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Relevance: The Most Essential Ingredient for Retail Survival

by Bronny Jacobsen
staying-relevant-in-retail
We all know fantastic brands that seem almost invincible as if they’ll stay part of the retail landscape forever. Could we imagine Oxford Street without Debenhams, Marks & Spencer or BHS? And where would the US be without Toys “R” Us, Sears, Harley-Davidson, JCPenney or GAP? But the reality is that every one of those brands—along with too many others to mention—is facing very real challenges.

Their sales are declining. Their customers are leaving, aging or both. Some are already in liquidation, and all of them are closing stores. These are brilliant brands that, until recently, have stood the test of time. Today they must take a cold, hard look at why they’re no longer capturing the attention and buy-in of their target markets.

While few things have just one root cause, without a doubt, a key contributor to the decline of any brand is a corresponding decline in relevance. In the end, even the most desirable brand will fall out of favor if its products no longer hit the mark with customers. Image and hype alone do not make a sustainable business.

Customers don’t generally articulate exactly what they want, but they definitely know what they like when they see it. Brands need to understand their customers so well that they are able to anticipate, execute and deliver what works—and be right most of the time. Being relevant and connected to the life of a customer is what makes both the product and, ultimately, a brand, successful.

Their sales are declining. Their customers are leaving, aging or both. Some are already in liquidation, and all of them are closing stores. These are brilliant brands that, until recently, have stood the test of time. Today they must take a cold, hard look at why they’re no longer capturing the attention and buy-in of their target markets.

While few things have just one root cause, without a doubt, a key contributor to the decline of any brand is a corresponding decline in relevance. In the end, even the most desirable brand will fall out of favor if its products no longer hit the mark with customers. Image and hype alone do not make a sustainable business.

Customers don’t generally articulate exactly what they want, but they definitely know what they like when they see it. Brands need to understand their customers so well that they are able to anticipate, execute and deliver what works—and be right most of the time. Being relevant and connected to the life of a customer is what makes both the product and, ultimately, a brand, successful.

Know your customers—and how to talk to them

Knowing and understanding your customer is the most critical piece of the relevance jigsaw, but assuming you already have that understanding will only weaken your business. To genuinely understand requires deliberate focus, but the information you can gather is absolute gold.

If you have stores, you have a gold mine. Your customers will be only too willing to give you an opinion on pretty much everything! Your store teams will also be invaluable, as they interact daily on the front line. But head-office staff and wholesale suppliers should also be comfortable, familiar and regular visitors to their own stores. In-store interaction and being “on the ground” are vital to ensuring that product, marketing, merchandising, pricing and quality relate to whomever is walking in the door. Something as simple as using the wrong model in your marketing can alienate the very people you are trying to attract.

The more you know, the better you can serve the needs of your customers. How much can they afford? How do they rate their current experience with your product and brand? Where else do they shop or aspire to shop? What is their age range? What do they care about? What do they do in their spare time? What problem are you solving for them? Is there anything new that they might be interested in? Understand their needs, wants and expectations … so that you can exceed them!

Everyone feels more valued when their opinion matters. Care enough to ask, listen and respond, and you’ll hit the mark more effectively. Try a short but deliberate multiple-choice questionnaire or a “rank in order of preference” scenario, with answer options limited to five or six plus space for a brief comment. These are more appealing than open-ended questions, which tend to feel like hard work, and keep the answers on topic. They’re easily done in person or online—with or without a promotional carrot.

Communicate often, and not just to promote. Use the platforms your customers are active on, and be prepared to engage and respond, within reason. Social media commentary and surveys are certainly useful, but they shouldn’t be a one-way conversation. Don’t be afraid of challenge, either. It can bring clarity and focus, and sometimes even a change of direction.

If you’re large enough, market research companies can survey your customers for you and glean even more detail and deeper insights. And of course, national pollsters report on the overall state of the market and the general mood of the economy, which can also be material to the spending behaviors of your customer.

Trust and alignment are created when a brand consistently exceeds a customer’s expectations because the customer feels known.

Know your numbers

Established businesses should have robust reporting in place, tracking performance down to a granular level wherever relevant. Regular analysis ahead of a buying cycle is essential for creating a rational forward plan. That analysis should show how products performed, what the sweet-spot prices were, what the ideal timings are, what stock levels are required, customer segmentation results and so on.

If a product, color, category or even  size shows an anomaly—good or bad—changes can be made to increase relevance in the next cycle. Great reporting followed by considered analysis is foundational to having products that are reliably desirable. Smaller brands, too, need simple reporting that can inform clear, forward direction and enable the building of core strength and consistency.

Test quickly but carefully—then react

The true test of relevance is being able to trial product offerings. The ability to easily do so within your supply chain is a huge advantage. Typically, test-run quantities are lower and the options more limited than those of a standard order. They also tend to have a slightly higher cost, but the trade-off is worth it when it mitigates risk.

Forming genuine relationships with suppliers is essential if you plan to use this method. Many will hold additional base stock ready for fast repeat orders if the test run is successful—or turn that stock into something different if it isn’t. Alternatively, some niche wholesalers offer speed to market at a premium price.

Once you’ve got your test stock:

1. Be deliberate about where you sell it. Select your brick-and-mortar stores and ensure that your online store includes it as well. In your marketing comms, you can highlight it as “exclusive,” which inevitably adds to its desirability. Ensure that your store teams are on board and that they merchandise effectively and with urgency. And as soon as stock is selling, monitor the sales closely, taking action as soon as you have the right evidence.

2. Have staff test the product, if possible. Nothing beats a personal recommendation. If you’re testing a move-on or a replacement for a popular item, don’t change everything; keep some of the key components the same. A rule of thumb in apparel is to change only one of the following: shape, color or price. So if a silhouette is new, keep it in a best-selling color or at a sweet-spot price.

3. Always ensure that new test items resonate with your brand. Don’t damage your integrity with something out of character. Customers increasingly want to know, and feel aligned to, the story and values of the companies they choose to purchase from.

Know your competition and where you sit in the market

Retail never stands still. The market and the competition are ever-evolving, and every savvy retailer is looking for at least an edge or a move-on.  

Very few true market leaders take risks; those who do appeal to the early adopters. These brands tend to be more exclusive and not volume-driven. Fast followers are next and do exactly that. Then comes the mass market, which ranges from “on trend” to purely practical. Whatever the product, it’s imperative to know where your brand sits on that continuum, so that you deliver your version at the right time and in the right incarnation. Too early or too late, too extreme or too tame, too expensive, too cheap—all of these can sabotage an otherwise great idea.

Keep an eye on what’s moving around you

Relevance has a life span. Humanity continually reinvents, and there is almost nothing that stays relevant without redefinition. It’s important to stay abreast of the changes in your categories and stay flexible so that you’re not the last in the market selling ponchos or, worse, cassettes and encyclopedias. Information on industry changes and fashion is easy to access, and that newness and innovation are changing increasingly rapidly.

When you start to see change happening, pull back on stock, reinvent your offering or instigate significant promotional activity to clear though any excess. Keep an eye on others in the market too; you can draw useful conclusions from items that are repeated or heavily discounted.

A number of great forecasting tools are available, as are globally informed conferences, webinars and podcasts. These cover seasonal forecasting through to long-range predictions, detailed ideas through to concepts, fringe movements to market shifts, products to mindsets. Find the ones that resonate with your brand and stay abreast of what’s happening.

And then there are the broader geopolitical issues. The world, including your customer, is concerned about the environment, plastics, mindfulness, animal welfare, sugar, empowerment for women, and a myriad of other really important and impactful things. Brands need to work out what those things might mean for their products and their supply chains and act accordingly—or risk being designated obsolete.

Relevance is the adrenaline of retail. It’s the pressure when you take the plunge on something new, and it kicks in when a product doesn’t hit the mark. But it’s also the buzz when something flies off the shelves because it is exactly what the customer wanted.  Relevance is the energy that keeps retail’s heart beating.