Developing a brand of electrical appliance retailer

Reg Moses The Communications Council Advertising Effectiveness Awards, 1992

Title: Author(s): Source: Issue:

Developing a brand of electrical appliance retailer Reg Moses The Communications Council Advertising Effectiveness Awards, 1992

Developing a Brand of Electrical Appliance Retailer

Reg Moses BACKGROUND In 1961 a group of service technicians and electrical retailers branded together to take advantage of combined buying power. They called themselves 'Retravision'. From such humble beginnings Retravision has grown to become the biggest electrical specialist in the country with well over 470 stores, turning over in excess of $720 million per year. This fact at the time of appointment of the agency was virtually unknown by the Australian consumer. Retravision is not strictly speaking a franchise or a licence to use the name. There is a Retravision Company in each state, and every Retravision store owner is a shareholder in that state company. Directors of the State Company are in turn elected by the shareholders from their own ranks. The chairman of each state board becomes a director of the national company. Retravision Australia, the national company, owns the Retravision logo, and does all the National deals with all the national suppliers. The concept behind Retravision has not changed since 1961 - that is, to give the small, owner-operator type of retailer the chance to combat the prices of the chains and department stores. In November, 1989 a meeting of directors and shareholders of the NSW Company expressed concern as to the strength of the Retravision image and the effectiveness of the then current mix of advertising. Historically over $4 million a year had been spent on retail television and catalogue advertising featuring product and price. The agency was briefed to examine whether there could be a better way. Strategy development Our analysis of existing research and initial market observations raised a number of questions. 1. What is the role of retail advertising in this segment, and how does retail advertising effect consumers? 2.TowhatextentwasRetravision

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understood? top of mind? 3. Do Retravision shareholders support the same Retravision or merely see it as a buying facility, paying only lip service to the brand? Consumer perceptions A research project conducted by Retravision in Sydney and Newcastle in September, 1989 confirmed our hypothesis that consumersunderstanding of what electrical appliance retailers stand for is poor. Despite combined retailer advertising spends of $40 million p.a. in NSW, advertising recall and brand comprehension are extremely low. Consumer attitudes to brands of retailers tend to be almost entirely based on the shopping experience and limited expectations exist as to the benefits of one retailer versus another (Table 1). TABLE 1: RANKING OF FACTORS INFLUENCING LIKELIHOOD OF VISITING AN ELECTRICAL STORE
Competitive prices Informed advice Demonstration for more complex appliances Efficient after sales service Friendly service Topbrandnames Installation service Wide range of brand names Wide range appliance types Gooddisplays Easy parking Good store layout Specialist electrical store Convenient to home/work Open long hours Fast delivery After hours delivery Part of a chain Run by the owner
Source: Bennett Research, September, 1989.

16.08 14.99 13.54 12.83 12.72 11.72 11.04 10.72 9.76 7.93 7.55 7.54 7.54 7.25 7.18 7.08 6.39 4.48 3.35

Rather than confirm these attributes as key advertising copy points, we interpreted this research data to mean the electrical retailer market was a virgin market for branding. Key attitudes having been determined solely by the shopping experience. Most retailers, due to their intense concentration on price/product promotion fail to establish clear identities for their stores and give no indication of clear benefits of shopping at that retailer. In fact evidence exists to suggest consumers find it very difficult to differentiate between brands of retailers, their communications being seen as one long blur. Qualitative research conducted by Keig & Co confirmed consumers who are not themselves in the market for an electrical appliance view electrical appliance retail advertising as loud, brash and irritating. The role of retail advertising Over $40 million a year is spent on electrical appliance retail advertising in NSW alone. This money is expended because by and large retail advertising works!

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It follows that in the absence of a strong brand image, price/product promotion is fundamentally important to stand a chance to get on the shopping list. But the key issue that limits the effectiveness of retail advertising is that with electrical appliances consumers are only in the market infrequently (Table 2). TABLE 2: INCIDENCE OF SHOPPING FOR AN ELECTRICAL APPLIANCE
Category Domesticappliances(Over$100) Domestic appliances (Under $100) Television/Video/Sound equipment Radio/AudioEquipment(Under$100)
Source: ABS Survey of consumer opinion 1987.

% of People Buying inOneYear 10.5 5.0 7.5 5.5

Crucially, at any given time there is only a small finite group interested in retail price promotion (Figure 1). For the bulk of consumers, retail advertising passes unnoticed and certainly unbranded. The position of Retravision We conducted a quantitative study to determine Retravisions top of mind awareness and the level of understanding that existed for Retravision in NSW.
Awareness

Which shops that sell electrical goods can you name (Table 3)? TABLE 3: AWARENESS
Shop Grace Bros David Jones NormanRoss K-Mart Tandy Harvey Norman Chandlers BingLee % of Mentions 95 72 55 28 22 16 12 11 Venture Retravision Brashs DickSmith Target BBC Others Dont Know 11 9 9 8 7 4 41 10 % of Mentions

Source: January 1990 Data Shopping Mall Survey 200 respondents aged 30-45 years.

Claimed purchase

Thinking of electrical goods youve bought in the past 12 months, which shops did you buy them from (Table 4)? TABLE 4: CLAIMED PURCHASE
Shop Grace Bros DavidJones K-Mart Norman Ross Chandlers Bing Lee HarveyNorman
4

%of Mentions 45 14 13 10 9 7 6

%of Mentions Venture Tandy Retravision Dick Smith BBC Brashs Others 6 5 4 4 2 2 31
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Target Bing Lee

6 11

HaventBought

67

Source: January 1990 Data Shopping Mall Survey 200 respondents aged 30-45 years.

Despite Retravisions accounting for over 20% of all electrical goods sales in NSW, only 4% of consumers could actually remember they had purchased their goods from a Retravision store.
Brand comprehension

What does Retravision do (Table 5)? TABLE 5: BRAND COMPREHENSION

Sell electrical goods Sell TVs Rent TVs Rent & sell TVs Manufacturer Distributor Dont Know
Source: January 1990 Data Shopping Mall Survey 200 respondents aged 30-45 years.

% of respondents 45 4 20 7 4 5 16 ) ) ) ) ) ) 55

Only45%ofrespondentscouldnamethebusinessRetravisionwasin,despiteaninvestmentofover$4millionp.a.inretail advertising. Strategy development We hypothesized that retail advertising makes Retravision highly relevant to a small group of purchasers, but basically fails to impact on the bulk of the population. We accepted that such advertising is vital to the continued success of the group because it does generate store traffic, but retail advertising is limited in its ability to create a brand identity for the advertiser. So we proposed that the retail advertising account be left with the incumbent agency and that BAM produce an additional advertising component. One which would create an image for Retravision. One which would ultimately ensure that when anyone is thinking of buying an electrical appliance Retravision is the first store that springs to mind. We agreed the following communication objectives for the image advertising. To make Retravision relevant to consumers even when they are not in the market for an electrical appliance. This in turn would build higher awareness and understanding of Retravision. Which would: Make Retravision an automatic choice for the shopping list. Make the existing retail advertising more effective. We identified that, with over 470 outlets Australia wide, Retravision stores are actually part of Australias largest electrical appliance chain. The strategy

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Research indicated that if we communicated that Retravision was the biggest, consumers would naturally deduce that Retravision had competitive prices and a wide range of product. Size was the security blanket that would communicate that Retravision is knowledgeable about what it sells. The creative rationale
1. 2. 3. Break through the clutter of retail advertisements, including those that seek to 'build an image' at the same time. Produce highly visible and humorous work which will capture the imagination of the Australia public. Single-mindedly position Retravision as the biggest retailer of electrical appliances in Australia.

In April, 1990 a campaign based on 3 x 15-second television commercials featuring oversized electrical appliances and the line 'I said the biggest retailer of electrical appliances - not the retailer of the biggest electrical appliances' went to air in Sydney and NSW provincial markets (Figure 2). In June, 1991 two additional 15-second executions featuring a giant music system and TV were added to the mix. The imagecampaign was placed on Sydney and NSW Regional TV Networks from April 1990 to December, 1992. In this time, normal retail TV advertising and catalogue distribution was maintained. The results
Attitudinal

The campaign is being tracked regularly against key advertising objectives (Table 6). TABLE 6: KEY ADVERTISING OBJECTIVES
Store of First Choice indexed rank Spontaneous Awareness index rank
Source: Keig/Newspoll Tracking.

April, 1990 100 No. 3 100 No. 3

July, 1992 184 No. 1 161 No. 1

By the fourth quarter of 1991, Retravision had achieved No. 1 position as store of first choice and the highest spontaneous awareness for an electrical appliance retailer (Figure 3 and Figure 4). Turnover Analysis of Retravisions $ turnover vs the total market for electrical appliances in NSW shows the power of the image campaign in gaining share for Retravision. This has been achieved with no significant variation in the number of stores in NSW (Table 7). TABLE 7: RETRAVISION AVERAGE STORE NUMBERS P.A. NSW
Retravision Average No. of Stores NSW 1990 120 July-Dec, 1991 119 1992 122 Total
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1990 Growth in Retravision T/O $'s* Total Market growth $'s*

Source: * ABS Retail Trade Data.

1991 +9% +4%

1992 +8.8% +6%

Increase +34 +14

+13% +3%

Advertising efficiency The high cut through of the 15-second approach has enabled a reduction in the total Retravision media spend in both image and retail categories (Table 8). TABLE 8: RETRAVISION NSW ADVERTISING EXPENDITURE TREND ($ MILLIONS)
Media Image Media Retail plus catalogues TOTAL SPEND 1990 0.90 4.70 5.60 1991 0.34 4.20 4.54 1992 0.24 3.60 3.84 Cum. 1.48 12.50 13.98

SUMMARY Retravision has recorded a 34% cumulative increase in turnover in one of the toughest retailing environments since the 1940s. That growth can be traced to a three year campaign designed to make Retravision the store of first choice for electrical appliance shoppers. All other elements of the Retravision NSW market mix - pricing, in store promotions, catalogues and traditional price product advertising - remained the same. In achieving this goal, the agency has developed a model which provides an explanation for why retail advertising works and, of equal importance, what are its limitations in brand building. By diverting 10.5% of Retravisions media spend from classic price promotion to image/awareness building, we have made the total advertising expenditure far more efficient.

NOTES & EXHIBITS

FIGURE 1: INTEREST IN PRICE PROMOTION

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FIGURE 2: RETRAVISION, 15 SECS. TELEVISION

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FIGURE 3: STORE OF FIRST CHOICE

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FIGURE 4: UNAIDED AWARENESS

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