That’s a Mouthful, Literally

mouthfulA lot of younger and smaller specialty brands these days complain that specialty retailers won’t change with the changing marketplace. Brick-and-mortar retailers cannot rest on their laurels and expect customers to sustain a shop-local business model while they refuse to adapt their business practices for an online-savvy consumer. On this point, brand owners are right that brick-and-mortars need to leave behind their past sense of entitlement to the local marketplace. No retailer is not entitled to customers and their purchases. Sales must be earned by providing distinct value that customers are willing to pay for. As Mike Cosentino, a prominent running store retailer in Georgia says, “entitlement marketing is dead”. Retailers must engage with consumers.

But out of the other sides of their mouths, brands complain of being squeezed out by larger and more well-established brands. Small brands seem to feel entitled indeed to the attention, floor space, and efforts of specialty local retailers to take them in, build their brand recognition, sell units for them, and make them money. If these retailers do not show the love to every brand trying to carve market share out of their product category, then somehow brands feel cheated and thus justified in going around retailers to pursue customers by direct methods. Is the ratio of brands suffering from an entitlement complex any lower than the ratio of retailers who struggle to shed their entitlement mentality?

Building a brand has always been and forever will be first about offering *distinct value* that sets that brand apart from others selling similar products. No brand has a right to sell even one unit of something that does not provide a markedly different experience from every other brand’s offering, unless its market positioning is to be the lowest priced. If five brands each have 20% market share, and a sixth brand enters, offering the same thing that is not different in some significant way that the average customer will quickly appreciate, it should not expect to muscle-in and get 16-2/3% share (splitting the market now six ways). The problem here is with brands who really only sell BS when that brand offers no new contribution to the product. Yet to hear them tell it, their product is revolutionary.

When a new, young or small brand does, however, come up with a genuinely unique offering, is success theirs to claim? Has it invested appropriately not only in product design, but marketing campaigns, telling the value story, building adequate supply chain efficiencies & forecasting, driving efficient distribution to the retail level, and tech/warranty support procedures? Who claims that building a brand is supposed to be cheap, easy and without significant risk? Has it priced its products well (read: this does not mean the cheapest) and invited the customer to pay a fair price to get the distinct experience while rewarding the retailer appropriately for introducing and selling it?

The reality is nothing new. Consumers want to have a great experience over an average one. They want to be treated like they are special and make memories that occupy a special space in their minds. It is appalling to think that some brands now dismiss the brick-and-mortar retailer as no longer critical to growing a successful brand. Some others whose products also require an ongoing service component call for local retailers to move away from main street into cheap rent districts, shrink floor space and reduce reliance on selling hard goods, and to necessarily raise the price of their maintenance services dramatically to sustain themselves. All so that the internet-worshipping new world order can offer consumers commoditized, two-dimensional shopping experiences on-line? All because consumers trust brand claims about their products more than a live human being standing in front of them (really)? Is it a smart gamble to bet on consumers making good choices on their own about complex products and still expecting them to have the best possible experience with the brand’s products? Someone is spending too much time in Colorado’s newest retail industry.

My guess is, in a future advocated by some for nothing but brand-consumer direct or factory-consumer direct sales, far fewer customers will enjoy high-quality experiences with specialty goods, making the competitive market for brands that much more fierce and price-only driven. Who will brands that feel squeezed out of the marketplace because they have nothing distinct to offer other than a price blame then?

Jeff Koenig

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