You're reading: Business Sense: Better branding strategy could help many in Ukraine

Clive Woodger writes: Adoption of empty brands can come back to haunt.

Creating value in real estate isn’t all about the numbers. While finance directors are comfortable talking about rental yield, property valuations, construction and maintenance costs, they find evaluating the worth of brands more challenging.

The physical is easier to understand than the intangible.

This is a problem particularly in Ukraine, where developers tend to ignore the crucial role of branding in a real estate project. Ukraine is an increasingly competitive market, but developers are failing to react by investing in strategic branding approaches.

I was reminded of this current developer blind spot when asked last year to join a panel of judges reviewing latest and planned shopping centers in Ukraine. They asked for my views on branding and architecture for the eight centers involved.

My immediate reaction was the absence of any clear branding strategy and concept virtually in all cases. Similarly, the center buildings presented could not be ranked as architecture if your definition is the creation of buildings which are an attractive addition to the environment and a pleasure to visit and experience.

This is a problem particularly in Ukraine, where developers tend to ignore the crucial role of branding in a real estate project. Ukraine is an increasingly competitive market, but developers are failing to react by investing in strategic branding approaches.

There was little attempt to build on a name and image to create a real sense of a special destination and a distinctive center theming.

Typically exteriors were simply facades covered in tenant brand signs and interiors devoid of any attempt at customer communication and personality.

If forced to name names, Sky Mall has modern contemporary interior but no recognizable brand and communication strategy.

Externally, despite its potentially great location facing the river, there has been no attempt to build an attractive architectural landmark – simply an anonymous concrete structure covered with random tenant signs.

Sky Mall is potentially a powerful name if developed as a distinctive theme but there appears no attempt to create a real personality and reputation as a great first-choice location in Kyiv.

Names are a starting point not an end point and I noted some pleasant possibilities – Riviera, Komod, Festival, Lubava for example, whereas others were impenetrable like Global UA. This clear gap in developer aspirations and priorities and the poor understanding of what makes an attractive long-term destination brand are regrettable.

The reality is, however, when there is more competition, having simply a large trading building in a prime spot will no longer be enough.

The consumer is king, and adopting a customer-centric approach is where developers and real estate professionals have to catch up and embrace the true value and potential of effective branding to best meet their investors’, stakeholders’ and customers’ demand for added value.

A simple test of a company’s customer focus is whether the marketing director, if there is one, is on the main board. Often there is only a manager not a director which immediately indicates the value placed on the role of marketing and branding.

As the number of shopping malls in Ukraine continues to rise, competition will heat up. The ones that will succeed are those that embrace the idea that while numbers matter, they ultimately depend on the success of the brand that underpins sales.

Developing a brand requires coordinating its development through marketing and public relations – sadly, difficult department activities to defend when executives are asking for numbers to demonstrate performance and return on investment.

This is ironic in today’s world of brand-led commercial activity. While it is accepted that Coca Cola’s major financial valuation is based on its brand equity rather than its physical assets, the same logic is rare in real estate development.

Ultimately, all value is based on attaining maximum sales. A shopping center that attracts the best tenants and enjoys the highest visitor purchases creates the optimum capital value.

What drives this? A center’s visitor experience. Every touch point creates the potential brand perception – the image and reputation required to sustain and improve repeats visits and optimum tenant turnovers. The architecture, visitor journey – digital and physical – and culture of the centre’s staff and management all directly contribute to the destination brand experience – the centre’s brand equity and capital value.

Architects are the first people who need to understand this principle for new centers if branding is not to be reduced to cosmetic packaging and marketing activity. The architecture, planning and environment of a centre are the most expensive and long-term aspects of creating venue’s distinctive character and profile.

Accountants understand commercialization – the income producing activities apart from rentals. But unfortunately this is often viewed as simply an operationally based sales opportunity, selling space and activities to the highest bidder.

This results in elevations covered with uncontrolled tenant signs and advertising, screens full of indiscriminate advertising and malls jammed with poorly planned kiosks. The result is frequently a potential total disconnect between strategic longer-term brand equity development and short-term tactical promotion to drive footfall and sales.

Achieving an effective balance is vital if hard-won reputation is not to be lost overnight with inappropriate image-diluting initiatives.

As the number of shopping malls in Ukraine continues to rise, competition will heat up. The ones that will succeed are those that embrace the idea that while numbers matter, they ultimately depend on the success of the brand that underpins sales.


Clive Woodger is director at SCG London, a British brand agency and consultancy based in London. He can be reached at [email protected].