Retail Few believed that the New Denner concept could lead the discount chain to a comeback. Even fewer believed that the supplementary channel would become a full-range supplier. ViznerBorel stages the turnaround If CEO Peter Brabeck claims to be Nestlé personified, a similar claim by Philippe Gaydoul for the Denner discount chain, which he has managed for five years, would be at least as appropriate. His name has been mentioned in over 200 texts in the Swiss press over the past twelve months - sometimes due to the increasingly fierce price war among retailers, sometimes due to the completed renovation of the stores. And above all because Denner, although smaller in terms of volume, has clearly eclipsed the sales growth of Migros and Coop. According to the study by Bilanz and Interbrand Zintzmeyer & Lux, the "Branding by CEO" seems to have "not yet" affected the brand value of CHF 39 million. Nevertheless, 44th place in the first ranking of Swiss brands is probably only a provisional one, with high upward potential. Because although Gaydoul's dynamic appearances convey the spirit of optimism, the new look and business style well, in the long term it is much more the higher sales and increased self-confidence that will shape the image to the outside world.
The fight against the cartelsHis predecessor Karl Schweri only achieved this level of media presence in connection with his political activities, i.e. the popular initiatives for which he was happy to activate the store network, suppliers and customers. A chain of stores - a political program. Although Schweri scored some victories for himself and the Swiss economy in the fight against the cartels - there were also defeats - his strategic direction for Denner was questionable and plunged the company he had founded into a crisis.
Despite market research studies, the product range was reduced to an essential assortment that, like some stores, appeared unkempt. Staff recruitment and motivation added to this negative list. When Philippe Gaydoul took over the management of the entire group at the end of 2000, Denner's discount positioning was complete and the tight corset was tightened at all levels.
But Gaydoul's modernization push was not long in coming. The "New Denner" marketing concept was intended to win back lost market share and secure competitive advantages in the long term.
One of the first changes to the company's orientation was to upgrade the personnel factor and, as a result, to consistently focus on customer needs. The modified and expanded product range (75 percent branded products, fresh meat and 25 percent own brands at permanently low prices), which recently also included fruit and vegetables, was intended to set Denner apart from other discounters as a full-range retailer.
With a new corporate design and logo as a visual bracket
the tidy and clearly laid out stores (319 branches) of the family-owned company were given a more modern look. What was already apparent in the pilot phase was gradually confirmed in the spruced-up stores: Within months, footfall and customer loyalty increased significantly. "We have clearly succeeded in attracting numerous new customers with this concept," Gaydoul said in an interview with the market research institute IHA-GfK.
In the "Retail Trade Switzerland" issues of the Switzerland. Marketing Forum, the key figures read better and better: not only rising sales, but also higher sales area productivity despite increasing sales area. In a five-year comparison, Denner increased its sales by around 50 percent.
Finally, Denner's advertising and communication concept was completely redesigned. Apparently, however, it took a media and publicity-effective TV commercial for this change to actually be perceived as such. With the exception of the occasional comic figure Denny, the discounter's advertising lacked almost every image component. Until spring 2004, Denner stood almost without exception for pork belly advertisements and old-fashioned throwaways.
A controversial Denner TV ad, which was aimed at potential customers, but above all at the media, showed two truck drivers from competitors Coop and Migros stocking up - or even their stores? - stocking up on bulk purchases at Denner as if it were the most natural thing in the world. Denner was not known to be so humorously lively - especially not as an umbrella brand that advertises itself instead of a cheapest offer. Although the choice of theme for the discounter seems obvious, everyone - from the low-price-sensitive to the higher-earning consumer segments - seems to rate the commercial positively straight away. Denner's new self-confidence even seems to have amazed the business magazine Cash, which awarded Philippe Gaydoul two Oscars.
Denner's soul as an argumentA large part of the credit also goes to the creative agency ViznerBorel, which developed and implemented the appropriate advertising concept for the change in strategy. Just as the Swiss discounter of the first hour is now increasingly targeting middle and higher social segments, agency co-owner Lajos Vizner wants to correct the image of the larger target group with new impulses - on all channels, from the carrier bag to the image TV spot. "In our communication campaigns, we draw on the strengths and soul of the Denner brand: 'The discounter with heart and soul', which is committed to fair prices with the best price-performance ratio across the entire range," says Guillaume Borel, co-owner of ViznerBorel.
It goes without saying that the competition sometimes has to lose ground. Until recently, however, this was only done using headline subjects in print and posters. In this way, they tried to convey the Denner message in a likeable, credible and intelligent way. Be it in response to price comparisons from competitors or with occasional advertisements on social issues. The many positive reactions have proved them right in their endeavors, says Borel.
Stefan Maegli, responsible for marketing communication at Denner (see interview on the right): "With a broad-based campaign - print, posters, POS - we informed the Swiss population in the summer of 2004 and again in January of this year about significant price reductions on many branded articles and own brands." Denner is thus once again underlining its pioneering role as a "price watchdog" in the retail trade.
Denner is celebrating the completion of the renovation phase of its stores in style. Maegli followed up the comparison spot with further image strips on TV and in cinemas to make it clear to the target audience that you get more for your money at Denner. The low-budget quality that one would have expected from a discounter was deliberately avoided. Instead, the realization of the films looks very valuable, modern and of high quality. "We are convinced that these films will appeal to a new and younger, more affluent, yet price-sensitive target audience," says Guillaume Borel.
Nothing was left to chance in the production of the image TV commercials. With Michael Fueter, the agency was able to inspire one of the most talented Swiss directors. And Hansjörg Zürcher was brought on board as the "TV guru". The films "Mamma mia" and "Car" tie in with Denner's new tonality - provocative, likeable and entertaining. In "Car", for example, the shopping at Denner exceeds the permissible freight weight of the SUV. The many bags not only cause the car's axles to burst, but also cause the asphalt to collapse and the car body, along with the shopping and the grumpy woman, to disappear into the ground.
A change in strategy with consequencesThe 2004 financial year was more successful than ever before: Denner, with its 319 stores and 265 satellites, increased total sales by 11.8 percent to a record 1.843 billion francs. In the same period, sales per square meter increased by 11.6 percent to 11620 francs. The average customer purchase increased by 3.3 percent, while customer frequency rose by 8.6 percent. (la)
Slippery and misleading: It took a TV commercial for the positive innovations at Denner to be noticed.
Image change: The Denner posters are still as garish as ever, but a touch of mischief gives them more class.
Discount doesn't make you stupid - on the contrary: ViznerBorel demonstrates for Denner that Rappenspalten should be a school subject >> page 8
Luca Aloisi