In her first Thursday Night Insight, Research Consultant Emma Flood considers the importance of understanding and maintaining corporate position and brand image.
Almost 100 years ago, in 1909, the retailer Woolworths started life in Britain. F. W. Woolworth, as it was known then, sold a variety of merchandise from stationery, to toys and children’s clothes, to confectionary – and had a focus on providing ‘value-for-money’. As an American-owned company, its stores operated using an innovative US-style store layout, encouraging shoppers to browse, rather than to simply make a purchase and leave.
By the 1920s the retail chain was riding high, with one store opening every 17 days. More recently, when Woolworths Group plc floated on the London Stock Exchange in 2001 with an opening price of 32p, the retailer continued to perform well, with shares rising and peaking at 55p in April 2005.
So what has happened to Woolworths? Since January 2007 Woolworths shares have been in almost constant decline, and after almost 100 years of retailing on the British high street, Woolworths has closed its doors with an estimated £385m debt. Throughout December and January all of its 807 stores will close, and 27,000 temporary and permanent staff will lose their jobs.
In its interim report last year, Woolworths noted several factors which now seem prominent in contributing to its demise. There has been a distinct change to the retail landscape, and retailers like Woolworths have seen increasing competition from food retailers (amongst others) who are expanding into general merchandising. The growth of the digital entertainment market has effected a change in consumer preferences towards digital delivery of products (i.e. MP3 rather than CD) and thus further threatened Woolworths’ entertainment offering. Perhaps the overarching factor to be taken into consideration is the current economic climate and the deterioration of the UK retail market, forcing redundancies and store closures amongst other retailers also.
The closure of the 807 Woolworths stores has lead to major clearance sales – you may well recall images of the bargain hunting shoppers queuing in their droves, fighting over slashed price goods as the store emptied itself of its final stock, even selling its fixtures and fittings at bargain prices. Or perhaps you’re like me – despite the fact that I too love a bargain, I was not tempted to hunt around the store during its final days.
This started me thinking about Woolworths, and why I’ve never been particularly attracted to shop there. Along with the rest of the UK, I am very well aware of the name Woolworths, but had to ask myself the question, what is Woolworths? What does it mean to me? What does it offer? Various images flooded my mind – pick ‘n’ mix counters, shelves stacked with everything from crockery to children’s clothes, and the ever present CD/DVD/gaming section with its fairly limited offer. I looked to the Group’s website for some clarity and found Woolworths positioning itself as ‘one of the UK’s leading retailers focused on the home, family and entertainment’.
I’m afraid this didn’t particularly clarify things for me, and I’m still confused by the sheer array of products Woolworths sells, and unsure exactly why I would be motivated to shop there. For me, Woolworths does not hold a clear position in my mind, nor indeed the changing marketplace.
In the face of increasing competition, contracting markets and a tough economic environment, it is vital to carve or maintain a distinctive and attractive brand image and position within the market. A clear and differentiated position will make it easier for your customers to identify and engage with your brand and offer, and motivate them to purchase from you. If you do not have a clear message, you are less easily understood by your customers, who in turn have less of a reason to use you.
Corporate positioning and branding research enables you to understand what customers and potential customers consider your brand values to be, and what the preferred brand characteristics are. In understanding preferred brand values, you can build a market position which emphasises these and your company’s key strengths; in turn helping to aid customer retention and acquisition.