Paradigm Shift in Retail Branding

Published by MBA Skool Team, Published on October 17, 2015

When we hear the word ‘brand’, the first thing which strikes our mind is words like – Coca Cola, Apple, or Adidas. All of these are manufacturers’ brands but the concept of brand can be applied to all kinds of products and services, even retailers. Retailers exercise authority on the manufacturers as they have a direct interaction with the customers at their stores, where the actual purchase decisions are taken by the customers. Retailers can have a lot of influence on the brand equity of the manufacturers’ brands due to these interactions with the customers.

Paradigm shift in the approach

This factor along with the increasing competition has forced many big companies to explore the opportunities and offer the products and services directly to the consumers by controlling their distribution system. Retailers have always focused more on the operational concerns and giving higher priority on buying decisions when they have had an opportunity to be market oriented. In the past, mass retailing have been apathetic to capitalize this advantage leaving an open field to the manufacturers. However, the changing marketing conditions and the increasing power of retailers over manufacturers in the value chain has brought about a big change in the attitude towards strategic planning. Retailers having widespread availability of information are now looking to establish their leadership and credibility in the marketing channels. This change in retailing can be considered as a paradigm shift from merchandising to marketing.


This evolution has forced retailers to establish their store names as brands and the focus is more on building brand awareness and set up a differentiated brand image. Retail branding is nothing but a strategy to use the ‘brand concept’ and pass it on to a retail company.Retail branding is also important because in any retail store the entire organization is exposed to the customer and the nature of working of the company can be experienced by any customer, for example Pizza Hut or Croma.

Retail Brand vs. Store Brand

The term ‘Retail Brand’ differs from ‘Store Brand.’ Retail brand refers to the store and the identity of the retail organization. The purpose of applying branding to retailing is not to increase
the sales of different brands by the retailers but to brand the retail business itself like Carrefour and Jumbo Electronics. Store brand, on the other hand refers to products branded strategically by the retailer. The store brands are more like house brands or private label brands.

Advantages of establishing a strong retail brand

a. A retail brand helps to differentiate from the competitors and increases the brand awareness
b. Strong retail brands helps consumers in their purchasing process. A brand spreads the knowledge about the retailers and thus consumers do not have to search for additional information like prices, assortments, discounts etc.
c. Strong and reputed brands help in the expansion of the business into different geographical areas. It is much easier to open a new outlet under the existing brand name. The reputation is carried over to the new outlets from the existing image of the brand name
d. Having a strong retail brand name gives a vigorous negotiating power over the manufacturers and the third party logistics services, which manages their supply chain and inventory. For example, Carrefour in UAE do not have to pay for the left-over inventory to the suppliers. All the costs are to borne by the third party logistics services company.

Strategy of creating successful retail brand name

a. Differentiation from competitors and creating competitive advantage:Creating a differentiation in the minds of consumers is an essential requirement for any brand. The profitability achieved by the company is somewhat directly proportional to the level of differentiation the brand has achieved. Large amount of finance and market information is required to create competitive advantage through brand innovation. It is also considered to be a challenging task. Retailers are busy in finding new markets to create the brand and tackling the competition.
b. Developing market opportunities and long term market continuity: In the course of retail brand strategy, finding or creating new markets for the retail brand in the existing competition is extremely important. Brands like Raymond and Reid & Taylor have set up their retail chains in Tier III and Tier IV cities to tap the market which was previously
untapped by the big players. The Big Bazaar retail brand has also started looking for new market opportunity. They are transitioning from economical brand to a more fashion and trendy retail brand. They have been repositioning themselves as more of a hip and trendy brand and for this they have come up with a new campaign called ‘Sabse Sundar’ and are planning to do away with ‘Sabse Sasta’ campaign
c. Consistency of different marketing components: Sending a uniform message from all the marketing mix is important for any retail brand. In a store, all the elements of the marketing including the 4Ps come together. Thus, the retailers need to make sure that there should not be any inconsistency which can make the brand image frangible. The retail brands like IKEA, Carrefour and Zara have been successful in projecting an unvaried image with their pricing, store atmosphere, merchandising and communication


In the contemporary world, retail branding has gain much relevance due to the changing consumer needs and the ever-increasing competition. Many retailers have turned themselves into strong brands by adopting the basic principles of branding. These retailers have one thing in common; they were successful in setting up a distinct image for themselves. The brands like Tesco, Jumbo, and Walmart used their own marketing tools and always differentiated themselves from the competitors to setup a unique image in the minds of their customers.
The brand associations generated by these retail brands over time must be augmented through continuous brand messages to save the efforts put in for brand building. Developing a strong retail brand requires three important constituents; consistency in marketing communication, differentiation from competitors and creating market opportunity. Many successful retail brands have used this recipe while focusing on the core brand and ensuring that they do not deviate from it.

The article has been authored by Mohd Mohtashim, IMT Ghaziabad.

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