57% of these shoppers look out for lowest prices when they go shopping.
This is according to the latest insights provided by TGI 2007c – which enables us for the first time to truly answer the question on price sensitivity levels of shoppers.
With the rate hikes in the last year affecting shoppers’ pockets greatly – the need to
understand the sensitivity of South African shoppers has become even more important
part of our marketing function. In all our minds, the big questions are:
Will they still be loyal to my brand – or will they be swayed to buy another because of price?
Will they consider my brand, now that money is too “tight to mention”?
The current perception making shopping rounds of course is that shoppers are not that brand conscious when it comes to household groceries – in fact – a greater percentage of them will switch to a cheaper brand, even more so know given the status quo of our economy. A great worry for most of us managing brands within such a category.
MYTH OR FACT?
Well, a few facts to consider:
57% of SA main shoppers budget for every cent when doing the household shopping.
However only 38% of SA main shoppers tend to buy the cheapest household cleaning products.
And whilst 62% average shoppers buying well-known household products…
49% average shoppers are willing to try new household products.
So, whilst your average shopper is likely to be looking out for the cheapest household cleaning product – a certain type of a shopper is still looking to buy their favourite brand, hopefully at a discounted price.
What about other categories? How do shoppers who always use money off coupons and vouchers feel about discounting within these categories?
So, what type of shopper are you talking to?
With 68% of shoppers always looking out for Instore promotions when instore – is it not time to revisit your Instore advertising strategy – to make sure that your message ties in with their budgetary need or is it constraints?
We’ve watched these men push trolleys daily selling veggies to the community ekasi (in the townships) ringing bells to make consumers aware of their presence. Some of us use them for top-up shopping i.e “oopsy I forgot to buy lettuce from Pick ‘n Pay so let me get it from this guy”. Some in the community literally stand there and do all of their veggies’ bulk shopping i.e. “all my 7 salads for Sunday lunch I am going to buy from this man”. These men have literally created a sub-category of distribution by creating a mobile veggies market right there!
In the burbs on the other hand, there is an abundance of outlets like Fruit and Veg city – in fact the brand has become synonymous with quality & fresh produce to shoppers frequenting these outlets. So whilst brands like this one may be scarce if not even absent in the township – fact is consumers there are consuming products sold in their outlets too AND there is a shopping environment that caters to shoppers wanting to buy these products!
It is also no lie that every seller would like a piece of growing spending of “so-called black” consumers – the question is are marketers aware of these yawning opportunities taking place in these townships to capitalise on?
How could one capitalise on such? Well, through CSI strategies we (fresh produce brands) find ways of partnering with these young men using a single-minded ROI business concept. Or even better yet enter this market by firstly piggy-baggin on this existing distribution strategy where we up the means of selling tools used by these guys whilst branding them to create an awareness of our fresh produce brand as endorsers of services rendered by these men?
An industry peer asked this question on Linked-in and the first thought that came to my mind in answering him was: Brand Strategy is EVERYTHING!
It is, as I’m certain most of us are also aware, the compass citing direction to be followed in managing the growth of a brand within an industry, in spite of the environmental challenges faced by that brand’s business.
Unfortunately, some of the “big brands” have assumed “eternity leadership on market share” in their categories (read relaxed and thought they knew and owned the consumer better than their competitors). Yet with evolving/fragmentation of the media landscape and consumer behavioural patterns – your business strategy has to change for your brand to remain top of mind. It has to fight to be positioned as being in touch with what’s happening in patterns of consumption by your customers and able to meet the needs of these customers.
So, brands that are dying – are dying because they have continued to rely heavily on service providers/think-tanks, that like them, have not kept up with global trends/changes shaping this “emotional economy” we live. In turn strategies developed have been out-dated!
Their death is as result of brand strategies that are packaged with no or very little relevance, thoroughfare thinking and engaging of these global market insights.
The Break-up video in this article says it all!
So, perhaps the question here should not be is brand strategy headed for extinction – but rather who/what is to blame for golden brands of yesteryears not being relevant today!
It truly is fascinating to see how as the world “gains more and more turbulence and instability, more and more humans are truly seeking to feel safe” as Seth puts it.
Nothing out of the ordinary in that – as consumers we are looking for “haven spaces” when feeling vulnerable.
This though, does not mean that businesses have to play it safe. Unfortunately though, that has become the norm with more and more businesses continuing to play it safe - cutting budgets, watching, waiting, not wanting to make the first move,, until….so and so makes the first move.
Funny thing though is that it is in that “cocooned safe business-centric strategy” approach we embark on as marketers and business owners, that “we forget” that consumers and alike are seeking consumption of experiences and products that make them forget for a little while about this instability.
The Freedom emotional driver becomes so so fundamental in the positioning of brands to such a vulnerable audience – why? Because these consumers seek escape, breaking out, feeling un-burdurned. Marc Gobe in his book Brand Jam speaks of the fact that “freedom brands will connect with people who are in need to explore…and the consumer motivation is to break out.”
Question is, will you as a business owner continue to play it safe – in your product packaging and marketing thereof?
OR will you be different and meet the unmet need of “freedom gratification” currently a yawning gap felt by a growing segment of consumers out there!
Just think of the successful brands who have in fact flourished in the last 2 – 4 years by taking this positioning to heart in their business models…
Here’s a tip-not-to-be-forgotten: your business has to redefine this “freedom” into its business-model though – after all you cannot sell what you do not live as a value…
To be free OR not to B free….that is the question…
You’ve got an awesome strategy – everyone has applauded your presentation of it. Is its success guaranteed?
Sad to say - absolutely not.
So – what factors should you avoid which often lead to poor execution of marketing strategies:
NUMBER 1: PLANNING
We are continuously being taken to task for submitting thick wads of paper outlining our “poetic summation” (as sum would refer to our strategic efforts) of how to position brands. Yet we do no leave behind succinct, clear, simplified versions of how to action the proposed strategies.
That’s why strategy as a field continues to be belittled as we ourselves are not often rising to the benchmark standards of providing actionable plans to those who will be implementing – if we are not going to be there!
NUMBER 2: PROFITABLE STRATEGIES
Again execution whose measurement is not tied into an ROI Branding Solution proposition – will be poor when assessed by those whose single-minded concern, as should be ours, the bottom line.
You provide a strategy that highlights how change should be implemented but do not align that change to benefits of profits – then execution in the real business sense will be judged as poor as it has not truly met those business needs.
NUMBER 3: FRUIT BASKET STRATEGY SERVICE PROVISION
We are good at walking into our clients’ offers with the “intent” of getting a clear understanding of what are the true challenges of their businesses. But the real truth is that we drag out that “Fruit basket service provision’ of ours as we walk into their offices already having concluded that we know what they need even before we EVEN begin to engage with them.
By fruit basket – you know that set mindset of thinking – somehow proposing the same strategic solution albeit you’re dealing with a different business!
Seth put it quite well the other day and said “No business shuld buy a solution for a problem they don’t have.”
And yet, how often have we seen activated strategies allowed by marketing heads which you can tell has been the result of “allowing your marketing service provider 2 convince u that they “have the solution” without taking the time to truly understand yo problem. And a couple of wasted rands later the poor client is still sitting with your problem which they r still not getting!
So poor planning, strategy that’s not a profit-dirver and not business centric are must-avoids if you want to satisfy your client’s with executions that get everyone hearing the k’ching sound of profits!
ONLY A FRACTION OF SHOPPERS’ TIME IS SPENT IN THE ACTUAL PURCHASE PROCESS
The million dollar question to ask is how can we as marketers reduce the time wasted by shoppers when they are instore?
Before we answer this question though, what is it that it eating up shoppers’ time instore?
• Up to 60% of the shopping trip is spent in “visual cruising”, when shoppers look frantically up and down, left and right to locate their intended purchase.
• Up to 42% is spent in “visual facing of the shelf”, where the shopper looks from left to right to centre – again, looking for something or other.
It is shoppers’ battle to locate our products when instore that is responsible for all that wasted time.
With up to 80% of wasted time instore resulting from shoppers’ simply trying to locate your product, you can forget about driving incremental sales.
All your shoppers end up with is: increased ANGST whilst trying to locate your product;spending more TIME than they intended resulting in less MONEY being spent to buy that product in the end. Because the faster you sell to a shopper, the more you will sell.
TNS Sorensen shared these invaluable insights at the Instore Marketing Conference held in Las Vegas last November.
They visually deconstructed these three shopping currencies – angst, time, and money – which influence how much shoppers spend instore, to help explain the importance of POP media in: • Helping shoppers locate your products instore – thereby reducing time spent to meet their needs.
• Helping shoppers complete their shopping with less if no angst from aggravation caused by the effort taken to make a decision whilst trying to locate your product.
• Enticing them to buy more whilst instore as a result of having completed the first purchase a lot quicker.
As if that’s not enough of a challenge, we have to deal with brand extensions instore. We all know the old marketing adage: Give shoppers options on shelf to choose from and they will DEFINITELY select something out of what we are offering them instore. Right?
Research conducted using two tables displaying jam varieties for tasting with the intent of selling the jams proved this one fact: the table with half the varieties of jam led to 30% more jam purchases.
This study helps us conclude that a large array of options may actually discourage shoppers because it creates an increase in the effort needed to make a decision.
Fewer purchase options lead to ten times more purchases.
If you can’t do anything about your brand-extension strategy however, you can at least do something to ensure that you do NOT confuse the shopper, or better yet, you can actually help them buy your product using instore media.
So, invariably you should be thinking of instore advertising plans to help shoppers locate your product instore in less the time and less the angst whilst ending up spending more!!!
52% of these execs also noted that, in the past year, their instore marketing-related budgets had increased.
This is according to the International 2008 Trends Report (www.instoremarketer.org) which asked marketers about the role of POP in their budgetary planning; their reasons for using POP and of course the sort of research insights shaping their activities instore.
It is interesting to note when looking at the data in the report, how buoyant senior execs & directors of marketing departments are about the current and future use of POP media (more so when compared to junior management).
The senior guys are now walking the talk when it comes to the value perceived in instore media.
What creative elements are mandatory in 2008 when creating POP displays?
The top four elements noted were product imagery, price promotion, description of product benefits and features. A seemingly obvious fact, often overlooked by some of us in South Africa is that instore advertising has to command attention in a cluttered environment, deliver a strategic message and close the sale in seconds.
Pretty obvious fact right?
While that may seem obvious to most of you, we could all do with these reminders:
Time is not your side – shoppers don’t have the time to “ponder” over your message to get it.
Shoppers are in a “what’s in it for me” mood – so your offer or benefit has to register within seconds in order to close the sale.
You want the shopper to look at your brand – after all international research cites that a shopper merely looking at your brand increases consideration of your brand by 30 – 120% and of course this POP message is intended to get them to notice your brand.
So, why we sometimes want to talk to shoppers like they are lazing about as couch potatoes beats me sometimes and I know I’m not alone on this one.
So, what else did these trend-setters have to say about this environment and the importance of advertising in it?
to “Sales/scanner data research results has the most influence on the marketing and sales departments’ decision-making when implementing POP activities.”
54% of those interviewed placed more emphasis on POP displays in 2007 – rating this media third after packaging (60% and internet marketing (59%) with traditional media following with 42% for print ads and 14% for TV ads.
54% of marketers are allocating more dollars to more displays vs. 20% who are placing only more dollars on fewer displays.
32% use POP displays primarily for driving communication on new product innovation, whilst 30% use it for brand building communication.
There was a time when the marketer’s first objective for driving POP activities instore was “to lift sales.” Ultimately, that’s everyone’s ultimate objective. But if these results are anything to go by, then marketers are starting to understand that just like traditional media, instore POP has a role to play in continuing (not just once-off bursts per year) to entice, remind and sway shoppers to buy their brand/s. Marketers are realising that losing market share is not because a competitor has stolen the market share away from them, but largely because they need to continuously maintain their brands in the minds of these shoppers.
That is brand building. And when you do it in the instore environment, you get the added benefit of enabling your brand-building POP message to close the sale.
So, with top management putting their stamp of approval on the increased use of instore media we should see companies charging ahead and achieving their ultimate objective – closing the sale with incremental purchases.
There is only so much money out there and when international trends are showing there is “greater emphasis on instore vs. outbound media”, it’s only a matter of time before we Mzanzi guys follow suit with what makes sales sense.
Interesting times ahead of us!
Certainly, the retail landscape will transform dramatically, driven by the rapid and almost incredible evolution of current technologies. In attempting a glimpse into the future of shopping, the following are some the questions that are being asked by industry experts:
- Which innovations could become part of everyday life?
- Do shoppers see themselves going online to participate in product development?
- Would they join massive online collaborative shopping communities to combine their buying power with other shoppers?
- Will they join social networks to share information about the hottest trends, stores and products?
- Is it likely that dressing rooms in clothing stores will become interactive?
- What role will mobile phones play in shopping decisions?
- How far away is the networked refrigerator that tells us when we are out of milk?
A dozen innovations were looked at during research done by TNS Research Surveys in 2008, which questioned more than 4 600 primary household shoppers in eight major retail markets across the world. These shoppers were asked to comment on each innovation; saying how appealing it was to them, the likelihood of their using it, the extent to which they found the innovation new, and the extent to which they believe in its use. They then voted for which should take first place.
The 12 innovations looked at were:
- Biometric fingerprint payment which lets clients pay for purchases using their fingerprint;
- Interactive dressing room help where customers use a digital touchscreen to speak to the sales assistant;
- Smart carts which let shoppers locate products instore, check prices and promotions, upload recipes and even go speedily through the checkout;
- 3D body scan whereby a customer’s body is scanned and recommendations made on specific clothes that are likely to fit well;
- Online collaborations where buyers go online to tell the manufacturer about the products they want and post ideas on how existing products can be improved;
- Buying power online in which shoppers join online collaborative communities to aggregate their buying power with other shoppers;
- Networked shopping which enables networked devices in the home – like refrigerators – to monitor what products shoppers use, create shopping lists and communicate with other devices to arrange deliveries;
- Interactive dressing room mirror which allows shoppers to see how they will look in an outfit without trying it on;
- Shopping by mobile phone whereby customers in a remote location use their mobile device to activate a virtual ‘shopping trip’, place orders and arrange delivery;
- Holographic sales assistant where shoppers interact with instore holograms that can answer questions and facilitate merchandise transactions;
- Shopping social network websites which enable consumers to join a social network site to find the hottest stores, trends and products;
- Product and sales info via cellphone whereby customers walking near their favourite shops will be told, via their mobile phone, about products, sales and special promotions.
After reviewing the survey’s results and discussing these innovations with industry players at the Instore Marketing Conference in Las Vegas late last year, it became clear that these innovations are not that far-fetched. If anything, quite a number of them are already a reality in some limited form.
With 2015 just around the corner, the question to ask ourselves as retail marketers is: are we being visionary enough to ensure that our shoppers will find our offering in line with their needs and desires?
For example, with social network sites aimed at increasing association and interaction with global shoppers, it is important that FMCG manufacturers vigilantly monitor these sites to keep a finger on the consumer pulse. Even more important, though, is the need to act speedily on these insights of what to develop and stock. If the pace of producing from concept to on-shelf is not fast enough, it will be difficult to meet shoppers’ needs and maintain a competitive edge.
Another area which will demand some thought is that of networked home devices such as refrigerators. These will monitor what products shoppers use, create shopping lists and communicate with other devices to arrange deliveries. The question is, what will our packaging have to look like in order to facilitate these capabilities, and how do we introduce extensions of our existing offerings to cater for these devices?
According to Pat McCann, European head of TNS Retail and Shopper: “As this method of replenishing the home becomes prevalent, there will be a greater likelihood of new products failing. Innovation will come from new category invention and manufacturers’ product development processes will be very different – with potentially wide-ranging implications”.
One thing is certain, we are living in times of dramatic change. Siemon Scamell-Katz of TNS Magasin, the international shopper strategy consultancy, concludes with these apt thoughts on the future: “Each and every technological advance will have to be filtered through the lens of the shopper. What are you designing for these shoppers? And most importantly, are you looking at it through the lens of a shopper?”water!