Brands turn to power of retail as ultimate media

MARK RITSON
JULY 2, 2016
THE AUSTRALIAN
To Sydney and Tesla’s slightly surreal, impressive new store. I say “store” because the new location — which opened last Friday slap bang in the middle of the CBD in Martin Place — is referred to as such by Tesla’s executive team. The large glass panels opening on to a pedestrian walkway offer further evidence no one will be able to do the usual test drives, drive-aways and trade-ins there.
That’s because Tesla, which famously enjoys being entirely disruptive to the traditional mindset of the automotive industry, does not see the world the same way as Holden and Ford. More importantly, Tesla has realised something many brands missed during the recent industry spats about whether digital or “traditional” media offers the best marketing potential. Of all the media options available to brands, the single most powerful marketing medium is retail.
I say that because in the 20 years I’ve been working with brands I’ve seen or commissioned at least a dozen surveys examining which elements of the marketing mix most drive preference, purchase and loyalty. And the results, from different brands at different times, all tell you the same thing.
At the top of any list of marketing influences come service, visual merchandising and retail experience. Way above television, outdoor, Twitter and Facebook — the interaction and experience of retail is the biggest brand driver of all.
Too often in Australia we see retail simply as the place where the product is sold, rather than the ultimate — in every sense of the word — media. No matter where you stand on the debate about the power of digital over traditional media, both are blown away by the opportunity retail offers to present the brand in the perfect light and interact in real time with consumers.
Tesla is avoiding the term “dealership” as that’s not what its new retail location is designed to achieve. It’s not a place for a salesman to spring up and start the final sell. It’s the place where an entirely offline, immersive experience can occur in which consumers can explore and engage with the Tesla brand, product and people and move themselves down the purchase funnel from consideration to commitment at their own pace.
Retail stores, when done well, should be seen as the ultimate media for brand success. It’s hard in a 30-second film or a 140-word tweet to communicate what your brand is all about. But bring someone into your house, select every touchpoint carefully, immerse them in your story and magical results can be achieved.
Stores have other indirect advantages, too. They enable us to merchandise the product properly and show other retailers how it should be done. They often provide us with an all-important direct link to consumers in the form of store CRM systems and simple “walking the floor” approaches to customer observation. Perhaps, best of all, running a successful branded store suggests to third-party retailers that if they do not look after your brand in their locations, you have an alternative route to market.
For these reasons, we have seen a wide range of brands that would once have sold through wholesale channels embrace the idea of becoming their own retailer. Apple, of course, is the most notable. But everyone from Tag Heuer to Bonds to Kellogg’s has embraced the idea that retail can provide the ultimate media for brand communication.
Yes, you read that right, Kellogg’s. Tesla was not the only big brand to open a bold new retail presence last week. In New York, Kellogg’s opened its new Times Square location at 1600 Broadway. Celebrity chefs Christina Tosi and Anthony Rudolf will provide the Kellogg’s cafe with gourmet recipes. Customers can choose from a variety of breakfast cereal options priced between $US6.50 ($8.70) and $US7.50, and opt for either eat-in or takeaway service. Despite this enormous mark-up over grocery store prices, the profit margins for Kellogg’s restaurant will not cover its hyper-expensive Manhattan lease or the wages of its serving staff and luxury chefs.
But that’s not the point. Kellogg’s move into retail is about media not margins. With its brands suffering declining fortunes in the US, the cafe is an attempt to engage with customers and remind them how good its products are.
Whether it’s cornflakes or cars, the role of retail as the ultimate branded media could not be more clear.
Mark Ritson is an adjunct professor at Melbourne Business School