The new advertising landscape

Retailers have produced their fair share of catchy advertising slogans - ‘Every little Helps’, ‘Find it, Get it, Argosit’, ‘You can do it if you B&Q It’ - and are skilled at devising simple catchphrases that make their message crystal clear.

But what retailers haven’t always done is embrace the more creative, abstract side of advertising. Traditionally, their adverts have often emphasised low-price ranges or seasonal Sales. This is in stark contrast to those from the automotive world, for instance,which aim to capture the imagination, incite emotion or provoke reaction.

Some retailers are starting to take a new approach, though. As Dixons head of brand communications Benjamin Kaye says: “Advertising is changing to reflect changing consumer needs.”

Roaring trade

Ikea is one retailer leading the way. Since 1991, it has picked up 50 individual awards at global advertising festival Cannes Lions. Next week, though, it will pick up the prestigious advertiser of the year award - a gong thatcelebrates creativity and recognises long-term achievements. Cannes Lions chief executive Philip Thomas says Ikea’s award marks a change in retail advertising. “Retailers are generally starting to trust their agencies to try new things,” he says.

The development of digital technology and the resulting change in customers’ purchasing journeys, as well as a ferociously competitive global market, means retailers have to do more to stand out. “Marketers need to be increasingly innovative to stay one step ahead,” says Waitrose head of marketing communications Sarah Fuller.

Asda head of advertising Jamie Sohosky says the retail sector is well suited to a more creative approach because of the connection customers feel to their favourite shops. “Retail is a very emotional business,” he says. “When you talk to customers they have memories of the first time they went to certain shops or bought certain products.There’s an opportunity to tap into that.”

Asda’s latest campaign and product range, Chosen by You, is the grocer’s attempt to lift its brand and connect with customers. It carried out taste tests with 350,000 customers to develop the range and says the feedback it gets from people on Facebook is invaluable. “We’re really excited about a more brand-led approach to advertising,” says Sohosky.

But while creative, brand-led advertising might get people talking and win awards, what matters to retailers is that advertising leads to cash in the till. Jo Lyall, head of integration and partnerships at media agency Mindshare, says: “A good advertiser in retail is one that drives sales. If it’s not doing that, it’s not doing its job. That’s what leads a lot of retailers down a more direct route with their messaging.”

Furniture retailers, for one, use a very direct message based on sales and price because it tends to drive footfall into stores at specific times of the year. Grocers, too, compete ferociously on price and tend to reflect this in their advertising.

The concerns are valid, and for some there will always be a role for price-based advertising. Kaye says that while Dixons’ spending is shifting towards brand advertising, there will always be certain times of the year when it knows people will look to buy electrical goods, and wants to drive footfall or web traffic.

He says: “We’re hard-nosed retailers. While we want to be engaging, I’m wary that if you start to get very brand-led and creative, the message that the customer takes away won’t be what you want it to be.” Kaye says that the company’s more brand-led, engaging advertising - such as its Star Wars campaign for Currys and PC World in 2010 - does increase sales, but in the short term the uplift is not as much as one that is promotion-led.

Creative flair

In the future, though, creative campaigns will play an increasingly larger role in capturing attention and generating sales. The barrage of information available on the web means consumers will react best to companies to which they feel an immediate and emotional connection. Clear, emotive brand messaging that can be translated across different channels will be what works. “It’s a fallacy to say creativity doesn’t sell,” says David Roth, chief executive for The Store, WPP’s retail practice. “Creating a strong emotional bond with consumers is part of creating a sustainable business.” And in a cluttered communication environment, creativity will be more important than ever.

This is leading to a shift in the practical methods retailers need to employ to make an impact. For a start, advertising is no longer restricted to print and TV. As Simon Hathaway, chief executive of Saatchi and Saatchi X for EMEA says: “The whole world has changed and everyone is trying to reinvent themselves around that new world”.

The advent of digital means there are more channels that each require the creation of strategy and content. In addition, shoppers want entertainment, a level of participation and interesting content that’s relevant to their own lives. “Advertisers are more interested in telling stories across different platforms. It’s more of a journey,” says Lyall.

These new challenges mean new skills are needed. Advertising skills now are different to even five years ago, with a need for people who understand how to build communities and who can work with the blogging fraternity. Those who can create entertaining content are in demand, and the planning and execution of advertising campaigns is more time consuming. Relationships with consumers need to be nurtured and monitored. It’s no longer a case of releasing an advert, sitting back and waiting for the results - campaigns are an ongoing task.

Finding the formula

While advice and best practice is emerging, there is no secret formula for success. Success stories so far have been down to experimentation and a process of discovery. “It’s about adaptability and experimenting, and never thinking you have a model that works,” says Fuller. “We always have to be evolving our approach to marketing to reflect the pace of change in Waitrose’s customers.”

Kaye, meanwhile, says the optimum mix of brand and price advertising will differ from one retailer to the next. “It’s about understanding the customer journey, which is different for different types of consumers. You’ve got to build up these complex pictures and understand where to put the right message at the right time.”

But Roth says there’s one thing all retailers must be doing, and that is embracing the digital world with gusto. “Any retailer that doesn’t have a well-articulated digital strategy is a retailer that probably won’t be in business soon,” he warns.

Walmart used to top the list of retailers in WPP’s Brandz global top 100 report, but now it’s Amazon. “Brands embracing digital technology and that have a strong value proposition have grown significantly faster than other brands,” he says.

With retailers playing such a central role in consumers’ lives, they have a unique opportunity to shape a brand around that relationship. Connecting so many media channels and customer journeys with one clear message is a challenge, but it’s one that the more inventive retailers are relishing. Advertising will become more complex, but more interesting, as retailers start to flex their creative muscle.

Why Ikea’s adverts work

Ikea will receive the Cannes Lions advertiser of the year award later this month, with judges commending the retailer for its brave approach. It wasn’t just its TV adverts that clinched the win, it was also in part because of its innovative use of Facebook. After uploading pictures of rooms to its Facebook site in Sweden, for instance, users were allowed to tag themselves on products in the image. Whoever put their name on a product first, won it. In the UK, meanwhile, Ikea tapped into the country’s love of cats by releasing 100 of them into its Wembley store and filming them to make an advert. A corresponding Facebook page encouraged cat owners to post pictures of their pets sitting on Ikea furniture. It’s this creative and consistently effective use of different channels that makes Ikea stand out, says Thomas.

Cannes Lions chief executive Philip Thomas also points out that it allows local marketing teams in each country to try new ideas without interference from head office.

Ikea, meanwhile, believes its use of humour has helped cement its reputation in the advertising world. Ikea global deputy retail communication manager Montserrat Maresch says: “We’re down to earth and straightforward.At the same time we don’t take ourselves too seriously. It’s important to have a twinkle in the eye, to be inclusive and warm.”