The Source is trying to persuade shoppers to think outside the big box.
The electronics retailer – which operates out of a network of more than 700 stores in locations such as malls across the country – has launched an advertising campaign for the holiday season, a crucial sales period, that represents a major increase in its marketing budget.
The reason for the ad push is that The Source is battling a fundamental awareness problem: Its brand is simply not top of mind for many consumers thinking of gadget purchases. Because it has not advertised much in a very noisy category, many consumers don’t think of The Source. Those who do associate it with the dusty image of its former owners.
“One of the key challenges we have – having some baggage from the RadioShack days – is people don’t necessarily see us as being a place for ‘new and now,’” said Ron Craig, who came on board as vice-president of marketing last summer, with a mission to breathe new life into the brand.
The Source was previously owned by Radio Shack, and then sold to Circuit City Stores Inc. in 2004. In 2009, in the midst of bankruptcy proceedings, Circuit City sold the Canadian chain to Bell Canada for “considerably less” than the $334-million it had paid.
The chain changed hands, and names, and had associations with financially troubled corporate parents, accounting for the “baggage.” So did the image of the old Radio Shack stores, which were mostly known for store-brand items, electronic accessories, and a small selection.
The company’s new ads emphasize high-demand products available at Source stores – such as the Samsung tablet and LG big-screen televisions – to break away from those assumptions.
“We see that with other brands that have had different owners – your brand can get a little bit lost,” said Jill Nykoliation, partner and president of the retailer’s Toronto-based ad agency, Juniper Park.
“Tapping into consumer desire for these products and these brands is what it’s about,” she said.
The advertising investment is a significant step up from recent years. The Source has launched ads on television, radio, online and in-store, along with regular flyers; has done a promotion with MuchMusic; and sponsored a Cineplex “gear guide” feature on hot gadgets for the holidays as part of the cinema chain’s pre-show.
The Source’s aggressive approach has had some early indications that the message may be getting through. It launched just before Black Friday, part of the U.S. Thanksgiving holiday weekend that kicks off the end-of-year shopping frenzy.
As with some other Canadian retailers, The Source took advantage of consumer awareness of the U.S. sales and ran its own promotions. Its Black Friday sales rose 39 per cent compared with last year, and online sales increased 47 per cent. For the following week, sales more than doubled compared with the same period in 2011.
The early indicators are not proof that the new marketing direction will work, but the ads represent what Mr. Craig hopes will amp up The Source’s presence against big competitive advertisers such as Future Shop Ltd. and Best Buy Co. Inc., along with well-established online players.
“We haven’t really built a brand identity,” Mr. Craig said. “That’s what we’re trying to do now.”