December 14, 2021 — Article
Stepping up in lockdowns and panic-buying mayhem has given traditional large-scale retailers a ‘progressiveness dividend’. But they must build on it to maintain brand leadership in the long term. Charlie Rose explains.
The last two years have been tumultuous, uncertain and transformative. The one constant for many of us, aside from daily Covid press conferences, has been our national retailers. As everything was shutting down around them, our ever-reliable retailers stayed the course as an essential service open rain, hail or shine.
This resilience and constancy have done wonders for the brand health of Australian retail icons including Woolworths, Coles, Kmart, Officeworks, Bunnings and JB Hifi. These brands have proven to customers they have reliable supply chains and maintain a clear sense of quality and value in the most trying times. But what might not be as obvious is how Australians now see them as some of our most progressive and innovative businesses.
These large-scale retailers built up associations of progressiveness via the Covid character test, but off a low base. So, while they are rightly applauded for their swift pandemic responses, they now face a bigger challenge in sustaining the progressive foothold they’ve created.
The progressive lens consumers view these brands through was one of the key insights of the 2021 Brand Alpha study. For the past 13 years, Principals has conducted the study which gauges the attitudes of consumers towards brands in the Australian market. In the 2021 study, Bunnings, Woolworths, Coles, Kmart, Officeworks and JB Hifi are viewed as ‘recently progressive’. This is likely a temporary result for big retailers, in contrast to tech brands which are regularly viewed as ‘naturally progressive’.
So, what is driving this rise in perceived progressiveness? Undoubtedly: keeping shelves stocked, strong safety policies and stepping up in a global crisis. These factors were also complimented by the implementation of network-wide, customer-focused changes at pace.
Solutions such as click n’ collect, improved eCommerce capability and more wide-spread home delivery options were necessary to maintain our quality of life. And acting first on toilet paper restrictions as well as health measures, such as safety glass for cashiers and plentiful sanitizer, proved these brands cared for community wellbeing.
National retail brands have always been seen as constant and capable, principled businesses that you can rely on. In the same Brand Alpha study we asked the question, ‘Does this brand act with integrity?’ Australia responded by ranking retailers in eight of the top 10 highest scoring integrity brands. Bunnings, Officeworks, Kmart and JB Hifi were in the top four while Woolworths, Target, IKEA and Coles rounded out the top 10.
But historically major scale retailers like these aren’t seen as progressive. The Brand Alpha study asked several questions to test perceived organisational agility, and national retailers consistently ranked in the top 10 for values such as ‘Adapts quickly in the face of change,’ ‘Addresses mistakes’, ‘Meets the challenges of a changing world’, ‘Is willing to try, and if they fail, try again’ and ‘Feels free to be original’.
Big retailers have proven to the Australian public that they’re both principled and progressive, so what’s next for these brands? How can they assure they don’t squander this progressive dividend?
The critical issue to keep in mind is that customers have greater expectations of brands they see as adaptive, innovative, progressive and original.
So while it would be reasonable for retailers to catch their breath, customers will soon be asking, ‘What are these forward thinking retailers going to come out with next?’
These newly progressive brands need to act from a position of strength and show their commitment with breakthrough service innovations. Visible signs of bold thinking, agile processes or beta trials will build on this new perception that they are future-facing organisations. Case in point is Woolworths Everyday Market e-commerce venture, the WPay payments platform or the brand’s move to executive pay linked to brand reputation.
An innovative brand never wants customers to feel underwhelmed or think they are under-delivering. Reverting back to 2019’s business-as-usual might end up being damaging to your reputation and community standing.
Instead, consider simple alliances which can help drive the innovation agenda with minimal effort. For example, Officeworks forged a partnership with Canva to make it easier to create personalised designs. And the brand is innovating through the purchase of tech support supplier Geeks2U. Similarly, Woolworths has established an on-demand delivery partnership with Uber.
For retailers, this progressiveness dividend may only come about every 100 years. Be sure to make the most of it.
Charlie Rose is a Strategy Director for branding agency Principals.
This article first appeared in Inside Retail.