Do retailers need to work on making more emotional connections?

Discussion
Source: Kurt Salmon BDI article
Jan 26, 2017
Tom Ryan

Two sessions at the 2017 National Retail Federation Big Show explored how developing emotional connections with consumers can help retailers avoid competing as much on price as well as factors such as selection or service.

At one session, Bruce Cohen, senior partner, North American practice director, Kurt Salmon U.S., introduced his firm’s Brand Devotion Index (BDI). Based on multiple studies of more than 7,000 consumers, the index identifies three attributes that reflect consumers’ devotion to a brand:

  • Authentic: The brand has to be distinctive with a strong position on what it stands for.
  • Personal: Well beyond monogramming or personalizing products, the brand makes the consumer feel like the brand was made just for her or him.
  • Tribal: Consumers want to be with other people who feel the same devotion to the brand and what it represents.

According to a related white paper, creating that “extra, palpable bond” can drive a consumer to spend more with a retailer, advocate louder and be less motivated to wait for promotions. Ranking high on the index were Lululemon, Amazon.com, Cabela’s, Peet’s Coffee & Tea and Michael Kors.

At another session, Kevin Kelley, principal at Shook Kelley, similarly lamented that too much of retail is driven by price, variety, convenience, and even service and quality rather than around emotional connections. But his talk particularly focused on the tribal aspect.

While previously looking for status brands, consumers are now looking for group experiences, he asserted. But beyond experiences, it’s equally important to deliver a purpose and meaning. As an example, he pointed to the “shared values” that builds a “group identity” for fans of Harley Davidson, which stands for freedom and revolution.

Other businesses benefiting from forming communal bonds include Whole Foods; SoulCycle, the indoor cycling studio; WeWork, the shared-office startup; as well as shopping centers such as The Grove in Los Angeles and Third Street Promenade in Santa Monica.

“Humans are not only experience-seeking, they are meaning-seeking,” said Mr. Kelley. “And so retail has to move to become more participatory, rather than simply transactional.”

DISCUSSION QUESTIONS: Do you think that delivering intangibles such as “meaning” and “authenticity” are practical goals for retailers? What traits do you see emotionally-connected brands sharing?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"When you create that emotional bond, competitors have to work very hard to break it."
"Emotionally-connected brands have a philanthropic mission, which is furthered by the sales, production or unique corporate structure of the company."
"Authenticity and integrity must be earned and continually nurtured and exercised on a daily basis at every single customer touchpoint."

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38 Comments on "Do retailers need to work on making more emotional connections?"


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Tom Dougherty
Guest

Emotion IS the very definition of a brand. Everything else a retailer does is in support of the emotional reason WHY.

Rational and tangible benefits quickly become table stakes. Brand is emotional and answers the question of WHY a brand is here. The problem with retail is that everyone is process driven. They think they are retailers.

Black & Decker doesn’t sell drills. They sell holes.

Max Goldberg
Guest

Every retailer is a brand. And for a brand to survive, it must have a core story: What it does, for whom and why it matters. Everything a brand does should reinforce its core story, whether it’s creating an experience that supports the brand or promising and delivering low prices. The retailers mentioned in the article all do this well.

Phil Masiello
BrainTrust

The retail landscape has shifted dramatically. Price, convenience and selection are all attributes that can be satisfied by many different retailers. Engaging with your core customer in a way that benefits them is what leads to long-term retention.

A perfect example of this is the Apple stores. Apple did not build physical stores to grow sales as the primary driver. They built cool stores to allow people to look, touch and engage with their products in an environment that makes the user a part of the experience. It is a place to get your questions answered and problems solved. The bulk of Apple sales are still done online, but the stores enhance the pre- and post-sale experience and create that connection.

Contrast that with a Microsoft store that is functional and focused on selling the surface more than on educating and engaging.

When you create that emotional bond, competitors have to work very hard to break it.

Gene Detroyer
BrainTrust

Phil, A perfect example!

Mark Ryski
BrainTrust

To have the loyal following that brands like Apple, Lululemon or Starbucks have is something I suspect all retailers desire, but I don’t think this is something that can be conjured up in the boardroom. “Authenticity” and “meaning” are reactions that loyal followers/believers have to their beloved brands, and while there are ways that retailers/brands can act that will foster and encourage these feelings, I believe the alchemy of achieving this is largely beyond the control of the retailer/brand. That said, every retailer has the opportunity to create connections with customers — every interaction, in-store or online, presents an opportunity to build that relationship.

Ian Percy
BrainTrust

“I believe the alchemy of achieving this is largely beyond the control of the retailer/brand.” Could not agree more, Mark.

Charles Dimov
Guest

Being fully in the omnichannel retail space (order management systems), the BIG advantage of brands in omnichannel is that they can provide a service experience. It’s something that online-only retailers cannot provide. Recent reports are pegging omnichannel retailers as the big winners in Holiday 2016 season. Why? Part of it is because of the instant gratification effect (I want it now). A big part of it is the intangibles of the great atmosphere, polite and helpful service, opportunity to offer opinions/expertise, easy returns environment and so on. These intangibles are REALLY the drivers of omnichannel.

Ken Lonyai
BrainTrust

Emotional connection is absolutely a means to strengthen brand, sales and revenue while alleviating most woes of physical retailing, but it’s extremely hard to achieve.

Most retailers have a hard time finding a balance between digital and physical retail or even getting digital retailing right and those challenges are more “tangible.” Emotional connectivity falls into the domains of branding and place which are more qualitative and formidable by nature. Emotional connection is really the pinnacle of the alignment of the brand’s offering/experience with consumer wants/needs. Contriving such an alignment doesn’t work (maybe very short-term) so the authenticity factor is inherent if the connection is made. The consumer’s path to emotional connection is delight — fulfillment — sharing, which speaks to Kurt Salmon’s Personal and Tribal factors.

Ultimately, a brand has to offer tangible value, be true to their vision and mission and execute on it very well at a gut, not corporate, level. When they do, they will attract supporters that share their goals and advocate for them.

Ian Percy
BrainTrust

“Contriving such an alignment doesn’t work” – exactly!

Jasmine Glasheen
BrainTrust
Jasmine Glasheen
Principal Writer & Content Strategist, Jasmine Glasheen & Associates
3 years 9 months ago

Emotionally-connected brands have a philanthropic mission, which is furthered by the sales, production or unique corporate structure of the company. Connected brands are often led by a spearhead that customers can relate to or look up to. The fourth wall of fame and bureaucracy is en route to being has been eliminated: customers want to interface with company leaders through social media. Q and As are a great way to provide this interaction. Accessibility is key.

Meaghan Brophy
BrainTrust
Meaghan Brophy
Senior Retail Writer
3 years 9 months ago

Retailers need to figure out what “meaning” and “authenticity” mean for their brand specifically. Many retailers deliver an emotional connection through charity work. For example, Toms and Warby Parker donate a pair of shoes or glasses for every pair that is purchased. These donations create a greater emotional connection between consumer and brand because shoppers can feel good about their purchase.

Independent retailers have an advantage when it comes to being “authentic” because they are able to easily build personal connections to their community. They may not make large-scale donations in the same way a national brand would, but they can have a personal relationship with their customers and build “meaning” by playing an active role in community events.

Overall, emotionally connected brands are philanthropic, have a backstory and are keenly aware of who their shoppers are and their interests.

Ian Percy
BrainTrust
Oh my. According to someone’s “BDI” assessment having an emotional, authentic and personal connection is really key. Another person “lamented” that retail has been too much about price and the bottom line rather than emotional connection. Heck, I’m feeling misty just writing this. The real purpose of this sentiment, this “extra, palpable bond?” Consumers will spend more and won’t wait for specials. Isn’t that what, a second ago, we were “lamenting?” Am I the only one feeling the phoniness in all this? And that whole “tribal” intent is not something you can strategize. It happens or it doesn’t as a result of something far more ethereal than a customer love campaign. You can’t make a tribe happen any more than you can make a video go viral. In fact, the more you try the more you seal its doom. Indian Motorcycles is a better story than Harley. It had been dead for what — 40 years or so? And yet, spiritually, the “tribe” survived. That did not happen because of a corporate marketing strategy session.… Read more »
Bob Phibbs
BrainTrust

Indeed, Ian!

Ben Ball
BrainTrust

I would vote this one “up” multiple times if I could.

Ralph Jacobson
BrainTrust

Think about the brands mentioned in the article as well as several other prominent ones. People select those brands first for their shopping missions because of the personal sentiment they share with the brands. This sentiment drives real loyalty … not the traditional “frequent shopper”-style loyalty programs. Retailers can most assuredly leverage this by defining what they feel their brands should mean, as opposed to what their brands may already mean to consumers. Retailers can evolve the brand meaning and therefore value to shoppers. This along with the human touch are the last true differentiators to employ.

Shep Hyken
BrainTrust

There are several ways that a retailer can compete today. Service, price and convenience. (I assume the retailer has the selection of merchandise the customer wants.) However, there is one other way that can either align with or trump any of those three, and that is “relationship.” That’s the emotional connection a customer has with the retailer. While the customer may start out doing business with a retailer because of the service, price or convenience, as soon as there is an emotional connection that potentially trumps the other three. A good relationship can overcome deficiencies in service, price and convenience — at least for a while. The retailer is still going to have to remain somewhat competitive for the reasons the customer chose to do business with the retailer in the first place.

Ori Marom
Guest

Consumers are willing to pay price premiums to retailers for multiple reasons. For example, convenience or trust. It may be true that a price premium can be collected based on emotional connection. In that respect, of course, it is a good idea for retailers to invest some effort in this (rather limited) aspect of brand equity.

However, if stores do not dare to charge a premium for the concrete advantages of convenience and immediate delivery why would we expect them to charge a premium for the rather vague advantage of emotional connection with the brand? Today, not too many retailers are likely to do that.

An attractive brand identity is nice to have. However, I think that the crisis of retail today is deep and merits bolder and more radical solutions. What is needed is a comprehensive redefinition of the role of a store in a supply chain and how it should compete.

Lee Kent
Guest

Today’s consumers want brands to mean something to them in order to get a portion of their wallet. Whether it is supporting a cause that the consumer is passionate about or creating an experience that the consumer will come back for. In any case, it is emotional.

Emotionally connected brands seem to have several things in common. They have and know their brand story from the board room to the stores and they create a culture around it. Also, and most important, their focus is on serving the customer before they sell.

For my 2 cents.

Michael Day
BrainTrust

In the January/February issue of Retail Leader is an interview Mike Troy did with my old boss Craig Jelinek, CEO of Costco. As Jelinek and his LT grapple with just how to evolve Costco’s highly successful club membership model to meet the growing demands of Millennials, and technology empowered consumers in general, Jelinek has some interesting comments that maybe speak to “brand authenticity” and foundationally dealing with the complications of modern retail.

“The business evolves, we understand that, but you don’t lose sight of your core values, which are taking care of your people, taking care of the member and bringing in hot merchandise at great prices. As long as you continue to create quality and value you are going to be around for a long time … Most companies that were great at one time lose sight of that, and all of a sudden you become irrelevant.”

Bob Phibbs
BrainTrust

Mary Tyler Moore passed away yesterday. Her brand was defined by two roles and ultimately when people think of her they smile. The human connection she had with her other actors was genuine and fun. The human connections retailers’ employees over the years have made are what drive a brand. Sorry, an “authentic voice” by charity work or an algorithm that spits out “authentic” messages is not the same. Cutting-edge authenticity is hiring people from a variety of experiences, training them well and rewarding them. Do that and you don’t have to ask such questions.

Jeff Sward
BrainTrust

Emotion = margin opportunity. Emotion is relevancy, the edge, the moat, the differentiator, the reason to buy versus continuing to shop. Emotion is the reason to come back or stay away. Lack of emotion = race to the bottom, competing on price. Lack of emotion = irrelevancy.