HOW BRAND ASSOCIATION AFFECTS CUSTOMER BUYING DECISIONS

A Masterclass In Business Transformation From Retail Giant, Argos

I have a list of shops that I love. And a list of shops that I won’t step foot in! The retail giant, Argos, was right at the top of that list. Why is it that I love Anthropologie and John Lewis, but eschew British Home Stores and Argos? It comes down to brand association.

How Brand Association Affects Customer Buying Decisions

I have very positive associations with Anthropologie and John Lewis. But the thought of thumbing through thick Argos catalogues, completing their order form with the ubiquitous little pencil, handing my chit to a cashier… and then the seemingly interminable wait for the goods to arrive at the counter leaves me cold. The bottom line was that I associated Argos with a less affluent customer segment. And this did not fit with my self-identity. But Argos’ digital makeover has caused me to rethink what for me was a negative brand association.

Earlier in the year, following a hip replacement, my mum bought a new bed. The bed wasn’t as comfortable as she’d hoped. So I suggested she buy a mattress enhancer to make it more cosy. I hopped on the John Lewis website, and found the perfect mattress enhancer. But my mum balked at the £80 price tag. I searched again, and found Argos retailing mattress enhancers with a positive review rating for £19.99. My ever frugal mum asked me to place an order.

I was amazed and impressed by Argos’s fast track order and delivery system. I placed an order at 6pm and the local store delivered the enhancer within an hour! It was on my mum’s bed a few minutes later. And it was so comfortable, she had the best night’s sleep in months.

This experience has completely changed by brand association with Argos.

What Is Brand Association?

Brand association is the set of attributes that come into customers’ mind when they think about what a brand is. Brands have implicit and explicit meanings which a customer associates with a specific brand name. For example, I now associate Argos with customer care, speed and efficiency, where I didn’t before. Branding adds personality, uniqueness and value to a product. It’s these factors that build brand loyalty and persuade customers to pay a premium for a branded item over a similar generic product.

How Did Argos Achieve Its Digital Transformation?

It started with a vision. To become the UK’s leading digital retailer, offering customers a new proposition in terms of speed and convenience, whilst retaining their reputation for choice and value. Argos worked with LCP Consulting, specialists in supply chain consulting, over a three-year period. This transformation won LCP Consulting the Commercial Excellence and Project of the Year award at the 2016 MCA Awards.

An essential part of the transformation is the ‘hub and spoke’ solution whereby the company’s 160 largest outlets acts as hubs for their 20,000+ lines, while the ‘spoke’ stores stock fast selling items on either a same-day or next-day delivery service. As a result, almost half of Argos sales now start online, with transactions from mobile phones and tablets representing 28% of total sales.

In an article for the Times, John Lockton, MD of LCP said:

Lots of traditional retailers are at the point where Argos was 4 years ago and are rethinking their order fulfilment processes in order to compete with challengers…. Argos customers love the transformation and, crucially, it is economically viable. But consumer expectations never stand still so it’s vital to stay one step ahead.”

Because it wants to offer its customers a wider range of products, the supermarket giant, Sainsbury’s, has made a £1.4 billion takeover bid for Argos which its owner, the Home Retail Group, has advised shareholders to accept.

Meanwhile Argos’s sales growth is accelerating as it targets more affluent customers through improved product ranges, more exclusive brands and its digital offer. As John Walden, Chief Executive at Argos’ parent Home Retail Group explained in Marketing Week:

Historically Argos’ marketing has been biased towards less affluent customers. By having an offer that is more appealing across the range of its customers, there is a significant opportunity to grow the business and build greater brand awareness.”

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Question: What is the brand association your customers have with your business?  

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About Denyse

I help small business owners to scale and create a profitable business by providing business consultancy and business coaching services on either a 1:1 and group basis. I draw on my 8 years’ experience as a CEO to help the businesses I work with to transition from 6 to 7 figure turnovers.

Prior to becoming a business consultant and coach, I gained 25 years’ experience in business in senior management and leadership roles, including 8 years as a former CEO. This experience is backed up by training at Cranfield School of Management, the UK’s leading business school. With experience of leading and developing staff teams of up to 150 people across 7 sites, there’s very little I haven’t had to deal with or experienced during my career in business.

You can find out more about working with me HERE. Or alternatively email me on denyse@denysewhillier.com to arrange an informal chat over coffee. There’s no hard sell. Just solid advice and a straightforward, honest assessment of whether 1:1 business coaching or business consultancy would be a good fit for your business, the results you can expect and how to get started.

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