Retailers urged to be branding beacons

Phil Levine

Tuesday, May 23, 2000 | 10:27 a.m.

Edward Whitefield says retailers around the world would do well to heed the advice of the late Bing Crosby.

Whitefield, chairman of London-based retail consulting firm Management Horizons Europe Ltd., told delegates to the International Council of Shopping Centers' convention Monday the late crooner's song "Accentuate the Positive" provides sage advice in "today's brave new world of retail."

Whitefield said Crosby's 50-year-old lyrics about the importance of "accentuating the positive, eliminating the negative and not messing with Mr. In-Between" are important in today's shifting consumer market.

"As a retailer, you need to be a branding beacon and fall into one of three formats," he said. "You have to be either an extra value champion such as Wal-Mart, a category value leader such as Home Depot or a lifestyle retailer like the Gap.

"You don't want to fall in-between, and be squeezed by (competitors) in one of those categories as well as the world of e-commerce. I think Toys R Us provides a classic example of a retailer who found itself caught in-between."

To support his theory, Whitefield cited Toys R Us' dramatic fiscal reversal.

"The company made $844 million in 1995, but lost $132 million by 1998," he said.

Whitefield's presentation was part of the annual ICSC gathering at the Las Vegas Convention Center.

Today's smart retailers recognize that technology is forever altering the way consumers view shopping, Whitefield said.

"In retail, the WWW of the worldwide web stands for 'what we want, when we want, where we want it,"' he said. "That's one reason we expect that by 2005, U.S. e-tail (online) sales will surpass the $100 billion mark.

"In addition, two-thirds of U.S. homes will have personal computers -- and likely Internet access -- by the end of next year."

The concept of "multi-channel" retailing -- using a combination of e-commerce marketing and more traditional methods -- is also a critical ingredient in retailing success, said Whitefield.

"Victoria's Secret is an example of how that strategy can succeed," he said. "Their net-cast last year was seen by millions of people -- some of them even women -- around the world."

Whitefield brings with him an international perspective on retail; his firm tracks and evaluates consumer shopping habits throughout Europe, and has offices in five European countries.

Still, Whitefield said that because of their size and scope, U.S. retailers are setting the pace for the industry worldwide.

"Wal-Mart, for example, has become a true worldwide retailing juggernaut," he said. "With $165 billion in sales, they have evolved into a true global player.

"That (sales figure) exceeds the combined gross domestic product of 15 countries around the world."

Whitefield said that San Francisco-based apparel giant the Gap Inc. offers "perhaps the best example of branding" by a major retailer.

"Their various brands, Old Navy, Banana Republic and the Gap, each play to a different market and have strong brand recognition," he said.

International retailers are following suit, hoping to establish their own global brand name recognition.

"(Home furnishing giant) IKEA is a good example of a retailer that is rapidly growing into a global presence," said Whitefield.

"They now have about $7 billion in sales, and each store is averaging about $40 million a year (in sales)."

Demographic shifts also necessitate a change in retailing strategies.

"There will be more older people than ever over the next several years," Whitefield said.

"For example, by 2020 there will likely be about 33 percent more people over 65 (in the U.S.)."

European retailers face their own evolving demographics.

"In Europe, the demographics are also changing, and single males now comprise the fastest-growing (type of) household there," said Whitefield.

"That raises several (retailing) issues, and may also raise the question 'is this the end of civilization?"' he said with a smile.

With an eye to the future, Whitefield said retailers must adhere to five basic marketing principles if they hope to survive the changes in consumers' shopping habits.

"Our research shows that there are some basic principles required to succeed," he said.

"Retailers must clearly identify their market, surpass customers' expectations, deliver both choice and value, utilize multi-channel marketing, and exploit technology to their advantage.

"A successful retailer will accentuate their positives, eliminate their negatives, and -- as Bing used to say -- avoid all else in-between."