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Exclusive Q&A: How ‘Purpose-Based Ideas’ Help Modern Brands Maintain Authenticity Featured

  • Written by  Bryan Wassel
Exclusive Q&A: How ‘Purpose-Based Ideas’ Help Modern Brands Maintain Authenticity

Courtesy of Mike LeiserThe interconnected nature of modern society means shoppers are never not shopping — their journey begins well before they visit a retailer’s web site or store, according to Mike Leiser, Chief Strategy Officer at Prophet. This phenomenon has caused an explosion in the number of paths to purchase, and requires retailers to stake out a unique position to grab potential customers’ attention. For brands like Nike, Patagonia and DICK’S Sporting Goods, that has sometimes involved taking controversial stands on hot-button social and political issues.

However, it’s not enough to declare support for a cause or suddenly announce a brave new direction for a brand. Retailers need to develop believable, genuine messages that support their existing efforts, while still representing an evolution of their current brand story.

In this exclusive Q&A, Leiser discusses how retailers can create a sense of authenticity around their brand and improve how shoppers perceive them, through means including internal development, mergers and acquisitions (M&A) and partnerships.

Retail TouchPoints (RTP): Should there be a clear connection between the products a retailer sells and any larger purpose they adopt, such as with REI and outdoors stewardship? Can brands create entirely new connections through their actions?

Mike Leiser: I don't think brands can just wholesale change themselves. Any brand or retailer that has been around has some fundamental belief system that started with the company. To be truly authentic, you just have to reach back and think, ‘How might we reframe ourselves a little bit in the context of that purpose?’ It has to connect with the culture, which still may need to evolve. It has to connect to a value set, which also may need to evolve. It’s never something like saying you’re going to wholesale change the culture and purpose of an organization, but rather getting clarity on an ideal so that you can develop a shared value.

Look at all the new players that have come in over the years, whether it be Sephora or a Lululemon — they all began with a purpose-based idea. In fact, most brands today have a purpose-based idea — that’s what makes a modern brand, and it’s incredibly important. We have a lot of clients that are legacy brands that are reaching forward a little in their purpose, but it still has to be connected to what they do, the values they hold and their culture; otherwise it will be inauthentic and never deliver.

RTP: Brand activism is a key part of modern storytelling, but many retailers lack a history in this area. How can companies new to this practice start telling stories that resonate without coming across as phony or opportunistic?

Leiser: The first thing is, they can't be stories, right? An existing retailer, if they're going to craft a purpose and try to articulate what they believe as an organization, have to then create a promise and show how they can uniquely deliver on it. Those things need to align. You can only tell authentic stories when your purpose, your promise and the way you deliver all align. Only then are they authentic.

Take REI. It's not that they're telling stories — it’s the authenticity of the purpose, what they believe and how that manifests in all the product, service, experience and communication decisions they make as an organization.

Brands that have been around for a while and retailers that have been around for a while need to reach back within their organization and culture and ask: What is it that we believe in? Where do we think we can create shared values with those we serve, and how will that manifest itself in the products, services, experiences and communication that we drive to the market?

Without all those pieces it’s just stories, and it comes across as inauthentic and not real.

RTP: How can retailers use M&A to create a new perception of their brands? Should they focus on enhancing their existing presence, or use this as an opportunity to tell a new story?

Leiser: I think the question from an M&A perspective becomes, what was the strategic intent behind it? For example I can buy new capabilities, I can buy access to new channels, I can buy something with a slightly different target audience — or I could buy a brand that is really distinct? I think companies that go through this process have a decision to make: how closely, or not, do we link that acquisition to our core retail brand in terms of its evolution?

Sometimes you want these things to be standalone, to literally build completely separate brands and businesses around it. Other times you try to integrate it into the core — for example, like Walmart buying Jet.com. I don't think they have quite figured that out yet, but I think they're trying to bring that version of being able to compete at some level with Amazon and other online retailers.

It requires you to make some choices. Are we building a new brand and business model? Are we simply buying some capabilities that effectively integrate, to change the perceptions of who we are and start to make us seem more modern? Does it show that we're engaging with our customers when, where and how they want? It's important that this thinking is handled up front.

RTP: For a growing retailer with a large portfolio of products and/or sub-brands, what are best practices to keep its core message and values clear to customers?

Leiser: This is an area I focused a lot of my career on, this notion of a portfolio of brands. What’s happened historically is that companies have used portfolios of new names and new brands as a little bit of a crutch, to say, ‘Oh, this is new’ or ‘This is something different.’ What they found, either by creating lots of sub-brands or acquiring them, is that there's no clarity between their roles in the organization or the relationships of these brands to each other.

More and more in this modern marketplace, if you've got a confusing portfolio and architecture, search engines like Google will punish you because you'll be fragmented. I believe in having as many brands as necessary, and as few as possible. That goes with the notion of understanding the target audiences and the ability to stretch brands, whether it be in different product categories or subcategories, and taking a very concerted approach to any creation of a new brand because of the investments required to build those distinct equities.

There are some fundamental questions that need to be asked. Are these really different targets? Is it really a different value proposition and experience? Do we need to create a new brand or sub-brand, or would we be better off keeping it under the master brand with a descriptor? I think that historically companies have created too many new brands and too many sub-brands and therefore created inefficiencies.

RTP: How does a company's ecosystem of partners affect how it is perceived in the market? Are there best practices, or pitfalls, that retailers should keep in mind when seeking new partnerships?

Leiser: Partnerships need to do two things: they need to help build the business, and they need to enhance equity and, at a minimum, not tarnish your brand. When brands partner with one another, I've too often seen decisions made through that revenue-only lens: ‘Hey, if we do this, we can generate a significant amount of revenue’ — and not understanding the negative impact their reputation would suffer by being associated with that brand.

Think of it in a two-by-two matrix. If one axis is what I’ll call lower revenue opportunity to higher revenue opportunity, and the other axis is negative impact on brand to positive impact on brand, there’s no question: you want to find opportunities that are high revenue, positive impact on brand. Those that are positive impact on brand but low revenue, you have to kind of make some choices on what you want to invest.

The tricky part is those that are essentially low-to-negative impact on brand and also high revenue. This is where a retailer has to be careful. At a minimum, they have to understand that what they're doing will have no negative impact on brand — it may not be positive, but it's at least neutral. I think this is too often where partnerships can fall down: businesses only make decisions based on a revenue model, and don’t understand the long-term impact that it will have on their brand and future purchase considerations.

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