Fair Exchange: How the tough economy is changing retail
17 Apr 2014|Erna George
Being aware of consumers’ financial situation is a critical part of marketing in 2014. Frugal consumers are a significant reality and now, more so than ever, it is worth their while — and easier — to shop around, trade up and down the value chain and switch brands. If you don’t alter your marketing mix, isn’t it likely that your brand will be left at the side lines?
Everyone is feeling the pinch
The past few months, in speaking to consumers, friends and family, it seems everyone is feeling the pinch and is frustrated (and a little nervous) about the ever-increasing price of living. What with adverse exchange rates, e-tolls, petrol and therefore other costs set to continue rising, things aren’t likely to get better soon.
Lately, when I’ve gone shopping to bulk-buy after voraciously seeking specials in broadsheets, I’ve been finding large craters on the shelves of my local supermarket, where the bargains have clearly been hunted out by others like me. But where have they all come from? This was not the case months ago.
I’ve started hearing people, who never before were concerned about pricing at this level, talk about price-comparison/special cataloguing websites such as Price Check or Guzzle — and they’re even advertised on TV. There are more people using budget apps, even if for part of the month only.
How will you be remembered?
The challenge for brands became even more abundantly clear. When things do get better, will you be remembered as the brand that showed empathy and acted to help or the brand that simply ignored consumer pain and watched?
What’s even clearer is that people are talking about those stores that are winning them over — brands offering extra value via free gifts or x% free are winning hearts by truly championing against the harsh reality of slow-economy South Africa.
Surprisingly enough, one of these retailers has been Woolworths for the past few years, smartly shaping new offers from across its portfolio to target customers across income segments and interests (eg ‘Eat in for 4 for under R150’ and, before that, ‘Feed 4 for R100’,). This in no way detracts from the premium nature of the brand — it’s the same great food and it’s a fairly convenient meal for R37.50 a head, all bundled into a comprehensive offer and the thinking all done for the customer. Good value in the light of increasing takeaway prices.
Competitors following suit
And Woolworths’ competitors are following suit (isn’t imitation the best form of flattery?):
- Pick n Pay has ‘Shoestring suppers for under R40’ in its Fresh Living magazine and recipes sent via mail to their database. Granted, these still need to be cooked but the fact that it is packaged for consumers does help.
- Good ol’ ‘Checker, Checkers’ has an ATL ad campaign that highlights how much it has saved its customers vs the actual inflation rate. I’m not sure that this a message that 100% (or even close to that) of its customer base will understand but the focus on ‘Checkers’ bulk purchases has resulted in R1 billion in price increases being prevented from reaching consumers — so don’t change your lifestyle, change your supermarket’ has something in it and may appeal to many.
Recent CMO survey
Added Value’s recent CMO survey supports all of this:
- Building a diverse portfolio of brands, each with its own bespoke value proposition, is now more important than ever before, in an environment where we are seeing constant switching by consumers up and down the brand value chain.
- Value can come in different guises.
– Consider added value, bundled deals, rewards programmes and more to drive a value message
– Using your total brand experience (convenience, accessible luxury or enjoyment or instant gratification as a surprise for already loyal consumers) can help build more value into your proposition.
Shape your messaging to show empathy and support to put the finishing touches to your onslaught and, when the market turns, watch your profits, brand loyalty scores and consumer base soar.
Erna George is the business director heading up quality research at brand development and marketing insight consultancy Added Value.
Originally written for MarkLives.comprev next