Zellers: The lowest price, but at what cost?

Walter P. Zeller had a clever idea when he founded Zellers 80 years ago in the early days of the Great Depression. He positioned it as a store for thrifty Canadians at a time when they needed it most. And for a while it worked. By 1976 there were 155 Zellers stores across Canada with sales of $407 million.

But it was never going to last. It couldn’t. Not with a Brand position based on lowest price alone.

Zellers has been steadily losing ground ever since Walmart entered Canada in the 1990s. Walmart’s twin focus on unbeatable prices and better living (Save money. Live better), was no match for Zellers’ singular concentration on price.

And, sadly, now Zellers has been Target-ed for elimination.

Another example of a Brand that is struggling to defend a position based on price alone is KIA. Owned by Hyundai, KIA has always been a marginal Brand with no clear point of difference. As GM and Ford have already learned, it’s costly to maintain multiple Brands that occupy similar spaces in the minds of consumers. This doesn’t bode well for the KIA Brand. In fact, 24/7 Wall Street recently identified KIA as one of the top 10 Brands likely to fail in 2011 – not a list you want to be on.

What does the Brand Coach coach?

Clarify your position very carefully. What makes you different must be unique and ownable for the long term. And it must be delivered with ruthless consistency at every touchpoint to every stakeholder. Properly leveraged, your Brand becomes the organizing principle for everything your business ever says and does.

Take Walmart: it was founder Sam Walton’s vision to create a store that would help poor people afford the kinds of things that rich people had. So through Instinctive Brand Leadership™, he organized his entire business around delivering unbeatable value that allowed Walmart’s customers to "save money and live better."

Crystal clear positioning statements, based on a unique and ownable position, allow consumers to easily understand your Brand — and the added value it promises — and to ultimately tell that story to others.

Zellers, despite its rich heritage and huge footprint in Canada, has been unable to carve out and maintain a position based on price alone because there’s always someone with lower prices waiting in the wings to steal that claim.

Zellers is another example of undisciplined Brand management — proving once again that your Brand (what people think of you™) is the law — not just your price point.