Opinion: The Marketing Society Forum

Is it a good idea for FMCG brands to try to become retailers?

Chocolate manufacturer Cadbury is looking to open up to 60 licensed cafes across the UK over the next five years, drawing on brand loyalty to take on established names such as Starbucks and Costa.

MAYBE - Wendy Lanchin, Planning and strategy director, The Marketing Store London

Product brands have made the leap to retailing, with varied success. Haagen-Daazs, for example, opened a string of ice-cream parlours across London, now reduced to a single store in Leicester Square.

The trick seems to work well from retailer to product - PizzaExpress and Nando's now have successful grocery lines - but rarely the other way round.

Those that do succeed seem to have an exciting 'experiential' dimension built into their DNA. For mass-market brands, retail is often a hybrid activity. Marmite's successful pop-up shop was more like a promotional venture than a long-term retail proposition.

Chocolate is a sector where product and retail have been inextricably linked, at least at the luxury end of the market. Brands like Thorntons and Godiva have always existed as both stores and standalone products.

So Cadbury has a strong precedent to build on, but needs to ensure that its proposed 'cocoa houses' provide a rich experience and not simply another distribution channel.

YES - Anthony Hopper, UK managing director, Saatchi & Saatchi X

The retail environment is one of the only places where shoppers can have interactive and multi-sensorial experiences with brands. It's also becoming one of the only remaining mass-communication channels. The problem is that, especially in the UK, manufacturers have lost control of how their brand is merchandised in-store.

Brave brands such as Apple, Nespresso and now Cadbury are realising that there is an alternative - to take control of the retail experience by selling direct. Cadbury makes a great chocolate bar and delivers a lot of joy as a brand. I'm excited to see how this will be brought to life in the cafe experience.

I'm also looking forward to seeing how it learns and whether it exploits its successes in its traditional channels, as Apple has with its stores-in-store.

Others have proved that this strategy can work and that shoppers want these types of experiences from brands they love. I'm left wondering why retailers are removing all branded and emotional experiences from their aisles and forcing shoppers to get their fix elsewhere.

MAYBE - Simon Bailey, UK chief executive, The Brand Union

There's no hard-and-fast answer. In Cadbury's case, it's a move that carries significant risk, but one that may well be worth taking.

Cadbury must ensure it understands its primary audience and develops a service and product range that caters to their needs. It's a crowded marketplace - there has been a huge proliferation of cafe chains corresponding to the demand for a 'third space' between home and the office, where people mix to both socialise and work. So Cadbury will have to be clear about the experience it offers and why it's unique.

It is a brand extension that makes sense. You immediately think 'hot chocolate', and it's such a strong brand in the UK that it can probably afford to take a few risks.

Translating its core values into a new product range that doesn't confuse the consumer will be crucial. This could be a masterstroke in evolving the brand to get back into Britons' hearts. At the very least, it's a good way of getting Cadbury talked about again.

YES - Richard Perry, Chief operating officer, GyroHSR

Naturally, retailing requires a different skill and business acumen, but this can be brought on-board. As FMCG brands already have retail-based customer relationships, they are ideally placed to extend into their own retail spaces. By owning the retail experience, FMCG brands can enrich and deepen customer engagement.

If the brand is strong and has the right associations, then it can traverse sectors. Marmite has shown how consumer passion can be ignited with its pop-up shop on London's Regent Street late last year.

However, we all know that the high street can eat brands for breakfast. I hope that Cadbury has done its due diligence before embarking on the branded cafes and has seen that the glass is at least half-full.

The Marketing Society is the most influential network of senior marketers dedicated to championing marketing in the UK


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