A couple of weeks ago, MNB conducted an exclusive e-interview with Alan J. Zorfas, CEO and founder of Apirient, a company that specializes in helping companies revive dying brands. Zorfas has a ton of experience in the brand building and brand-reviving business, having worked with companies as diverse as Timberland and Citigroup, Novartis and Polaroid, Motts and Frito-Lay.
The focus of our discussion was the notion that dying brands are those that somehow have lost the link between product and consumer…a link that can be rediscovered and re-energized, given the proper corporate culture and commitment. And we got a lot of reaction to our discussion, enough so that it got us thinking more about the subject…and we returned to Zorfas for an extended discussion of branding.
MNB: In our first interview you made a couple of statements that we’d like to come back to:
“If your margins are declining and you’re frequently relying on promotions to drive traffic, you probably have a dying brand. In some segments, you might spend the majority of your ad budget running manufacturer co-op ads. This suggests you have nothing special to offer your customer.”
And...
“If the only “connection” you have with your market is that you sell merchandise, then you’re a commodity. If you worry more about your competition than your customers, you might have a dying brand. If the only thing you measure is daily sales receipts, then you’re not building your brand.”
It seems to us that you've just described 85 percent of the food retailers in this country, who are so locked into dealing with numbers and competing with Wal-Mart that they’ve forgotten their brand (or even that they had one).
But the big question, it seems to us, isn’t whether retailers – especially supermarkets – should pay more attention to their brands...but how to do it. For example, if you are a major, national chain like Safeway or Albertsons, how do you do that without conceding the price issue completely to Wal-Mart?
Alan J. Zorfas: It does require a deliberate process to develop a strategy that is distinct and sustainable. And, each retailer is different. The process requires dialogue with the consumer, market analysis and - perhaps most importantly - the creation of a new, internally-inspired vision for the business. But, here are some things to keep in mind.
First, most Americans report to buy “quality over price,” according to MRI. And, they do. Only a small percentage of shoppers will “always buy at the lowest price.” While it’s so much easier to lower prices and run sales, you’ve got to “believe” that you can compete on quality of produce, service, shopping experience, and other benefit areas that influence decision-making. In our culture, quality and price are relative terms. To me, the magic of Wal-Mart isn’t its “always the lowest price” promise, but how it has connected to the consumer on values. Consumers “trust” Wal-Mart!
Once Safeway and Albertsons discover - or re-discover - their relationships with customers, they can build strength and value in their market position. The challenge for most retailers is that brands are built on values. These “intangibles” are tough to grasp, but therein lies all the motivation and “connection.” While Wal-Mart’s leverage gives it a price leadership advantage, there are other ways to create distinction and value. And, once you embrace them, it can change everything.
How you actually “package” value is another story. But, it should emanate from your brand vision. There is ample opportunity to be creative and test various value propositions.
How about smaller, regional chains and independent supermarkets? What brand advantages do they have that should be exploited?
Alan J. Zorfas: In many ways, it’s easier for the smaller, independent supermarkets. They have more latitude to be distinctive. In my neighborhood, I have many choices: Super Stop & Shop, Hay Day, Stew Leonard's, Wild Oats, Food for Thought and more. Shoppers often rely on more than one supermarket to play various roles: convenience, gourmet, shopping with family, value.
The key is to know your consumer, understand your strengths, and make a commitment to distinction. There is only room for one “price leader” in the neighborhood. So everyone else must deliver strongly on a key benefit area or fulfill a distinct, niche role. For the consumer to “get it,” you have to communicate and demonstrate your promise strongly and consistently.
I think too often retailers wait for the “answer” versus going out and making it happen. And, you don’t need to win on everything to be successful.
Are there specific examples in other venues that could be cited as role models for how food retailers ought to be developing brand-oriented strategies? In our last discussion you cited Starbucks, but it seems to us that Starbucks is a specialized example because it is highly focused on one specific category, as opposed to the multiple categories and broad marketing efforts used by supermarkets.
Alan J. Zorfas: I recently heard a story about a self-service gas station that was beating all the competition in the immediate area. When the corporate regional director asked the franchise owner why, the owner responded, “I wash their windows and help them out.” The distinction in service and attitude made it a friendlier, safer, and more inviting experience. And, he was the lowest price on the block.
We use Starbucks to help illustrate a point, but it’s not as far off as you think. Stew Leonard's is an attraction. Out of town and even foreign visitors insist on a visit to Stews. Their “Ho Down” grille outside matches the feeling of Stew’s as a farm. It’s all about experience and community trust. Like Wal-Mart, you feel Stew’s is pulling for you.
You know, one of the tools of my trade is what we call “value elevation.” When you think about the “connection” supermarkets have to family, children, being a nurturing Mom, and the community, there’s so much more potential than meets the eye.
In this specific case - competing with Wal-Mart - is it easier to come to market with an existing brand that may be dying from neglect? Or would it be better to create an entirely new entity? And if you were advising a client in the food retail arena about how to come to market, what would you suggest?
Alan J. Zorfas: Kevin, more million dollar questions! But, they keep me on my toes. As I mentioned, it’s more efficient to work with an existing brand…all things being equal. You have to conduct some research or assessment to ensure your dying brand doesn’t have negative baggage. If your existing brand is trustworthy, then it may just need a dramatic overhaul to keep pace with consumers. Brands must evolve, because consumer evolve and expect that “new is better.” That’s ingrained in our culture. The advantage of a new brand is that it has a chance to define a new, more relevant position with the customer. But, it has to deliver. Customers sniff out over-promises and insincerity pretty quickly. Generally, to answer your question, I wouldn’t give up on the existing brand too quickly. Each case requires a disciplined review.
“Knowing thyself” is the hardest thing to do. But once you do, you can feel it elevate the energy and performance of your staff, your customers and your business.
The focus of our discussion was the notion that dying brands are those that somehow have lost the link between product and consumer…a link that can be rediscovered and re-energized, given the proper corporate culture and commitment. And we got a lot of reaction to our discussion, enough so that it got us thinking more about the subject…and we returned to Zorfas for an extended discussion of branding.
MNB: In our first interview you made a couple of statements that we’d like to come back to:
“If your margins are declining and you’re frequently relying on promotions to drive traffic, you probably have a dying brand. In some segments, you might spend the majority of your ad budget running manufacturer co-op ads. This suggests you have nothing special to offer your customer.”
And...
“If the only “connection” you have with your market is that you sell merchandise, then you’re a commodity. If you worry more about your competition than your customers, you might have a dying brand. If the only thing you measure is daily sales receipts, then you’re not building your brand.”
It seems to us that you've just described 85 percent of the food retailers in this country, who are so locked into dealing with numbers and competing with Wal-Mart that they’ve forgotten their brand (or even that they had one).
But the big question, it seems to us, isn’t whether retailers – especially supermarkets – should pay more attention to their brands...but how to do it. For example, if you are a major, national chain like Safeway or Albertsons, how do you do that without conceding the price issue completely to Wal-Mart?
Alan J. Zorfas: It does require a deliberate process to develop a strategy that is distinct and sustainable. And, each retailer is different. The process requires dialogue with the consumer, market analysis and - perhaps most importantly - the creation of a new, internally-inspired vision for the business. But, here are some things to keep in mind.
First, most Americans report to buy “quality over price,” according to MRI. And, they do. Only a small percentage of shoppers will “always buy at the lowest price.” While it’s so much easier to lower prices and run sales, you’ve got to “believe” that you can compete on quality of produce, service, shopping experience, and other benefit areas that influence decision-making. In our culture, quality and price are relative terms. To me, the magic of Wal-Mart isn’t its “always the lowest price” promise, but how it has connected to the consumer on values. Consumers “trust” Wal-Mart!
Once Safeway and Albertsons discover - or re-discover - their relationships with customers, they can build strength and value in their market position. The challenge for most retailers is that brands are built on values. These “intangibles” are tough to grasp, but therein lies all the motivation and “connection.” While Wal-Mart’s leverage gives it a price leadership advantage, there are other ways to create distinction and value. And, once you embrace them, it can change everything.
How you actually “package” value is another story. But, it should emanate from your brand vision. There is ample opportunity to be creative and test various value propositions.
How about smaller, regional chains and independent supermarkets? What brand advantages do they have that should be exploited?
Alan J. Zorfas: In many ways, it’s easier for the smaller, independent supermarkets. They have more latitude to be distinctive. In my neighborhood, I have many choices: Super Stop & Shop, Hay Day, Stew Leonard's, Wild Oats, Food for Thought and more. Shoppers often rely on more than one supermarket to play various roles: convenience, gourmet, shopping with family, value.
The key is to know your consumer, understand your strengths, and make a commitment to distinction. There is only room for one “price leader” in the neighborhood. So everyone else must deliver strongly on a key benefit area or fulfill a distinct, niche role. For the consumer to “get it,” you have to communicate and demonstrate your promise strongly and consistently.
I think too often retailers wait for the “answer” versus going out and making it happen. And, you don’t need to win on everything to be successful.
Are there specific examples in other venues that could be cited as role models for how food retailers ought to be developing brand-oriented strategies? In our last discussion you cited Starbucks, but it seems to us that Starbucks is a specialized example because it is highly focused on one specific category, as opposed to the multiple categories and broad marketing efforts used by supermarkets.
Alan J. Zorfas: I recently heard a story about a self-service gas station that was beating all the competition in the immediate area. When the corporate regional director asked the franchise owner why, the owner responded, “I wash their windows and help them out.” The distinction in service and attitude made it a friendlier, safer, and more inviting experience. And, he was the lowest price on the block.
We use Starbucks to help illustrate a point, but it’s not as far off as you think. Stew Leonard's is an attraction. Out of town and even foreign visitors insist on a visit to Stews. Their “Ho Down” grille outside matches the feeling of Stew’s as a farm. It’s all about experience and community trust. Like Wal-Mart, you feel Stew’s is pulling for you.
You know, one of the tools of my trade is what we call “value elevation.” When you think about the “connection” supermarkets have to family, children, being a nurturing Mom, and the community, there’s so much more potential than meets the eye.
In this specific case - competing with Wal-Mart - is it easier to come to market with an existing brand that may be dying from neglect? Or would it be better to create an entirely new entity? And if you were advising a client in the food retail arena about how to come to market, what would you suggest?
Alan J. Zorfas: Kevin, more million dollar questions! But, they keep me on my toes. As I mentioned, it’s more efficient to work with an existing brand…all things being equal. You have to conduct some research or assessment to ensure your dying brand doesn’t have negative baggage. If your existing brand is trustworthy, then it may just need a dramatic overhaul to keep pace with consumers. Brands must evolve, because consumer evolve and expect that “new is better.” That’s ingrained in our culture. The advantage of a new brand is that it has a chance to define a new, more relevant position with the customer. But, it has to deliver. Customers sniff out over-promises and insincerity pretty quickly. Generally, to answer your question, I wouldn’t give up on the existing brand too quickly. Each case requires a disciplined review.
“Knowing thyself” is the hardest thing to do. But once you do, you can feel it elevate the energy and performance of your staff, your customers and your business.
- KC's View:
- If you have questions or comments for Alan Zorfas on branding, and you want to keep the dialogue going, send them to kc@mnb.grocerywebsite.com.
