Strong retail brands, social awareness sway today's shoppers

Drug Store News, June 17, 2002

With many food, drug and mass retailers focusing the bulk of their advertising on low prices, has this tunnel-focus created an opportunity for the savvy retail marketers to differentiate their chains by branding the store?

Yes, say many leading marketing consultants and industry analysts, who noted that since Sept. 11 consumers have become much more judgmental about the companies they patronize. As a result, what's being sold and how it's being sold may play a lesser role in determining consumers' store preference in the future.

The retailers that tap into this phenomenon understand that they must "create a brand that resonates with the consumer--emotional and rational reasons for being the shopper's store of choice," noted Michael Sansolo, a senior vice president of research, education and emerging technologies at Food Marketing Institute. FMI's recent research effort, "New Directions in Advertising: Marketing the Retail Store as a Brand," found that "keen competition in the industry suggests that a strong retail brand image is a key factor for success."

Positioning the store as a brand--through marketing efforts that go beyond the basic concepts of price, convenience and assortment--pulls consumers into the store, the FMI report noted. This kind of positioning, however, requires a top-to-bottom organizational commitment, an emphasis on distinct departments and/or services (i.e. diabetes care) and the brand image must extend into the physical look and feel of the interior space of the store, the EMI report found. Each visit to the store can add to the brand equity.

In addition, recent research has shown that since Sept. 11 consumers are much more inclined "to respond favorably to companies that identify with social causes." This cause-related marketing "can also have beneficial effects on employees as well as customers," according to the Cone/Roper Corporate Citizenship Study.

The study, conducted nationally before and after Sept. 11, uncovered a "major shift in Americans' attitudes" toward the role companies should play in society.

"Corporate citizenship should now become a critical component of business planning as Americans are promising increased support for companies that share their values and take action," noted Carol Cone, chief executive officer of Boston-based Cone.

In the citizenship study, the number of Americans who said a company's commitment to certain causes was important to their decision on whether these companies located in their communities jumped from 58 percent o 80 percent after Sept. 11.

Employees also are interested in whether their companies play an active role in supporting social needs. Indeed, 83 percent of Americans said it was more important than ever for the companies they work for to support the needs of society.

Americans will take action to reward good corporate citizens

                                Post-September       Pre-September
                              11th (October 2001)  11th (March 2001)

I am likely to switch brans,
 when price and quality are
 equal, to support a cause            81%                 54%
A company's commitment to
 causes is important when I
 decide what to buy or where
 to shop                              77%                 52%

Note: Table made from bar graph