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By Published on .

For retailers, the message has never been clearer: Brand yourself, or be branded a loser.

In recent months, Montgomery Ward & Co. moved into federal bankruptcy protection. Woolworth Corp., long the heart of Main Street America, closed its variety stores. Levitz Furniture has filed for bankruptcy; its effort to update its image from a vendor of inexpensive furniture to one of style and quality has been slow to take.


Each had its specific problems, but common to all was a failure to brand effectively at a time when America is overpaved with too many stores. Sales per square foot at malls did not keep up with inflation in 1996, rising just 2.9% compared with 3.3% inflation, according to the International Council of Shopping Centers.

The plight of these retailers may be only the beginning of an industry bloodletting as retailers find themselves in competition not only with the store down the street and out near the interstate, but among those vying for prime retail corners on the cluttered information superhighway.


"There are really too many choices and we are overstored," says Jack Sansolo, senior VP-global brand direction for Spiegel's Eddie Bauer. "We are now in the same position as package goods," he says. Retailers must rise above the marketplace clutter "and go to the emotional relationship with the customer."

Some chains have "connected" with their consumers by developing a lifestyle niche, including Banana Republic, Ralph Lauren and Eddie Bauer. Each has moved beyond apparel into home furnishings-a broadening of service emblematic of popular department store cousins like Federated Department Stores' Macy's.

Among the traditional department stores, Kohl's Corp. has created one of the biggest marketing and retail splashes in recent years with its branding effort, themed "That's more like it."

The Midwest chain has effectively coupled department-store service with low-price name brands. Wall Street analysts predict Kohl's will meet annual sales increases of 20% over the next five years.


Doug Raymond, president-CEO of Retail Advertising & Marketing Association, says the branding message is starting to hit home: "More and more, retailers understand they can't just scream, '40% off this week only!', and then come back to the customer the next week screaming, '40% off this week only!' "

J.C. Penney Co. is developing a formula to balance branding and sales by using a broadcast branding campaign supplemented by an increased use of radio to drive immediate sales. "If your brand doesn't stand for something to your customer, then your sale isn't going to mean anything to them," says Lynn Greiner, national media broadcast manager at Penney's.


Spending by retailers to support their branding messages carries a high premium. Sears, Roebuck & Co. spent $588.1 million in '96 media, up 5.7%, much of that to push its "Softer Side" campaign. The Gap's hip revival of its "Fall into the Gap" theme drew much of its media expenditures of $41.6 million, up 72.6%.

Retailers, aside from media expenditures, are moving increasingly into more subtle forms of advertising like the co-branding consumer-loyalty effort struck by the various Federated department stores and Visa. Beginning next April, customers shopping with a Bloomingdales' Visa card, for example, will receive a 3% rebate on purchases in-store and 1% on all other purchase.

Another ad/image venue increasingly popular among retailers is the tried-and-true community involvement, whether sponsorship by Sears of Gloria Estefan concerts or fashion show benefits for AIDS staged by Macy's in San Francisco.

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