We don’t often (if ever) link to an article on another agency’s blog - but this little nugget from Wolff Olins is a succinct example of how a great brand reputation can transcend the category a business operates in:

Tesco are selling used cars. Many leaders in the car industry used to think that a retailer like Tesco would never do such a thing ‘because they couldn’t live with the margins’. Hmm.

Tesco are going into banking. Have gone into mobile phones. Have gone into financial services, clothing, furniture, electricals, opticians, jewelery and even film production.

Is there anything the Tesco brand can’t get into? And is there any brand that shouldn’t see a brand like Tesco as potential competitors?

Brands like Tesco, Google, Apple, Tata, Virgin are defined less by what they do, and more by what they believe. This makes them immensely powerful as it allows them to gatecrash categories which have grown complacent. If you have a trusted brand you can enter – pretty much – whatever category you like.

As Tesco’s move into car retailing shows it is much easier to buy capability than to build credibility. Which means it is harder for bank to become a trusted brand than it is for a trusted brand to become a bank.

The brands that will win in the future will build deep, trusted relationships with customers and expand what they do to fill more of those customer needs. The measure of success is now share of wallet – not market share.

(Source: wolffolinsblog)