Monday 6 August 2012

Who counts for the shopper when 33% is not the same as 33%?

Superficially, if some numerate NAMs feel that 33% off-the-price is about the same as 33% extra free, what hope has the shopper?

(For those who cannot wait, run the numbers as follows:
Assume Costa charge £3 for three shots of expresso
Deal 1  gets you three shots for £2 i.e. £0.66 a shot
Deal 2  gets you four shots for £3 i.e. £0.75 a shot)
Deal 1 is therefore marginally better for your pocket, and your blood pressure…

All of this suggests that by emphasising ‘extra free’, retailers can create the same impact on the consumer, yet earn more revenue per visit….
However, deeper down, this goes to the heart of the supplier-retailer-shopper relationship, the issue of trust in brand and shop equity..

Essentially, consumer-shoppers are in survival mode, and despite their recent experiences at the hands of politicians and bankers, ideally want to save time by placing their trust in brands and shops, until experience proves otherwise.
In other words, in order to maintain that trust, and minimise festering discontent, it is important that promotions anticipate 100% transparency.
This means educating the consumer as to the real value, in order that they can outsource part of their decision-making, leaving them more time to deal with the real rogues…

Otherwise, some smart-apped savvy consumer will tumble to the deception of ‘extra-free’, will not be able to bottle it up, and like all bad news…..

For 10 other ways that shoppers are weak at maths, see The Atlantic 
Thanks to Brian Loeb for the link: See FMCG Discussion Group

No comments: