Once online, many retail brands look for opportunities to expand the reach of their company by developing strategies to boost brand awareness.
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Developing positive brand perceptions online
It is important to be mindful that just as good news can spread quickly, so can bad.
A customer with a negative brand experience or perception can swiftly create damage that may be challenging to reverse by posting their story on social media. United Airlines in the US felt the backlash of a negative customer experience in mid 2009 when Dave Carroll, a musician whose guitar was broken by United baggage handlers, was poorly treated and decided to write a song about his experience and post it on YouTube. The video titled ‘United Breaks Guitars’, has had nearly 13 million views, spawned a book and a public speaking career for Carroll, and created highly undesirable attention for United Airlines from which they are still clamouring to redress.
Retailers experiencing negative fallout from disgruntled customer or the poor handling of customer issues are advised to respond as soon as possible and prioritise honesty and making it right with the customer.
Surprisingly many retail brands have actually benefited from a well-crafted turnaround strategy that has successfully responded to negative brand perceptions. Those that have realised that covering up or attempting to deflect blame is a short sighted and largely clumsy strategy that will soon be exposed due to the openness and transparency of the Internet and the online communities that dwell there.
Even those brands caught up in a seemingly innocent error that has blown up needs to react quickly and admit their mistake and take clear steps to make up for it.
Considerations of joint branding agreements
Brands can be licensed or franchised. A retailer may spend time and effort building their own brand, or they may simply license an existing brand for their own use. Logos like Australia Made, the Dick Smith brand endorsement and the Heart Foundation tick can all be deployed by suppliers to retailers or indeed, by the retailer for generic and product promotions.
Avoid association with objectionable content
The Internet breaks down the barriers to information flow and the proximity of any one user to a branded site. This also has a negative aspect. A brand may be placed at risk by association with objectionable content such as:
- Adult content
- Biased or political commentary
- Malicious or culturally inappropriate content.
Consumers are likely to be negatively impacted by sites that use or attract this content.
Brand partner non-compliance or misleading use
A retailer may have online brand relationships or partnerships with:
- Popular personalities
- Distributors
- Dedicated web businesses such as portals, application service providers (ASPs)
- Government and compliance agencies
- Third party online sales agencies.
These relationships can be very successful, helping to:
- Introduce the brand in a highly differentiated manner to an established customer base
- Build on customer recognition, values and perceptions as to quality and brand attributes
- Extend brands rapidly
- Rapidly exploit new or emerging distribution channels
- Expand distribution and extend into new product categories
- Mutually leverage brand equity
If the joint branding strategy is not carefully worked out, new complications may arise. Monitoring the brand relationship and ensuring that positive outcomes are achieved requires very strong data collection. Unless the joint brand partner brings expertise to this, the collection of data by the retailer must also be leveraged to ensure customer needs and preferences are analysed and action identified that will improve customer relationships, revenue flow and order fulfilment.
Brand identity guidelines also have to be monitored and recognised as the primary means to avoid channel conflicts or loss of distribution channels to customers.
Challenging issues for online retailers
Online issues can impact brand management. These may not appear until the online brand strategy has already been implemented.
Conflict between online presence and traditional business
An online brand promotion strategy may cannibalise an existing traditional customer base. Efforts to promote a branded product online give an advantage to the online presence of a retailer at the expense of the bricks and mortar side of the business.
The retailer may be pursuing a brand promotion strategy that moves customers from a traditional service and sales process, into one completed online. This may be cost effective but the success of the online customer acquisition strategy may cause problems at physical sites. The retailer should be able to differentiate online customers that are new and those that have an existing relationship with physical sites. Then the effect of the attraction of online customers and how this will impact sales at physical sites can be assessed.
Problems that may occur through moving customer segments online include the following:
- Traditional customers may change their buying behaviours online and are hard to keep loyal.
- Traditional infrastructure used to service physical customers is no longer sustainable.
- Post-sales service and support needed for customers online may be different to that needed for physical customers, so the retailer may have to run ‘parallel’ systems or devise new business processes.
- The transition from physical to online customer sales and service may involve a period of time where the critical mass of sales does not cover the operational costs.
- New competitors emerge for the online customer that may be more expert in poaching customers from other online retailers.
- The retailer’s brand proposition is no longer consistent with the supplier’s brand positioning strategy—the channel is no longer appropriate
About ARA Retail Institute
ARA Retail Institute is Australia’s leading retail training provider for both accredited and non-accredited learning programs. For more information, please visit: www.retailinstitute.org.au
