This blog explores the complicated relationship between the retailer and the brand and how this contentious relationship has created a less than stellar shopping experience for the consumer. Both the brand and the retailer are competing for the attention of the consumer but they don’t work together to garner this attention. What ends up happening is the consumer is bombarded with messages from both which overwhelms their decision making process. So what are the main conflicts and how does it impact the relationship retailers and brands have with the consumer?
Retailers think they own the customer relationship, but brands want to co-own the relationship.
The result of this battle has been for brands to sell direct to the consumer. This has been quite common in the consumer technology market. Most brands will sell direct to the consumer on their site or have opened their own retail shop (ie: Apple, Microsoft, Sony). On a smaller scale they are opening pop-up shops. CPGs also sell direct to consumers but is usually more personalized product samples like m&ms and Tobasco sauce brands. This allows the brands to speak directly to the consumer in their own voice. Customers seek out shopping experiences that are best for them and in many cases will pay more for a better shopping experience. Retailers and brands would be better off focusing on making every channel a superior shopping experience and not fighting for attention.
Retailers and brands own transactional data of the customer but neither share with each other.
Both the retailer and the brands collect data from their customers but neither have a complete view. Just think how much better they could make the shopping experience if they shared their data. Let’s say someone browsed online for a smart speaker on the brand’s website and then went to a mass merchant retailer and purchased the speaker. Now that brand is sending retargeting ads to a customer who has already purchased the product. Or, let’s say someone purchased a tablet at a Microsoft store but then purchased a cover from Best Buy. Now Microsoft is sending a customer emails promoting covers even though they have already purchased one. Most customers want personalized communication from the retailer and the brand but don’t want to be bothered with communication that is irrelevant. If the retailer and the brand could collaborate better on communications, this would result in more sales.
Retailers control communication access to the consumer, but brands want to communicate directly as well.
Over the years, the opportunity for brands to communicate their own message in the store has been restricted. Stores want to create a cohesive and uncluttered environment and if every brand was able to place stickers and point-of-purchased materials all over their product, it would look like a circus. Even online, content is presented in a way that doesn’t allow a brand to truly stand out. The manufacturer can own a brand page, but this isn’t really the way a consumer shops online. The customer loses in this scenario because everything is parity. It is difficult to see competitive advantages and disadvantages between products. Brands can pay to have their products show cased but it isn’t financially feasible for many brands. In this case, the consumer loses because they are only seeing the products that can pay to be promoted.
Bottomline: Retailers and brands should focus on the shopping experience.
Customers will shop at a retailer for many different reasons such as: lower prices, better service, convenient location and product offerings, to name a few. Consumers may seek out a specific brand and not care where they purchase the product. The retailer needs the brand and the brand needs the retailer. The retailer is more concerned with shopping trips and the brand is concerned with the number of products sold. Both need to focus on giving the customer what they want during their purchase journey. A happy customer will visit the same retailer over and over again. If the customer is happy with the product they bought, they will repurchase from that brand.