To build a brand that stands above the rest--especially in the rapid shifts of retailing--you have to do more than offer the best products and service in your industry. You have to create a following that will stand by you when things go wrong, push you to be better, and lift you above the competition. When you achieve that, you have to be as loyal to your fans as they are to you.
Consumers today have more choices and more power to support companies that give them something to love. It's not just about access, convenience, or outstanding customer service anymore; these are requirements for brands and are increasingly taken for granted. People are now seeking brands that fit with their values and give them something to believe in--plus the best quality and price on the market.
This age of technology and hyper-connectivity is making it possible for businesses to engage customers online, tapping into social networks and other digital media to get their story and vision--if not their physical product--in front of communities, browsing shoppers, and potential brand loyalists. More and more consumers are making the choice to shop online and as a result established retail brands are under pressure to adapt. If access is no longer so important, is the capital required to support a traditional distribution model a wise use of limited resources? This strategic question is underpinned by consumer data that is irrefutably pointing to the shift toward online shopping--comScore reports that retail e-commerce spending for November 2012 amounted to more than $20 billion, up 14% above the corresponding figures a year before.
For traditional retailers, the path forward is still unclear. If your business is dependent on physical access to consumers and you have not created a brand ethos that people care about, how do you adjust to the increasingly complex and competitive retail environment? New companies seeking to enter the retail market or build a brand presence are faced with even broader choices. Should they set up shops across the country? Opt for a smaller number of flagship stores in core markets? Distribute to boutiques or department stores? Or do they skip the brick-and-mortar route altogether, sell strictly online, and invest the savings in building a brand that consumers will align with?
The fact that it's possible to do the latter marks a tremendous change from even a decade ago. Looking back, it would have been difficult to imagine building a digital-only brand. But this is possible today, by cultivating fans that feel an emotional connection with--and eventually love for--your brand. This is what is takes to drive people to buy a product, come back for more, and tell their friends about it. The old strategy was to broadcast your message to a mass audience through print ads, billboards, or high-priced Super Bowl commercials. Increasingly, consumers are looking to their peers to guide their purchasing decisions, and traditional advertising is being supplanted by more organic modes of communication--word of mouth, social media, and any number of blogs and content sources.
What's making things even more interesting is that the power of communication does not stop at brand discovery. On the flip side, the social era is building public forums for criticism and holding companies more accountable for their claims than ever before. Because consumers can sense an inauthentic brand a mile a way, companies must live by their core principles and go above and beyond expectations for sound business practices.
A good example is Patagonia's Common Threads Initiative, which asks customers to buy less in the interest of environmental sustainability--a goal that is at the core of the brand's identity. Perhaps not surprisingly, this campaign appears to be galvanizing customers to get behind the company more than ever. Similarly, online-only apparel brand Everlane shut down its site on Black Friday--the biggest day of the year for e-commerce--to convey the brand's vision to encourage shoppers to consume less by buying long-lasting, better-quality clothing.
Consumers are becoming so savvy that retailers simply can't settle for anything less than perfection in all aspects of the business. The onus is on companies to give consumers what they want and deserve. Technology and culture have aligned to create a perfect opportunity for consumers to drive a new era in retail, one in which they have the chance to support brands that they believe in. Companies that have heart can rise to the top.
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--Bayard Winthrop is CEO of American Giant.
[Image: Flickr user Felix63]