Could a 'continuous launch' mindset have helped Homebase prevent a crisis?
Homebase is poised to announce the closure of up to 80 stores next week, part of a last-ditch attempt to save the business after already shuttering 17 unprofitable stores.
On top of mounting competition from the likes of Amazon, the Homebase brand has failed to resonate with consumers in recent years, resulting in sliding sales.
The DIY chain has also changed hands several times, being taken over by Australian firm Bunnings, adopting its branding and then u-turning on that decision. Back in May, restructuring specialists purchased the retailer – but maybe now it's time for a different kind of reset.
The fact is, Homebase isn't sailing these choppy waters alone. Latest figures from the British Retail Consortium show retailers suffered the sharpest drop in business in more than two decades back in April. House of Fraser, Mothercare, Claire’s Accessories, Toys 'R' Us and Maplin were among the casualties along the way.
And it’s not just the high street suffering: McKinsey recently reported that the average lifespan of most of the world’s biggest corporations is just 18 years (down from a century back in the 1930s), and that it is forecast to fall to as little as 10 years by 2025.
Changing spending patterns and digital experiences are reshaping people's expectations of the physical world, and media-fragmentation has led to an abundance of challenges for brands.
To buck this downward trend, brands must evolve too, by adopting a mindset of 'continuous launch'.
Brands need a 'continuous launch' strategy
A recent study Collider commissioned provides some insight into how to engineer this shift in focus, and what it means to be in a state of continuous launch.
Two major findings emerged: brands, unsurprisingly, need to hone in on customer experience and secondly, they need to better understand customers' ‘need states' – not just their needs.
First of all, we found that 32 touch-points play a role across the customer journey: including discovery, adoption and ultimately sharing that discovery with others. It was also clear that a customer's overall experience of a brand, or indeed a retailer, is only as strong as the weakest point on that path.
No wonder then that creating a seamless, and connected, experience is key. Even luxury brands – late and sometime reluctant entrants to the digital space – have seen the value in offering more holistic experiences.
Last year, for instance, Dior made a limited edition Lady Dior bag available over Chinese Valentine's day on WeChat. It was the first luxury brand to do so and the bag sold out in two days.
For the majority of people – millennials in particular – our research found that enjoying the purchase experience was more important than whether the brand was considered to be different or individual.
This changing attitude has already resulted in brands investing in creating experience destinations, whether they are permanent – like John Lewis’s new flagship store in Westfield complete with a spa, ‘discovery rooms’, a nursery service and a working ‘demo’ kitchen. Or just temporary, such as Hello Fresh’s Old Street station pop-up created in response to customers’ desire to be able to pick up their ready-to-prepare fresh meal on their commute home.
And it works.
According to the Event Marketing Institute, 98% of consumers exposed to a product as part of an experiential activation will talk up a positive experience with two-thirds mentioning the brand.
Relaunching with relevance
Before they reach a stage a critical stage, like House of Fraser, Toys 'R' Us or Homebase, brands need to ensure they stay relevant to customers, be that via a refresh or by way of relaunch to reach a wider, or just more receptive, audience.
Old Spice is a great example of an advertiser that ‘relaunched’ itself to gain relevance with a younger audience, and to connect with women – which its own research showed was the way to get it onto bathroom shelves.
Advertisers can emulate this success by tapping into a range of insights from consumer psychology and behavioural economics. Doing so will allow them to understand the ‘need states’ of their intended audience.
This is because the value of a brand could be related to different factors, like 'social proof' (extrinsic, visible brand signals that reflect or reinforce consumers' personal identity to others) or 'self confidence' (intrinsic, internal reinforcement of how consumers feel about theirselves, to give themselves confidence or ‘treats’ that make them feel good).
For a brand such as Lego, another master of reinvention, ‘social currency’ is key. From facing bankruptcy in the 1990s, its smart licensing moves, product diversification and highly engaged cross-generational fans today help fuel the ‘social currency’ around the brand, keeping it relevant and desirable.
A 2017 study actually found most people still wouldn't care if 74% of brands disappeared.
So for marketers, understanding the unconscious drivers of purchase that can shift their product or service from desirable to disposable, and remaining front-of-mind while relevant, across every brand touchpoint, are key to surviving in a new era of reinvention.
These are the building bricks that could help brands like Homebase avoid becoming a casualty amid changing expectations and competition from pure digital players.
Charlotte Bunyan is head of strategy at brand experience agency Collider, she tweets @CharlotteBunyan