- March 3rd, 2017
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The Simplicity Solution: 4 Ways Retailers Earn More By Keeping It Simple
With apologies to a major fast food chain, this may well become the motto for 2017. As consumers wrestle the daily crush of choice and complexity, they want increasingly for the consuming process to be nothing more than simple. They want what no dollar can buy, which is time. So it should not be surprising that 64% of consumers will pay more for simpler experiences.
This is among the findings of the latest Global Brand Simplicity Index by brand-strategy firm Siegel+Gale. Now in its seventh year, the index ranks brands on their perceived simplicity based on an online survey of more than 14,000 people in nine countries.
This year, low-priced German grocery chain Aldi topped the list as simplest brand, followed by U.S. newcomer and rival Lidl. Other high-rankers include Google, Netflix, Ikea, Amazon, KFC, YouTube, McDonald’s and Subway.
All that simplicity adds up to one particular positive for brands that can embody it, and that’s a premium, according to Siegel+Gale. Among the study findings:
- 61% of consumers are more likely to recommend a brand that is simple
- 62% of employees at simple companies are brand champions versus 20% of employees at complex companies
- A stock portfolio of the simplest global brands outperforms the major indexes by 330%
Put simply, brands do not require Rubik’s Cube-like marketing strategies to excel. They may in fact need the opposite. The hook is that simplicity isn’t all that easy to achieve.
Simplicity Rules Of Thumb
That being said, simplicity — in terms of brand experience — is not hard to define. I think a simple brand experience follows three rules:
- It gives consumers what they want.
- It is available when and where they want it.
- It can deliver in three actions or less.
Technology makes these rules fairly easy to achieve. The challenge for retailers is implementing the processes that streamline choice and eliminate purchase steps yet still cater to broad needs. Consumer data, such as from a loyalty program, will aid in this process.
Take, for example, coffee. You want a latte? Starbucks has lattes. You want it in 15 minutes? Starbucks has an app so you can order it in advance and have it waiting for you. You want it in two steps? The same app has a “pay” function that simply deducts the purchase from the bank of money you’ve preloaded to your account.
Notice I didn’t mention the broad menu of flavors or brewing options on offer at Starbucks. Choice certainly does muddy the notion of simplicity, particularly on the retail shelf (which is why consumers love Aldi). But if the consumer knows in advance what she wants, then the brand has already achieved simplicity in its marketing. It merely has to get that product to her, in as few steps as possible.
How Red Bull, Ikea And Costco Make it Simple
Reducing steps actually does take complex thinking, however. It also requires a lot of high-level planning to ensure the experiential floorboards are secure. Following are four fairly straightforward steps to laying the groundwork to simplicity, by brands that do it with excellence:
Resist diversification: When Red Bull entered the U.S. in 1997, it created a new product category — energy drinks — that was easy to spot. Red Bull came in peculiarly small cans, just 8.4 ounces compared with 12 ounces for most soft drinks. It also offered only two options, regular and sugar free. When other companies rushed to compete, they did so with an array of flavors and options, while Red Bull adhered to its commitment not to diversify. Red Bull has since added new flavor varieties, but its familiar cans are still its core, contributing to a brand value of nearly $8 billion.
Be predictable: Sometimes, surprises add confusion. A simple brand makes it clear what consumers should expect. Ikea manages this in spades, or Allen wrenches: It is low cost because its customers have to put the Billy bookshelves, Micke desks and Pax wardrobes together themselves. Further, it carries pretty much the same assortment in every store, and every single product is Ikea branded. This enables the retailer to have complete control over the making and distribution of everything it sells.
But still delight: A predictable assortment can still have its share of surprises. Ikea introduces new designs and stylish accessories regularly, but maintains a core of staple furniture items. Costco, similarly, manages to carry a wide assortment of products, from kayaks to coffins, but its individual product choices are limited. The warehouse club reportedly only carries about 4,000 unique items at a time. This may means four dishwashing liquids, for example, or 30 cereals, rather than hundreds.
And be sure to deliver: Loyalty requires trust, and trust is built on giving what a brand promises. In pretty much every case, this entails quality. Lidl, the German supermarket chain that is just entering the U.S. market, is described in the Siegel+Gale Simplicity Index as offering a straightforward retail solution: inexpensive food that does not sacrifice quality or taste. Lidl feels confident enough in its offerings to serve them with garnish, according to the report: “The high-profile Swedish pop-up restaurant ‘Dill’ was revealed to be serving up a menu created entirely of Lidl products and produce.”
In doing this, Lidl delivers on the element of surprise by inventing new ways to present its existing product, rather than adding to the selection.
Such thinking is at the essence of “simple-sizing” an experience. A consumer does not have to be wowed with big gestures, just the right-sized ones.