The release of the 2012 Engager Survey, conducted by independent marketing strategy consultancy Yellowwood, identified several global trends in shopper behaviour that have also changed the way South Africans shop. Two of these are the increased trust that private labels enjoy and what this might mean to the brand managers of products, as well as a change in the shopping patterns of South Africans who are now more inclined to ‘convenience shop.’
One of the most significant trends is the rise of the private label or what is more commonly known in South Africa, as the no-name brand. The world-wide recession has encouraged the growth in popularity of the private label. In addition, there is a significant increase in brand-building activity by the retail brand, which enjoys high levels of trust among consumers. Retail brands have created brand differentiation and engagement strategies that are very convincing – for example, Woolworths with its drive to provide strong value-based solutions to shoppers (e.g. Eat in for 4 for R150 or the use of their store cards to access instant 10%-off rewards on a wide range of basics) -, the creation of a loyalty programme by Pick ‘n Pay and the repositioning of Checkers over the past few years to encourage shoppers to reconsider their shopping behaviour. All of this has fuelled greater brand loyalty and trust in the retailer brand rather than the product. And during hard times, consumers have experimented more with private labels and discovered, in many instances, that there are indeed limited functional differences thanks to pressure from the retailers on manufactures to up the game in what they provide under private labels. In short, more people feel more confident and more comfortable to purchase a private label item than ever before – resulting in product brand owners having to rethink their strategies in driving shopper switching.
This is especially true in low engagement categories such as tinned foods, where shoppers are more inclined to switch due to the low risk in experimenting with brands and limited reasons why they shouldn’t. However, it may also be true in categories such as clothing – where retailers have capitalised on the middle market – offering product between the high-end designer goods and the mass market chain store items. For example, the ‘W’ range for women offered by Woolworths or the In Wear range offered by Truworths, enticing shoppers away from brand name labels whilst still offering emotive benefits such as quality and status.
The response from branded products to private labels has for the most part been a discounting strategy in order to compete on price. This includes price promotions, two-for-one offers, etc. The implications of extended price discounting is more than just the effect on bottom line ultimately eroding brand value and makes charging a premium in the future very difficult. In high engagement categories, effort would be better spent on affirming brand choices at point of purchase, through shopper campaigns that focus on enhancing the emotional connection with brand and link to the brand values – ensuring that these campaigns are less reliant on price, but still effective in impacting shopper behaviour. Promotions could, for example, be linked to seasonal events such as linking washing powder promotions with Women’s Day events or even, social initiatives such as the ‘Take A Girl Child To Work’ campaign or even, with participation in online forums that benefit women. In low engagement categories, the strategy needs to be aimed at disrupting habitual behaviour. Whilst price is quite effective at doing this in low engagement categories, you need to consider the longer term implications of this – can you afford to maintain a strong price promotion that extends across at least three shopping cycles? The consumer psychologists suggest it takes approximately three purchase occasions to form a new shopping habit. Can you afford to discount your brand for three months, if you are part of the monthly grocery shop? Ideally, marketers should be looking for more innovative and sustainable mechanisms to encourage shoppers to re-evaluate their choices at point of purchase.
Another trend that has had a big impact in South Africa is the ‘shop-for-convenience’ factor. This trend sees fewer households embarking on the monthly ‘big shop’ in hyper stores but rather doing numerous small trips to the shops, as and when needed. This is as a result of a range of factors including changed store formats, where local supermarket chains have opened smaller stores in more locations closer to where people live plus longer shopping hours and mini-promotional offers throughout the month.
What this means for brands is that shoppers are making fewer and fewer decisions in the aisles, i.e. more decisions are made before the shopper even leaves the house. For example: When considering what to make for dinner, most women will consider what they have in the pantry and then only purchase the additional ingredients required in order to complete the meal. Hence the appeal of mobile apps, meal planners and basket offers to so many female shoppers across the globe.
This means that swaying the shopper’s decision at point-of-purchase is more difficult than ever before and therefore, that the brand needs to be in the consideration set long before the shopper gets to the shelf. Therefore, it is no surprise that consistently, across all categories in the Engager 2012 survey, the emotional connection between the consumer & her brand was identified as the leading driver of high brand engagement. An “emotional connection” is defined as having a deep-seated relevance and resonance with the consumer. However, the emotional connection must be supported by other factors. When we review the other drivers of engagement, we find that emotion is supported by a high level of brand understanding (I know what you offer and what your promise is), integrity (you deliver on your promises) and peer group advocacy (I see & hear my peers engaging with your brand). The top scoring brands in each category such as McCain, Koo and Clover have successfully built well-rounded relationships with shoppers.
This doesn’t in any way make in-store marketing irrelevant but implies a difference in the way it is used.– from reinforcing and reassuring shoppers in high engagement categories, to influencing behaviour change in low engagement categories.
Shopper behaviour – in South Africa and globally – is in a state of constant evolution in response to changed lifestyles and product innovations. We are now studying and have a better understanding of shopper behaviour than ever before. Therefore the way in which we market to shoppers and the relationship between in-store marketing and brand-building must continuously be on the radar of brand managers in order to convert shoppers into brand loyalists.
For more information, contact Yellowwood on JHB , CT or visit www.ywood.co.za
