Retail is not dead, bad brands are dead
David Jones, Jeanswest, Bardot and Collette. Retailers are being challenged by the economic climate and shutting their doors, but The Content Division's Brittanie Dreghorn argues that brands that have evolved their promise will do more than just survive.
“Retail is a damning place to be in 2020,” or at least that’s what they say.
News outlets globally are reporting how retailers en masse are closing their doors, be they fashion, food or accessories.
Australian Retailers Association chief executive, Russell Zimmerman, accredits the downturn to a number of factors, some outside of brands’ control, and some well within their own backyards.
Interest rates, consumer confidence and increased rent costs are among the few aspects Zimmerman says are “good reasons” why Australian retailers are doing it tough.
In the same breath, he notes retailers “not moving quickly enough with the times”, “not getting involved online in the right way” and not “getting the target market right” as reasons why we’re seeing the collapse of a number of legacy labels and brands across the country.
For many casual onlookers, it would seem the first few factors are the main reasons retailers are no longer in their industry. But for marketers, it’s a different story. A bit more transparent, you could say.
Let’s take David Jones Fortitude Valley for example. The quasi-department store is located just a mere 550m from my office and on the luxury fashion thoroughfare that is James Street. In theory, it should be buzzing, and I should have been there.
Surprise, I haven’t. And now it’s closing. I never thought to go there because I knew there were hardly any labels on offer there, which is the only reason I’d ever shop at David Jones. More than that, the brand has never had a free loyalty system or membership that would make it worth my while to shop there over the standalone stores nearby.
The store is failing on customer experience (lack of options and inconsistency of in-store experience) and the brand is failing to live up to the promise it makes to its customer.
Jeanswest? I couldn’t tell you the difference between that brand and Just Jeans, a competitor which I assume is still going but honestly, I couldn’t tell you and I couldn’t care.
That’s right. No one gasped audibly when Jeanswest or Bardot closed their doors earlier this year. No one wept when they heard Napoleon Perdis Cosmetics was no more. And no one’s mourning the loss of fast fashion accessories store Collette.
Retail is not dead, brands that fail to evolve are
Brands never used to have to inspire customers to come and shop at their stores. They had a secure market as long as they could keep pumping out clothes or products of a reasonable quality at a reasonable price.
The shopping centre or mall was a ready-made, engaged audience, price to entry was high, and brands that cracked it got to ride a wave while consumer spending increased.
That is until competition opened up in the way of companies that established brands that truly lean in to their ideal customers and established an effective online marketplace. Retail still exists, brands just have competition in-store and online.
And brands, it’s a jungle out here, so you better be ready.
The antidote to these run-of-the-mill retailers is the incredible retail experience that is an Aesop store.
Here’s a brand that’s recently cracked 30 years in trading, the most growth of which has happened over the last 17 years.
If there’s a downturn in retail, this brand doesn’t know about it. Zimmerman’s suggestion that brands are not up with the times is the perfect example of exactly why Aesop is successful.
The brand has pivoted its business model from being product centric (selling wholesale into department stores around the world) to being retail centric where a big focus is on in-store experience and leaning into the brand voice.
That’s right. In 2020, retail, seemingly the last avenue a brand should be considering, is what Aesop is leaning into. The recipe for success? Aesop CEO, Michael O’Keeffe, told The AFR: “The holy grail is to combine events, the online and physical experience.”
CEO of Aesop, Michael O’Keeffe
Let’s revisit Zimmerman’s good reasons for retailers doing it tough: “not moving quickly enough with the times”, “not getting involved online in the right way” and not “getting the target market right”.
Aesop has pivoted its business model to be “more with the time”. When it comes to getting involved online, the brand is leading the charge – check out its Instagram and its incredible written content (The Ledger is the brand’s monthly publication that connects the brand with the art community). Which brings us to getting the target market right, to which, CEO Michael O’Keeffe says: “The challenge for us is to be more creative, to make the voice more distinct, rather than whittling it down by going more mass.
“The big brands will beat us if we try to be like them. Nike has reinvented itself in that regard. And Vans. Look at the problems a brand like Billabong had when they lost that early adopter customer.”
Retail brands can also look to Mecca’s in-store experience, Gorman’s incredible fit outs, Country Road’s new green stores, Apple’s Genius Bar or Westfield’s swish new dining precincts. There really is no shortage of examples.
The truth is retail is a damning place to be in 2020. But only if you’ve lost sight of the reason you exist in the first place: your brand and your customer.
Brittanie Dreghorn is an account director at The Content Division
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So the answer is to ‘lean in’, but not too far, otherwise you might fall.
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I get the point the article is making that some brands handle change better than others but firstly Aesop….my apologies of it is me but I have never heard of them and so will they still be a great example to use in 5, 10, 15 years……?
Perhaps they will but it’s a bit early to judge I would say.
More relevantly, you cannot deny that no matter how good a brand/company in a declining market is, it is still going to do less well than before. No doubt there were brilliant horse and carriage companies in the early 1900s, frantically adjusting to the arrival of cars but it did nothing more than stave off the inevitable for a period of time.
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Mr Hall-Smith you are unqualified to comment here if you haven’t heard of Aesop.You obviously don’t travel very often because their beautiful,minamalist,always on brand shops are in nearly every major city in the world.
They are a great Australian success story and been in business for at least 25 years.
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Agree on this point, their London stores are particularly cool.
Mr HS is a recruiter, not a marketer though, so his “civilian” commentary is what it is.
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Refreshing and well said. A lack of customer centricity will kill most businesses/brands, including retailers.
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Thanks for your comment, Mark. Assume you’re not Aesop’s target market – so that’s ok. You are right though, for brands making products that are redundant, they could just be waiting for the inevitable. Alternatively, they could completely pivot. It’s a matter of producing something for the audience rather than for the sake of producing.
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