Don’t give shoppers a reason to doubt your brand credentials
Gillian Hamill outlines why retailers need to know what you are selling and believe in it, if you want to maintain consumer trust in your brand.
Print16 May 2013
A recent survey by consumer watchdog, Which? magazine, discovered 150 own-brand products on supermarket shelves that looked almost identical to the branded versions. Given that established brands have invested millions in NPD and marketing their ranges over many years in order to build up consumer recognition and trust, is it fair for private-label variants to effectively swoop in and piggyback on their success in this manner? Fiona Donnellan examines the issue on page 16.
In a bid to counteract the threat posed by the growing own-brand phenomenon, a recent Irish Independent survey found some brands were engaging in ‘product shrinkage’. Faced with rising costs – yet reluctant to put up prices for fear of alienating cash-strapped consumers – certain manufacturers are marginally decreasing their product sizes. The logic behind such a move is certainly understandable, yet I can’t help but think it’s a dangerous practice. The reason being that once hard-earned consumer trust in a product or brand is gone, it is extremely difficult to claw back. As chief executive of the Consumers’ Association of Ireland, Dermott Jewell, commented: "People rightly feel hard done by when something they’re used to buying suddenly gets smaller". Essentially, when it comes to selling, transparency is crucial.
The transparency of established brands can also perform a useful function for retailers; they allow direct price comparisons with rivals. As independent retailer Alexander Cleland, the managing director of Clelands Supermarket in Abbeyleix, Co. Laois, recently commented in an online Linked In discussion, he was able to conduct a price survey with Tesco and SuperValu on "a large trolley of branded groceries" and found his group came out on top.
And if ever a potent example of the difficulties involved in comparing similar, yet crucially not the same, products was ever needed, then surely it is the case whereby Aldi successfully sued Tesco to the tune of €150,000 for doing just that last year. Viewed in this context, Lidl’s current ‘Brand Challenge’ campaign appears to be a bold move.
Of course, we don’t need to cast our minds back too far to find an example of when consumer trust in a brand dramatically faltered either. During the horsemeat controversy, several media commentators asked: ‘What did people expect when they were able to buy eight Tesco Everday Value Beef Burgers for little more than €1?’
Following the collapse of a garment factory in Bangladesh last month where the death toll reached over 1,000, people are once again asking if they can expect to buy highstreet products at rock bottom prices, without any short-cuts creeping in somewhere along the production line.
To very briefly touch on the specifics of the Bangladesh factory case, the decision to let employees enter a building when police had warned factory owners of its unsafety, was obviously a serious ethical breach. This choice which triggered such devastating consequences, once again shows the importance of retailers taking full responsibility and implementing stringent checks for the products they sell all along the supply chain – just as the horsemeat controversy did. Regardless of whether products are destined for the budget or luxury end of the market, retailers need to know what they are selling and believe in it.
The results are disastrous if you don’t. Exhibit A is Gerald Ratner, chief executive of Ratners jewellery chain, during at a speech at the Institute of Directors in 1991. "We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95," trilled Ratner. "People say, ‘How can you sell this for such a low price?’, I say, ‘because it’s total crap.’"
Although any potential fall from grace may not be as explosive as the former CEO’s, it is nevertheless incumbent on retailers to do everything in your power to give shoppers no reason to doubt your brand. It seems timely as the Grocery Code of Conduct continues to rumble through the Houses of the Oireachtas, to remember another classic saying: "The truth will always out." Acting in an ethical, responsible manner may involve a short-term cost but it will always ultimately bear long-term fruit. Afterall, once your reputation has been tarnished, your business won’t be long in following it on a precipitous downward slope.
Gillian Hamill,
Acting editor,
ShelfLife magazine
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