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Retail-sector firms advised to focus on corporate identity

Amid the changes in the battlefield of the local retail industry, retailers need to strictly focus on strengthening business grass roots, especially corporate identity, which will make them sustainable in the heart of consumers.

It is not unusual that following closely the changing trend seems to be one of the key methods selected by most business people. However, such a step forward makes it hard to be recognised consistently.

Identity is created from past experience of the business organisation, whether a success or a failure. Also, identity may refer to self-presentation made by particular business organisations with a purpose to make themselves recognised by stakeholders, which are consumers, community, investors and employees. It will finally lead to a strong reputation of the organisation.

Two major local and international retailers - Central Department Store and UK-based Tesco Lotus - have adopted diverse strategies in communicating their identities to target shoppers and to be sustainable in the highly competitive retail market.

Both Thai and international retail giants share the same "bible" in corporate identity management and communications aimed at strengthening business grassroots and loyalty customers, according to qualitative research conducted by Buppa Lapa-wattanaphun, lecturer at the School of Communication Arts, University of the Thai Chamber of Commerce.

She said that retail business is one of the sectors which has contributed the largest revenues to the country. Identity then is quite important to the retail business. Tesco Lotus’s internal survey found that Thai consumers have seen daily shopping as their preferred experience and entertainment for the family. So, delivering a good shopping experience to customers is not only offering a variety of goods and services at reasonable prices, but also added value for individual shoppers during the buying process, including lighting, wide walk ways, and merchandising designed for shopper convenience. It is not different from leading department stores, such as Central, which have the shopping experience of customers as one of the most significant factors in driving their business success. At Central Department Store, individual shoppers will be able to experience the identity of the store through three major elements, which are merchandising, service, and store layout and ambience.

Both Central Department Store and Tesco Lotus Hypermarket have shared the view that identity is quite important in reflecting themselves, being different from other competitors, building joint experience and bonding between goods and services. In another way, those identities need to be different as they have been built based on different backgrounds, such as business patterns and their adjustments to suit consumer behaviour.

According to Buppa's research, the successful model applied by Tesco Lotus has a focus on core hypermarket business, complemented by other retail attractions, such as shopping plazas filled with other retail tenants, to cater lifestyles of consumers at different locations. Meanwhile, the core business of Central starts from the department store and extends to other retail formats, such as supermarkets and specialty stores.

"The retail concept adopted by Tesco Lotus is mainly to offer all types of shoppers with necessary consumer products with the use of pricing strategy as a driving force. This is because there is no difference in product offerings compared to other retail stores selling daily goods, and with that similarity, consumers will look at prices as a key factor in their shopping decision. This is quite different from Central Department Store, which focuses on offering fashion and lifestyle products targeting A and B-class shoppers. The Thai retailer also highlights more product variety, superb quality, and 'Exclusive at Central' brands," Buppa said.

Tesco Lotus has created a sustainable competitive advantage through various strategies, including overall cost leadership with the roll out of every day low price campaigns, and product differentiation with the launch of household items.

For Central Department Store, the company has applied differentiation strategy with the launch of Only@Central exclusive products and the implementation of unexpected services to its customers, she added.

Being challenged by different historical business background, nationality, and culture, international retailers like Tesco Lotus have confronted many serious problems when doing business in Thailand, such as being opposed by traditional small retailers and suppliers, which have been in the market for a long period of time, as well as local regulations set to strictly control the expansion of modern-trade retailers in the market.


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