In this first posting of 2014 I'm sticking close to home. It's a UK centric example with global relevance. It concerns five mainstream, well established and iconic general retailers - Waitrose, John Lewis, Mark's & Spencer, Tescos and Morrison's. In my opinion it's a neat little parable about brands getting it right AND getting it wrong. The Players
Waitrose - a general, national food retailer which has positioned itself (through association with Heston Blumenthal) as being of the highest quality but with a commitment to helping people save. It's retail environment is upscale, it was one of the first food brands to embrace eCommerce and it's latest loyalty scheme includes an almost instant gratification of a free coffee.
John Lewis - clothing, furniture, electronic goods, make-up - a traditional department store owned and run by its employees, with non-jargon based and honourable commitment to "never being undersold. Strong positioning with an innovative "click and collect" scheme.
Mark's & Spencer - famous food and clothing retailer. Exceptional (for that category) ready meals, pre-cooked and party foods, full range of clothing and household goods. Ubiquitous - on every high street and used by every demographic. Constantly suffers from an identity crisis. Discounted heavily throughout the holiday season.
Tescos - middle-of-the-road, mainly food retailer which traditionally offered value but was tainted by the horse meat scandal and never recovered. Mid-rebrand (adding wood into urban stores, aping Waitrose, in an effort to upscale. Now undercut by brands such as Lidl.
Morrison's - a grocer who had crafted a proposition around freshness but who conceded ground, joins the eCommerce world for the first time this month.
The Trading Results
You have probably guessed the position already.
Waitrose and John Lewis are UP.
Mark's & Spencer are STATIC
Tescos and Morrison's are DOWN.
- A brand is either premium priced or budget priced. The middle ground has disappeared.
- An established brand will never be able to discount its way out of trouble.
- A brand must have a clear positioning, So clear that the average person in the street can describe it.
- Brands that fail to innovate will fail. The high street fashion brand, NEXT, delivers the SAME day in many cities - their sales are dramatically up.
- Consumers crave online shopping - even if they still want to collect in-store.
Defensive CEOs will talk about weather patterns, general malaise, sunspots.....but the truth is the brands with a well executed strategy are thriving.
A lesson for us all.