Submitted by Colin Turner, EC Harris, Head of Retail
In responding to today’s tough retail climate, the winners are investing shrewdly in the physical brand to make their customer experience distinct, valued and memorable. One of the best examples is the re-image programme underway at McDonalds.
We held a breakfast seminar earlier in the week where Henry Trickey – McDonalds VP of Business Development - explained how their UK programme is working. The attendees included senior representatives from major retailers, retail banks and a global brand agency. The group explored where the breakthroughs may be for other high street brands and three critical factors were identified:
1. Make the business case compelling to the retailer
The business case for investment must be compelling for the retailer, particularly in a franchise environment where the majority of the investment is theirs. Pilot projects must show rapid and credible improvements in sales and customer perception.
2. One size does not fit all – let each store choose the format that works best for them
McDonalds recognised the need for a tailored portfolio of designs to reflect local trading conditions and nuances, and as a way to ‘personalise’ the re-image programme for each franchise partner. As a result the re-imaged stores are recognisably themed but not identical.
3. Spend the money wisely
Any large re-image programme demands a substantial capital investment and every retailer must ensure maximum value from the asset. To make re-image projects as affordable as possible for franchisees, McDonalds applied a strategic category management approach across the entire construction supply chain. Working as an integral part of the programme team, a specialist team from EC Harris has driven 17% savings to date.
The business results are exceptional: an average 6% increase in sales from re-imaged stores – a compelling result for any retailer in these tough times. Even more impressive when compared against the flat or decreasing sales experienced by their major competitors. Investing in the physical brand works!