Left behind | What can we learn from Debenhams & Arcadia?
The recent collapse of two of the UK’s largest high-street retailers highlights just how important it is to have a differentiated and relevant brand proposition.
2020 has undoubtedly been a challenging year for organisations around the world. The COVID-19 pandemic and the resulting shift in consumer behaviours has had a huge impact on the way businesses compete and sell. In the UK, two of the best-known and largest retailers, Debenhams and Arcadia Group (owner of brands including Topshop, Topman and Miss Selfridge), have announced that they are likely to close all stores in the coming months. Both cited pendemic-related lockdowns and a failure to develop an online presence quickly enough as key reasons for this, but is there more to it than that?
It’s fair to say that whilst the COVID-19 pandemic might have accelerated shifts in consumer behaviour, leading to the demise of organisations that failed to adapt, it’s not entirely to blame. Instead, many of those organisations just weren’t relevant in the minds of their target market anymore. Simply put, they didn’t have a compelling proposition and they weren’t positioned well.
Good value propositions form the basis of good brands
At its simplest, a value proposition explains what your organisation delivers to others. But good value propositions do more than just summarise the key features of a product or service. They go on to identify what benefits these provide, which is key because that’s what you’re really selling to people, and what a good brand tries to encapsulate.
A value proposition on its own, however, isn’t enough to guarantee success. Often referred to as positioning, you also need to understand who you’re targeting and how you want them to think about your brand. In the case of Debenhams and Arcadia, there were clear issues with both their proposition and positioning, meaning that they were always going to be struggling for survival in the long-term.
You can’t please everyone
Many organisations often make the mistake of thinking that they can target broad groups with widely varying needs and wants. Unfortunately, that’s not the case, and being specific about who you want to appeal to will pay off significantly in the long-term. Developing a “persona” of your ideal customer, down to their name, background, and interests, helps to focus people’s minds and make sure that everyone in your organisation is doing the right thing to support your brand. This isn’t to say that people who don’t fit that persona won’t buy from you; they will. They’re just a secondary audience, and you’ll often find that the differences between groups aren’t quite as big as you’d think.
For Debenhams, it wasn’t always clear who the ideal customer was; with such a wide range of goods on offer, from perfume to coffee machines, to slippers and even travel money, trying to define a user persona would have been difficult (but not impossible). This was even evident in their marketing material, which included images of virtually all age groups, each of which have very different needs and wants. Trying to target them all at the same time is difficult, and unlikely to work.
This is a problem that extends beyond Debenhams, and it’s interesting to see how other department stores are trying to adapt and change their brand image in response. Will their efforts be successful? Only time will tell, but one thing’s for sure; Debenhams simply wasn’t specific enough.
Arcadia was arguably clearer on who its various brands were targeted towards, generally focusing on younger people. These groups, however, are notorious for having tastes that change quickly, and they’re more than happy to try out other brands, particularly if they can’t get what they want. Which brings us on to the second problem…
You’ve got to sell things your customers want
For any brand, understanding what your target market needs and wants is essential if you’re going to resonate and connect, and in the fashion industry, specialists often think about trends 6 or 12 months into the future.
This is about more than just the basics; people don’t just make choices against functional criteria like aesthetics and quality, but also on more meaningful and fundamental beliefs and principles that they hold. For example, consumers are increasingly becoming aware of the use of cheap labour and sweatshops, and many brands have taken a stand against such practices. Similarly, in the cosmetics industry, a growing number of brands no longer test on animals. Understanding these guiding principles is key to building a brand which stands the test of time and develops a loyal base of customers.
Whilst Arcadia might have been good at forecasting fashion trends, it was less clear on the more fundamental principles that guide their target markets. They made an effort in recent years with collections aimed at reducing environmental impact and waste, as well as supporting charitable causes, but younger consumers are increasingly sceptical, and to many, their efforts came across as insincere. As many brands are finding out, it’s not enough to just say that you care; you must actively show that you believe it’s the right thing to do through your behaviours and actions.
For Debenhams, it was never clear what needs and wants they were answering for. Recent press releases spoke about consumers wanting a “leisurely experience” when they shopped in-store, but they never really seemed to go deeper than this. What was driving this need? Did people feel stressed and want to get away for a few hours? Were they just bored? All brands provide an experience in some form, but it’s their ability to make that experience relevant to the user which sets them apart. You can only make something relevant if you understand what’s driving the need, and Debenhams simply didn’t get to know their customers well enough.
Where do you sit in people’s minds?
When you think of certain brands, you can instantly place them into a category. Apple sells premium technology products, while McDonald’s sells fast food that’s affordable. It’s this ability to clearly place products and services into a categories that means people can easily remember the brand in the future, and quickly compare it to others.
Going back to the example of Apple, when someone says iPhone, people instantly think of technology, and more specifically mobile phones. When compared to other products, they know that the brand is premium and prides itself on style and quality. This didn’t happen by accident; Apple have meticulously crafted this positioning through their brand, and by then ensuring that they deliver consistent messaging and experiences which support it.
Neither Debenhams nor Arcadia were specific enough in how they positioned their products and brands. Debenhams arguably had this problem because it sold such a huge variety of products, but even then, it never managed to successfully carve out a niche category in the way that John Lewis, for example, has been able to. As a result, people just didn’t associate it with anything, and many people often said they’d “try Debenhams” when looking for a product rather than specifically going there as a first port of call.
Whilst Arcadia did have distinct brands sitting under it, they too failed to carve out a specific place in people’s minds, with a wide range of items sold which all seemed to fit into slightly different categories, ranging from essentials like underwear to “statement” pieces, and then shoes and accessories. Add to this the fact that some of the brands sold similar items to one another, and that in many of Arcadia’s stores those brands occupied the same floor space, and it’s easy to understand why consumers got confused about how to categorise them.
Make it easy for people to choose you
People buy things that answer for specific needs and wants. Clearly communicating what the benefits of your products and services are, both for individual products and services, and at a top brand-level, and then making them relevant to your target market’s needs and wants, is how you get people to choose you.
As we mentioned previously, people’s needs and wants go deeper than just the functional requirements. It’s not enough for a coat to just keep you warm; it’s also got to deliver emotional benefits too. It could make you feel elegant and fashionable, which ultimately increases your confidence and enthusiasm to go out and be seen by others. This might sound over the top but understanding the real emotional and self-expressive benefits that your products and services deliver helps you to create a brand which more easily connects with people and builds loyalty.
Whilst some of the products sold by Debenhams and Arcadia did indeed have compelling benefits, they never consolidated them into something meaningful at the brand level. This isn’t to say that it’s just about products or services; some organisations use excellent customer service and experience as a benefit in itself. A quick look at both brand’s online reviews, however, shows that neither was thought of highly from that perspective.
Similarly, some brands use loyalty schemes as a benefit, rewarding customers who return and giving them the satisfaction of seeing a points balance increase. Debenhams offered multiple loyalty schemes (which could be seen as confusing in itself), but they weren’t billed as being a real stand-out benefit, and a quick read over the features shows that they were similar to most other rewards schemes.
When an organisation can’t quickly and clearly communicate the benefits of its products and services, and the experience that surrounds them, people are much less likely to choose them. Instead, they rely on people stumbling across them by chance, and with COVID-19 related lockdowns that’s become increasingly unlikely for physical stores, whilst the sheer number of better positioned online retailers makes it much less likely for websites too.
What makes you different?
Until recently, John Lewis famously said that it was “never knowingly undersold.” And even though they’ve dropped that promise, they still are fairly well differentiated against their competitors in terms of service, support, and the overall shopping experience. This isn’t to say that they’re not struggling — their most recent updates suggest that they are — but it highlights how important it is for a brand to communicate what makes it different.
Unfortunately for both Debenhams and Arcadia, the big things that made them different weren’t seen as positives. Debenhams stores were often tired-looking and in need of maintenance, whilst Arcadia’s brands were seen as selling more expensive versions of clothing offered by online retailers.
Again, we’re not saying that everything the two brands did was either bad or not unique, but that when it came down to it, those things didn’t truly matter to their target market. And as with brand benefits, if it’s not relevant to people, it can’t help you stand out and it might as well not exist. In fact, you’re effectively paying more than necessary to provide something that people don’t really want.
Where do we go from here?
It’s clear that the pandemic has had a huge impact on brands around the world. And whilst both Debenhams and Arcadia have both blamed it (along with a failure to offer a compelling online proposition) as a key reason for their failure, it’s hard to argue that fundamentally, their current propositions simply weren’t compelling enough. Regardless of the pandemic, they’d have had to make major changes to their brands to survive in the long-term.
Whether other brands follow in their footsteps, only time will tell, but these failures should be a reminder of just how important it is to get your proposition and positioning right for long-term success.
Find out more
Click here to learn more about how we help brands to develop stand-out propositions and then position them for success in the long-term. Our value proposition and positioning advice forms part of our Foundations services, which deliver innovative strategies to organisations, no matter what market they’re in or the challenges they face. You can read more about our Foundations services here, or contact us for more information.
Originally published at https://www.panasmcinnes.com on December 17, 2020.
