Some customers love to pay to advertise brands.
Whether you’re Gap or Gucci, Abercrombie & Fitch, Calvin or even Tesco (stand up, Florence and Fred) making money from merchandise with their brand on is a staple of their business, reaching more people than most other media in the process.
In fact, “70% of respondents could not memorize which media campaigns they had been exposed to over the time period but could remember using promotional products” according to the BPMA
But is branded merchandise simply part of the car-marketeers promotional marketing armory (albeit a costly loss-leader), or are automotive brands overlooking the real value – and potential returns – on properly thought-through merchandise strategies?
Is it a sleeping giant best left undisturbed for the automotive brand owner or distributor?
Thinking on this, the BPMA’s recent survey highlighted just how powerful branded merchandise is in promotional activity, finding “merchandise can deliver higher or equal ROI than most forms of advertising”.
Promotional marketing aside however, own brand or private label is a much more interesting story.
“…supermarket own-label budget market is growing at more than 9% a year, according to Kantar Worldpanel, with Tesco Value achieving annual sales of £1bn”.
No mean feat in tough times, so could the idea work for car brands in showrooms?
To address that we need revisit a few fundamental question, one of customer focus that, in our view has been overlooked by brand’s owners and distributors. The question of providing relevant and valuable experiences the product promises – and then extending that into other retail activities (in this instance, merchandise).
Let’s look at Tesco again.
“Tesco was the first supermarket to launch a Value range back in 1993, the blue-and-white striped brand giving customers a down-to-earth option. Almost 20 years on, affordable quality is more relevant than ever, but customer needs have changed”.
Note that positioning – “affordable quality is more relevant than ever”. It’s a smart way of positioning an own-brand line that supports Tesco’s simple idea (“every little…”) making it good sense to choose or switch.
Thinking carefully about what your customers buy – or what they might buy if you offered it – is such an obvious starting point it hardly warrants saying. But the success of own brand is so closely tied to it’s integration with the experience a brand delivers it can’t be over stated.
With automotive manufacturers’ this is often a thought that begins when a prospective customer opens the car door. Pretty much every activity is predicated around the vehicle and just as much effort needs to be applied to other activities.
So, who’s taking advantage of this now, are there any notable exceptions?
Well, yes, Ferrari for example. I’m sure you can easily picture the F1 supporters, a sea of red shirts and flags at the finish line. But what does all this benefit the brand, what does it gain from all this ‘non-car’ activity?
With a little focus “over the first six months of 2010…revenues from the Ferrari Store online grew by 40 percent”.
Better than that.
“About 20 per cent of Ferrari’s revenue also comes from merchandise” (the company’s own press release).
So while not every Fiat, Ford or Fabia is a Ferrari if a customer’s picking your brand, likely as not they’ll appreciate your turning you hand to other, appropriate products you could offer them.
BMW Motorrad understand this. The current Motorrad motorcycle accessory catalogue runs to 136 pages. BMW generate thousands of pounds in additional revenue on every bike they sell. The products BMW design and sell are a million miles away from cheap cufflinks with a badge stuck on. They’re world class products that’ll take a budding Charlie Boorman across the world if he needed to.
The opportunity for automotive brands is to dust of the box marked ‘merchandise’ and take a careful look at how your own own-label goods could be reborn – as premium, or value, valued or valuable products – and make a case for showroom space.
It’s time to make that ‘give-away’ a proper – and profitable – part of your customer experience.
Image from The Melbourne Times