ZIBS Forum: The Power of Retail Branded Experiences
by Sarah Banick

People tend to think of retail brands as specific brands sold at retail - a soft drink named Coca-Cola, a detergent called Tide, or a Hershey's self-titled chocolate bar. But today's acute retail managers are moving beyond selling retail branded goods towards creating "retail branded experiences," says Lluis Martinez-Ribes, professor and head of The Marketing Team (the brand name of the Department of Marketing Management) at Spain's ESADE Business School, one of the most prestigious European universities. He stresses that in retailing the shop formula itself is the main "product" to be sold. If the store does not offer customers a pleasant experience they are unlikely to purchase branded consumer products, as they may not even enter the store.

Martinez-Ribes offered his insights into strategic ways to build a retail formula brand at the March ZIBS Forum, an event sponsored by the Zyman Institute of Brand Sciences at Goizueta Business School. He offered as a case study one of his own projects with SUPSA, a Catalan retailer that runs the "Plus fresc" chain of neighborhood supermarkets in northeast Spain.

As the market leader, SUPSA needed to react to growing competition. Martinez-Ribes was given the green light by management to design and implement a new concept supermarket. He segmented the market using "way of living" as the basis and arrived at five market segments. He then developed a strategy aimed at the "demanding and highly stressed people" segment. This coveted group has lots of money and precious little time, with an additional desire to live healthy and buy good value, quality products. They are 33 percent of the market and not targeted by any competitor, had excess spending power and looked like an attractive segment to pursue.

With the rare opportunity to do what he wanted with creative freedom, Martinez-Ribes set out to create an immersive shopping experience, one that was strongly branded yet would succeed with minimal advertising. In developing the name for the new supermarket he came up with the term "Sunka," taken from the Japanese word that means "take time for you."

The shop is the first in Spain to have a concierge that will handle a diverse set of requests, from dry cleaning to watch repair to event tickets. Sunka also has a crèche for dropping off your children while shopping.

Sunka is a neighborhood grocery store-and much, much more. It offers a concierge desk with runners who will do your errands for a small fee, such as dropping off the dry cleaning or getting a new battery for your watch, or event tickets; crèche for dropping off your children while shopping; fresh ingredients that are pre-packaging together with recipes to help you cook a fresh meal "from scratch"; and other "Useful Customized Experiences," as Martinez-Ribes describes them, like an upstairs lounge, innovative lighting, and an uncluttered appearance.

No, Sunka is not just a store. "Retailing is more an experience," says Martinez-Ribes. By understanding the needs of its customers, Sunka offers flexible solutions to its customers' challenges, such as putting together a healthy dinner quickly, consolidating errands, and education about diverse food and wine selections. Items are priced the same as at a Plus fresc, thus Sunka doesn't compete with its parent store. All of this is delivered in a low-key, stress-free environment, utilizing "relaxing, but spirited" music and images that calm the customer while shopping. To Martinez-Ribes, "the shop is a communications medium."

When you enter Sunka you do not see what you normally would see in a supermarket. Shoppers are welcomed into a deceleration zone with displays contain artwork inset into the wall. And then there is the poetry tunnel, which surrounds you with thoughtful words and phrases. The physical space is not the only point of departure from the norm. There also is a higher level of service. The staff is trained to be extra helpful and attentive to customers, including packing bags for customers, which usually is self-serve in Spain.

Can you build a brand with almost no advertising? For Sunka, that is exactly what it did. The only advertising produced was two initial opening notices in the newspaper. The company also created a limited number of full color booklets that contained an enigmatic storyline and were distributed to influence leaders. The print run was limited to 150 booklets. This was definitely not your typical supermarket mailer. Instead of your typical coupons and deals, this booklet was an inspirational piece with imagery and thoughts more likely found in a museum book. The shop itself, rather than advertising, creates the demand. The atmospherics in the shop, when experienced, convey a better understanding than any comparable 25 minute advertisement could. In essence, the shop adheres to the wisdom of Kevin Lane Keller who declares "advertising is not the only element - or even the most important one - for building brand equity."

Is Sunka a Success Story?
As a result of its concept innovation, Sunka grew quickly through word of mouth. It was profitable from its first year, maintaining an 85 percent customer loyalty. While the store investment is 25 percent more than that of a Plus fresc shop, its sales are 20 to 30 percent more than Plus fresc, thus reaching its payback 7.1 percent earlier. Net profit is 3.2 percent higher than Plus fresc.

Model based on Bendixen, Bukasa, Abratt 2003

Martinez-Ribes attributes the success of Sunka to brand building. "The public doesn't perceive the individual ingredients so much as the resulting solution," he said. The power of the brand lies with the customers' sensory experiences. These past experiences, combined with a perceived imagination of the future (through expectations management), become the brand. "Brand building is-partly-about brand meaning sharing," he concludes. As such, "it becomes much easier to develop branded retail products."

Sarah Banick is a freelance writer based in Atlanta, GA