This week, founder of Mailcloud and Zaggora.com Malcolm Bell looks back at UK retailer Christmas trading results and asks – what makes some retailers perform well, and some deliver less than sparkling results? Malcolm’s verdict? Brand strength and remarkability. But what makes a brand strong, and remarkable?
Retailer’s make 90% of their profits at Christmas. In a hyper connected world, every year gets more manic – with retailer’s fighting it out for your hearts, minds and wallets. It’s like Santa’s now on coke.
But, there are always winners and losers. At the time of writing, results were starting to come in from retailers reporting their Christmas trading over here in the UK. Debenhams issued a profit warning, whereas John Lewis and House of Fraser reported much better than expected sales.
For those of you not in the UK, all three are high street department store chains, with Debenhams (172 stores) and House of Fraser (60 stores) in the mid-market, with John Lewis more premium (43 stores).
So, what’s the difference? Why did John Lewis and House of Fraser do well, and Debenhams do badly? My answer, brand strength and remarkability.
There were a few possible reasons, so I looked at them in turn.
1. Customer service and accessibility
You could argue, retailers with great customer service do well, and those with bad customer service do badly. I looked at the Facebook page of Debenhams (issued a profit warning) and it wasn’t pretty. At least 10 out of the first 15 posts from fans complaining about customer service.
But then I looked at John Lewis (good trading results), who have a reputation for being super nice to customers. But they also had lots of complaints. So, you argue that both suck at customer service, or, more likely, it tells us people love to vent their frustrations (publicly) on Facebook.
So no real difference here.
2. Product quality
You could argue that John Lewis and House of Fraser sell better quality products than Debenhams, so customers are more likely to shop with them. Not really Malcolm, this was a silly idea. A walk around Debenhams Oxford Street is enough to make it clear they don’t sell crap. if they did, they wouldn’t really be in business would they? Onto the next one.
3. Market positioning
Debenhams, being lower end of the market price points, should do better in an environment where we are told daily that consumers don’t have as much money to spend, prices rising but wages aren’t etc. However, they did poorly when compared to the others, which are more mid/premium market. So this doesn’t really make sense either.
So if not really these, then what?
4. Product choice
I settled on this one as being a good one to choose. House of Fraser and John Lewis have either interesting/new/exciting brands or those with a strong reputation for reliability and quality.
Debenhams, has a bit of a mix of a lot of brands and products that, for me at least, are just boring, uninspiring and not really worth thinking about. Consumers like choice, and a choice of things that are interesting. Debenhams isn’t remarkable, its not a purple cow (see yesterday’s blog post).
5. Brand strength
This is the biggest one for me.
Those brands that did well over Christmas. demonstrated again during the holidays their remarkability, building upon the reputation in consumers’ minds they have nurtured throughout the year/last years.
They have remarkability, they are worthy of remark. Whether its because of in store displays, TV adverts (John Lewis’s are award winning).
Whilst John Lewis may not have any better customer service than Debenhams, their brand reputation is built on the perception of good customer service and a slogan of ‘never knowingly under sold’. This gives the impression you can’t find what they sell anywhere else for cheaper, it doesn’t mean what they sell is cheap. But it gives me incentive/confidence to shop there.
House of Fraser has made great progress in the last year of improving their game in terms of introducing new, exciting brands in their stores as well as making their general store environment more appealing too. Walking into a Debenhams is like walking into an old people’s home.
Clever press over the holidays will also separate the winners and losers. These are clever stories that are very well timed that reinforce a brand value for each retailer.
Holiday press stories that caught my eye were;
Amazon > Introducing the Drone. It’ll probably never happen but it reinforced the fact they deliver fast, before Christmas.
Ebay > The story of the fake Xbox for which they issues a refund. Reminds consumers they are a fair place to shop with service guarantees.
John Lewis > Looking for a girl who wrote them a sweet letter with the money for a product she bought in store. Reminded consumers who nice and friendly they are as a retailer.
Debenhams > Nothing.
It’s not that these press stories were the difference. It’s that they represent the effort these successful retailers put in to reinforce in our minds their brand strengths. Which builds affinity and trust, which makes me want to shop there.
If you’re brand doesn’t speak to a core audience, fix it fast. Otherwise, the market will fix it for you on Facebook.
Malcolm Bell blogs at http://supermalcolmbell.tumblr.com. Or, to contact Malcolm, email firstname.lastname@example.org.
The Red Tree is the UK’s leading international beauty brand consultancy and a powerhouse of ideas, insight and inspiration. For an informal discussion on how we might help you, please contact us.
Middle East Beauty Hub
Explore our series of articles uncovering the intersection of tradition, innovation, and regulation within the nuanced Middle Eastern beauty markets.
Female Founders: The Lip Gloss Gap
Our series of articles highlighting how the UK beauty industry plays a vital part in closing the female fundraising gap.
New to the beauty industry? Our Founder Hub series brings together an array of articles covering topics from the costs of starting a new brand, to our recommended branding agencies.
Meet The Team
Get to know each of The Red Tree team members with our interview series. From our favourite campaigns to tips on how to enter the beauty industry.
Our series of articles exploring our fitness test for beauty brands. The unique RaceFit™ questionnaire allows you to quickly review the 7 building blocks crucial to brand success.
The Beauty Accelerator™
Read our series of articles focusing on The Beauty Accelerator™, which sees one emerging independent beauty brand receive equity investment plus the knowledge and expertise of The Red Tree.