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Your difference makes THE difference to your revenue

Over the years I've been lucky to have worked with many of Australia's top brands, Myer, Freedom, Optus to name a few. All highly successful over the years and all now facing the dilemmas of the digital age. While Myer as a department store has failed to compete against the onslaught of digital stores offering free returns and is struggling to find its relevance, the question has to be asked - are Australian businesses choosing markdown over marketing and losing sight of their revenue potential by not going back to basics?

In a world where digital demands we sell in 30 characters and a 15 second window, have we chosen to push price as a means of conversion, putting at risk the revenues we strive hard to maintain?  Freedom is perhaps a perfect example of this.

I worked with Freedom when it was first launched, when it was competing against Ikea as providers of well priced, and in many cases flat-packed, furniture. Their key differentiator was value fashionable furniture, but it was also about how to style a room at a good price. It was innovative, bringing fashion into furniture and underpinning the 'look' with a value proposition - Style an entire room for $X.00. Today although they have pulled back a bit from this strategy, they have almost trained their customers to wait for a sale. A slippery slope. One they have obviously realised and one that is difficult to reverse.

And Optus, once a challenger brand who lead the market with product innovation and exceptional service, has now lost the meaning of the YES it took ownership of so many years ago. As a marketing manager we were proud of our innovation and the challenge we bought to Telstra. Remember wanting that handset so you could get access to games and cool content and then finding out you could pay off the phone over the course of your contract? That idea was mine and was key to getting handsets into users hands so we could sell them data back in the WAP days. It worked and these days we can get whatever handset we want but the actual product underneath has almost become homogenous.

Would you believe the YES came from a customer care strategy of being helpful and supportive- saying yes instead of no? Probably not.

Digital has undoubtably changed the way we consume media, but it has not changed the fundamentals of marketing; the need to relate our sales messages to ours and our clients core values. It has not changed the unique selling propositions or our brand differentiation. It is also not the only channel available to us for communication.

Is it that the pressure from media to deliver short and sweet messages  that has made us lazy? Is it that marketers are now focusing on digital so much, they're forgotten the art of real communication and strategic differentiation to meet market needs? Or is it that the fundamentals of marketing really are dead in 2019?  The latter I simply don't accept but it may well be being overlooked. 

In a period where retail sales are down, and have been declining for a number of years, the approach from many retailers has been to focus on price to grab marketshare. CEIC Global data shows the picture of the past five years and it isn't pretty. And even Business Insider data shows when normalised, growth we thought had been achieved over the past few months was actually negative growth.

Ceic Austrlian retail trends 5 years
Business Insider 12 month retail sales volume

While I am not suggesting the retail trend can be stopped. Is it possible for some of our best known brands to survive by reinventing themselves? By not focusing on price to get people into store, but by promoting quality, service, product range, innovation, style......And then promoting these benefits by appealing to their end users core values?

Take Apple for example.

A company who rarely offers sales, who is more expensive than many of the competitor brands Microsoft, Lenovo, HP but who is highly aspirational and desired by Gen Xers, GenYers/Millennials and Gen Zers. Why? Is it a better product?  Does it do more than it's competitors? The key here is aspirational. Because they use the fundamentals of good marketing - great sales messages, beautiful creative and well designed, well staffed stores filled with staff who live and breath their product. Every element of their communication has synergy from website to ads to store. From the experience in-store to the packaging of the product, the feel is premium. And we happily pay for it.

Apple sales message example

The Point

While they are hard to find, there are other examples of companies doing marketing well. Not surrendering to the forces of price sensitivity. The challenge is our ability to get back to basics and create our own point of differentiation against our competitors to drive brand value and ultimately our own pricing structure. While I understand the pressures of retail and the need to meet revenue targets to survive, price is't the answer.

Sounds like finding your difference could make THE difference to your revenue potential.

About the author

Deep See Marketing

Deep See Marketing

Cathryn Irvine is a marketing specialist and the founder of Deep See Marketing. With experience ranging from Telco to retail and digital to direct marketing, Cath's creative foundation has delivered significant revenue return for her clients.

Cath is also certified in digital marketing and Google analytics