Launch a new label in this economic climate? Madness or marketing genius? For Ruby Anik, head of brand marketing for JC Penney in the US, launching a new brand makes perfect sense, despite the downturn. She explains her strategy to Kate McDonald.
JC Penney: Fully committed to using social media as part of its broader multichannel relationships.
Ruby Anik moved from a role as marketing manager at US consumer electronics retailer Best Buy to take up a senior position in brand marketing at department store JC Penney only two years ago, and while there are certain differences, Anik mainly sees the similarities.
Being customer-centric rather than product-centric is at the heart of retail success, whether it be a fashion line, a range of plasma TVs or anything else for that matter.
And while the economic crisis has put many plans on hold, Anik believes launching new brands in a downturn is the perfect way to maintain “newness” and innovation in her company’s stable.
“[It] gives customers a reason to shop with us more frequently,” she says. “[New labels] position us to take market share away from companies that have lost focus on improving their business during this tough time.”
Anik, who will be in Australia next month to speak at the National Retail Forum in Melbourne, sounds a note of caution, however. “Building private brands has inherent risks. It can take time to build brands and nurture and grow them, and this can be expensive from both a resource and time perspective.”
Anik’s topic is a hot one, to say the least: how to address, leverage and optimise the economic downturn. While Anik says the current recession will be more “scarring’ than in the past, and we will see fewer brands and storefronts, particularly in the US, she believes customers are still looking for small amounts of indulgence in today’s economic climate.
“They need to feel good about themselves,” she says. “We are seeing this with cosmetic purchases in the US. It’s the little treat that they can give themselves in place of things they’ve had to give up such as [holidays] or bigger item purchases. Those retailers that provide better solutions and do a better job of selling and maintaining the loyalty of existing customers by being relevant will continue to gain market share.”
Core customers is what JC Penney is focusing on. The department store giant has developed both a recession and a post-recession strategy that focuses on the need to balance the customer’s desire to be pragmatic at the moment with the temptation of the new.
The key, Anik says, is building and maintaining brand loyalty and achieving the right balance of sales promotion and brand messaging.
And sales promotion and brand messaging are a whole new ball game these days. While traditional advertising and marketing techniques still work, non-traditional marketing and customer relationship management (CRM) have opened up many new ways to both attract new customers and maintain existing profitable ones.
“There has to be a balance between traditional and non-traditional marketing elements to reach diverse customer bases,” she says. “There has been much written about the death of traditional media, but it’s not true. Used strategically, traditional marketing media and tactics within those media are critical in building customer momentum.”
According to Anik, customers are loyal to brands but have become “channel agnostic”. “The reality is that consumers no longer look at the store, online or the 800# [number] as different places to shop. It is one brand experience for them. Customers’ purchasing habits are fluid. We know that researching online and buying in store is as prevalent as browsing in stores and shopping online. A brand has to understand the customer’s needs and wants and be relevant to those needs and wants in building their multi-channel offerings and relationships.”
Anik is fully committed to using social media as part of that multichannel relationship. The company recently won the World Retail Congress award for best digital retail advertising campaign for its Beware of the Doghouse interactive viral campaign. Created by Saatchi & Saatchi New York, the campaign centred around allowing women to reprimand their loved ones for their appalling gift ideas, from power tools on Valentine’s Day to ride-on lawnmowers for Christmas.
Women were encouraged to upload their partners’ depredations into the Doghouse, allowing them to be released only when they bought diamond jewellery from JC Penney.
The company also uses its JCPteen.com website for back to school campaigns and ties them in to Facebook, YouTube and Twitter. JC Penney, of course, is a giant, with a well-manned marketing department specifically for multichannel and CRM programs. So how do small retailers compete with the giants?
“Invest in market research,” she says. “Gain deep understanding and insights into your customers so that relevance is the key reason for growth. Multichannel convergence and the need to be digital are fundamental, permanent changes.
Having a robust data file and using that information to move customers from one transaction to another is critical to lifetime value. Retailers have to look at the last transaction as the beginning of the next.”