher levels of awareness but also customer loyalty and sales.
Awareness is the first rung on the ladder to fostering long-term loyalty. People are much more likely to buy from brands they’re familiar with and feel positively about. Careful, consistent brand management is what puts you top of mind for consumers when they’re ready to purchase (we call this brand salience) – not paid ads or outlandish SEO hacks.
Adopt a consumer centric approach
The backbone of any successful brand strategy is getting really clear on your target customer. This is particularly true in today’s economic environment where we’re all more mindful of our purchasing choices. Does your brand understand the needs and desires of your consumer base? More importantly, does your brand positioning align with those?
To answer these questions, start out by building a consumer persona that explores the group’s behaviours and attitudes. Explore their spending habits, what their preferred shops are, where they spend their down time, what they watch or what they listen to. You should also understand their demographics like where they are from, their age, income, education level.
Use these insights to better understand your customer’s journey and what makes them tick. More importantly, ensure your brand’s messaging and communications is adaptable and can be updated to reflect the sensitivities of changing economic environments. When times are tough for customers, be empathetic. If a brand doesn’t have an emotional pull, why should consumers care about it?
Compete using brand, rather than price
Having a strong brand is an important defence strategy when operating in a competitive market. Especially if you are trying to compete with cheaper label products who have the appeal of lower price points. Maintaining a strong brand positioning and amplifying your brand’s unique selling point can give you more pricing power – helping to maintain demand for your products if reducing cost is not an option.
What better way to stand out than to shout about what makes you different. Understanding your position in the market is the first step in shaping a strong brand voice. What are your points of parity? What are your points of differentiation?
Find innovative and unique ways to share the quirks that differentiate your brand from competitors. Use emotion-centric branding to tell the world why you’re different (or better)! Be distinctive and stay consistent.
Track your brand health
Perhaps the most critical aspect of navigating an evolving landscape is to track brand metrics to see how these tactics are working. Capture how your customers think and feel about your business to understand whether or not your brand is actually building awareness and consideration with the right people. In other words, how ‘healthy’ is your brand?
Monitoring your brand health is best practice to grow future demand and position yourself as a market leader. It allows businesses to unlock insights and turn them into actionable metrics that inform successful advertising and marketing strategies.
By laying these brand foundations and actively tracking performance, retailers can weather the inevitable peaks and troughs in the economic calendar, setting themselves up for long-term profitability and success.
Connor Archbold is co-CEO and co-founder of Tracksuit.