CPGmatters: From Shelf to Storefront: Brand-Building via Retail
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Consumer product manufacturers have historically focused on just one type of "real estate," that relatively small amount of shelf space where their brands jockey for attention in the store. But over the past few years, a few manufacturers have been doing deals with landlords to launch spacious retail stores focused exclusively on brands like Chobani Greek Yogurt, McCormick seasonings or Spanx hosiery.
When Chobani launched its New York City yogurt store back in August 2012, it created a kind of church dedicated specifically to the conversion of legions into Chobani evangelists. At the bustling Prince Street store, Chobani fans — foodies, dieters, health nuts and everything in between — delight in sampling and buying all kinds of yogurt creations whipped up on site by highly trained associates. The store may or may not turn a profit, but it definitely tells a good story.
The store is, in a sense, a lab in which the company can tinker with product offerings, tweak marketing messages, and absorb data related to the behavior and preferences of loyal customers.
In Baltimore, McCormick World of Flavors gives McCormick & Co. the opportunity to highlight all of its products in a colorful space filled with the sights, sounds and aromatic smells associated with cooking, baking and grilling. It’s one thing to see an ad for McCormick brands like Old Bay, Vahiné or Grill Mates; it’s quite another to taste expertly seasoned food spiced up on site in the McCormick store. The storefront, which opened in August 2012, even boasts its own line of flavored salsas, olive oils, vinegars and tapenades.
But even if such efforts fail to drive profits, they can certainly help manufacturers learn valuable lessons about how to be as focused and brand-centric as possible.
Today, retailers are adopting channel-neutral approaches in which they do their best to reach consumers in whatever ways the consumers prefer. Likewise, manufacturers now appear to be taking something similar to an "omni-channel" approach to brand building. In other words, they see offshoot retail locations as just one of many points of consumer contact, along with the likes of YouTube videos, Facebook pages and, of course, the all-important shelf space in other companies’ stores.
Do you see branded stores becoming an essential tool for CPG brands in the future? What questions should guide each brand in deciding whether to open a store?