Best Buy was one of the first retailers to proclaim they are fighting back against showrooming, a phenomenon where customers browse for items in-store and then search for them online and buy them for less from eRetailers such as Amazon. To combat showrooming, Best Buy has made what had been a seasonal practice of matching prices a year-round policy. Target has done the same, and we can expect other retailers to soon follow suit.
Competing on price alone is dangerous, so I’d ask: Are retailers losing sight of what really matters? Does price matching help retailers build the brand equity they really need? I have a theory about showrooming: While most retailers gravitate toward competitive pricing to combat showrooming, retailers could be saved by implementing a celebrity brand strategy instead. Some of you are probably thinking I am crazy right about now, especially with all the drama in recent weeks with two powerhouse retailers fighting over the Martha Stewart brand, but hear me out. A successful celebrity product strategy can help offset showrooming and at the same time build brand equity, if it’s done right.
Consider the partnership between Martha Stewart and Kmart. In its heyday, the partnership was arguably the most successful retail and celebrity brand integration of its time. Together, they grew sales of more than $1 billion dollars in yearly volume across 14,000 categories ranging from Christmas trees to bedding and picture frames. Michael Jordan’s partnership with Nike is another great example. First established when the Chicago Bulls drafted Jordan out of college in 1984, this powerful branding combination still lives on today—those vintage Air Jordans in your closet are worth some serious money today and a whole new generation of kids want to buy them now.
The brands affiliated with Michael Jordan and Martha Stewart were able to leverage their popularity to capture consumers’ attention, or to take it a step further, even establish connections with customers. Celebrities can help create true brand differentiation, especially if the celebrity product line is unique to one retailer.
A celebrity brand strategy is one of the easiest ways to garner immediate brand awareness—but to achieve success and differentiation it takes more than a fancy commercial. Celebrity branding is hard work, and retailers must take into consideration the following key elements before implementing that kind of strategy:
Make your celebrity connection relevant, not quirky. From Justin Bieber Nail Polish to the Paris Hilton Scrapbooking Kit there are countless examples of celebrity-endorsed products that leave you scratching your head. A celebrity must have authority in the brand category or consumers see right through it. A perfect example of how to do this right is the Home Shopping Network. The multichannel retailer has transformed itself by creating product experiences that combine storytelling and celebrity partnerships. As a result, their customers are more invested in the hosts, celebrity brands, promotional events, and tie-ins, and ultimately, the products. The celebrity chefs they partner with on the network are experts in their fields. Credibility brings a source of authority.
Ensure and insist on exclusivity. A surefire way to make something feel less special is to make more of it, which is what happened with Martha. Her previous retail marriage to Kmart was wildly successful in its prime but then something happened. Martha was everywhere, with close to 30 percent of Martha Stewart Living company revenues coming from licensed products. The brand then expanded to other retail outlets including her work with Macy’s, a crafts’ collection in Michael’s, pets supplies at PetSmart and even a line of Kirkland Signature Martha Stewart hams at Costco.
Consider your long-term brand strategy. If done right, a unique celebrity brand can guard against constant discounting, but that must start with having the right merchandising strategy. Look at Lululemon, a brand that has built a community of passionate women around the yoga lifestyle, and pants known for making your butt look amazing. Despite their recent snafu with a recall of see-through pants, Lululemon has underscored its fitness wear culture with a strategy of using "brand ambassadors," the men and women who are the top fitness instructors in their local communities. These local "celebrities" use a softer sell, but, similar to a strategy of using "famous" celebrities they, too, appear in photos in-store and mirror the brand mission, while demonstrating daily the great product and design in their respective fitness clubs.
Treat the celebrity-brand relationship like a startup. To ensure the relationship moves beyond simply putting a name on a shirt label or picture frame, you should also ensure there are realistic joint performance metrics for the partnership. Look to tie the one-to-one experience directly to commerce. For example, start with a new product line or a seasonal launch where the celebrity is incented beyond brand awareness and ultimately sales.
When done right, a celebrity brand strategy can be powerful and help retailers offset the underlying symptoms of showrooming. If you can incent customers through both your brand and a celebrity they trust they will have more reason to buy items based not just on price, but on pride of association. Bottom line: Don’t give your customers a reason to pull out a bar scanner app and search for a lower-priced alternative on Amazon.
—Jeff Fagel is vice president of marketing and brand development at edo, a venture-backed startup that helps advertisers connect online advertising with in-store results. You can find him on Google+ or Twitter.
[Image: Flickr user Todd Huffman]