Showing posts with label savvy consumer. Show all posts
Showing posts with label savvy consumer. Show all posts

Tuesday 5 March 2019

Making Sense of the Savvy Consumer in Flatline….

Given ten years of market confusion, consumers are now beginning to make some sense of the financial turmoil, are developing increasing confidence in their common sense when making purchasing decisions, and those who still have jobs are working longer and harder, and possibly for less money.

As a result, they are relating every £1 of ‘discretionary’ expenditure to their current and future earnings, assessing the opportunity-cost in terms of alternative uses of the money, like never before…

They are raising their own performance standards, and using them as a measure against which to evaluate every product and service offering, refusing ever to outsource their decision-making to marketers and retailers again.

In addition, mobile-isation of market-comparison has made it easier for the savvy consumer-shopper to evaluate alternative offerings objectively and accurately, and is guiding their expectations of performance in the process.

The New Savvy Consumers

Welcome to the new savvy consumers, the professional shoppers, discerning buyers who are simply seeking to obtain satisfaction of their needs in an open market, at a price that compares well with alternatives available, based upon simple common sense, and trust in no one....

As the newly emerging primary driver of demand, the savvy consumers have to be persuaded that their needs are being met, for a fair price, and that their purchases deliver more than expected in practice. In other words, this new consumer, if willing to spend, is unwilling to accept anything short of good value for money.

The destruction of consumer-trust

Consumer-trust, having been severely undermined by the bankers and politicians, is now at an all time low, in that consumers realise that they have been betrayed by the ‘pillars of society’, and they are no longer prepared to ignore the learnings….

As a result, they now believe that in the final analysis, they can no longer afford to risk outsourcing purchasing decisions to marketers and sellers of goods and services. In other words, the consumer is now using basic common sense to evaluate what they get for their money and is rejecting second-best….

A real opportunity for the good guys

If this is seems like more doom and gloom, then we are simply not expressing it properly…

In fact, we believe that the emergence of the savvy consumer is the most positive and exciting social development of the current cash crisis. We are now living through the evolution of a commonsense approach to buying goods and services by increasingly informed consumers, who are prepared to vote with their feet. This is a development that will obviously challenge traditional marketing and selling practices, but will provide significant opportunities for those suppliers and retailers that are prepared go back to basics, factor this new reality into their product offerings, and always strive to exceed consumer expectation…

In practice, this means that the consumer is providing an entirely new basis for suppliers to re-evaluate every SKU in their portfolios against available alternatives, and ruthlessly eliminate anything that does not clearly demonstrate a total match with latest consumer need, made available in a way that shoppers want to buy, better than the competition. It follows that the customer portfolio has to be re-assessed from the same point-of-view, again with the aim of identifying and cultivating trading partners that are capable of expressing the brand offering in a way that can meet consumer-shopper needs at point-of-sale, profitably.

This elimination of consumer-brand mismatch and product overlap from supplier portfolios will reduce supplier costs, allowing liberated resources to be invested in winner brands with increased emphasis upon consumer satisfaction, thereby selling more to current savvy consumers, and making it easier to sell new products to those increasingly trusting and loyal users.

In the same way, building trade partnerships with like-minded retailers has to present joint-opportunities to optimise common-sense market need, while others await a return to ‘normal’…

Thursday 11 February 2016

Confusing promos morphing into savvy-shopper alienation

If making promos difficult to compare is the objective, then stakeholder efforts are working well, in that Watchdog deal-quizzing of consumers found that just one in 50 was able to choose the cheapest option....

If driving sales in flat-line markets is the objective, then, according to the Daily Mail, then such confusion is causing shoppers to spend an extra £1,200/annum.

                                                                                                                    Source: The Daily Mail

What no one is measuring is the negative impact on brand equity amid the creeping suspicion of being misled. Even more serious is the fact that, in the absence of effective self-regulation - last year, the Competition and Markets Authority (CMA) said it had found evidence of misleading supermarket promotions following investigations into a super-complaint submitted to the regulator by consumer watchdog Which? - the government could intervene in order to clarify the position for shoppers...

Think bureaucracy and 'government language' to explore the implications.

How much better if suppliers and retailers worked together to attempt to retrieve some of their respective brand equity by aiming at clarity and sustainable like-with-like comparison of promos, before the government is forced to assist...

Wednesday 11 March 2015

The Tesco-Schweppes Pricing Spat - really about ownership of the Consumer?

In my early days in marketing, I was always surprised that my UK colleagues agonised for hours re every shelf-price increase of a few pence, whilst my continental colleagues focused on back margin and hardly touched on shelf prices. The answer came in a negotiation session with a major French retailer when a reference to shelf-price impact was slapped down with ‘when we buy your product, the selling price is our business. Now tell me about the back margin’…

In this era of post-modern retail – think game-changing 2007 financial crisis, a new world of multiplicity, diversity, contingency, fragmentation and rupture which accepts that we now live in a state of perpetual incompleteness and the permanently unresolved – an era where the 4x4 consumer has morphed into a basket-carrying shopper searching out daily bargains, and consumer-ownership has become the issue.

In other words, Tesco – and later the other mults – are simply clearing the decks, simplifying the offering and taking control of the shelf, especially pricing.

In terms of the consumer, if ‘ownership’ is defined by extent of knowledge, then retailers combining Clubcard and scanning data to produce a shopper-profile that includes name, address, age, sex, family structure, income-level, state-of-health, recreations and travel, dietary habits, insurance, debt-profile and bank-balance, have to have a greater claim to ownership of the consumer than a marketer knowing that the consumer is probably grey-haired and living alone on the outskirts of Oxford, two children having left home… This was a battle for ownership that was lost way before 2008.

In other words, we now have to accept that a retailer in the midst of a 30% product cull, and in the rifle-sights of the SFO and GCA, is not going to take any prisoners, much less tolerate any interference re how they market to ‘their’ consumer-shopper...

In reality, however, the consumer is now ‘ownerless’, savvy, willing and able to shop around, and is determined to accept nothing less than demonstrable value for money…

Welcome to the new world of post-modern retail…

Friday 6 March 2015

Segment 7: The older savvy consumer – a need for understanding?

In our world of in-store theatre, with consumer-shoppers merely playing their parts during store visits, it might be useful to segregate them into seven ages for closer examination.

Given the increasing age-gap between older shoppers and those charged with meeting their needs, it might be useful to start with Segment 7, our older members of population.

By understanding the difference between their willingness and ability to buy, and taking into account the real factors determining their purchasing behaviour, it may be possible for suppliers and retailers to do more about optimising their store visits. 

The following extract from Nora Ephron’s ‘I Remember Nothing’ may provide new insights…

“In these days of physical fitness, hair dye, and plastic surgery, you can live much of your life without feeling or even looking old. But then one day, your knee goes, or your shoulder, or your back, or your hip. Your hot flashes come to an end; things droop. Spots appear. Your cleavage looks like a peach pit. If your elbows faced forward, you would kill yourself. You’re two inches shorter than you used to be. You’re ten pounds fatter and you cannot lose a pound of it to save your soul. 

Your hands don’t work as well as they once did and you can’t open bottles, jars, wrappers, and especially those gadgets that are encased tightly in what seems to be molded Mylar. If you were stranded on a desert island and your food were sealed in plastic packaging, you would starve to death. You take so many pills in the morning you don’t have room for breakfast.

You lose close friends and discover one of the worst truths of old age: they’re irreplaceable. People who run four miles a day and eat only nuts and berries drop dead. People who drink a quart of whiskey and smoke two packs of cigarettes a day drop dead. You are suddenly in a lottery, the ultimate game of chance, and someday your luck will run out. Everybody dies. There’s nothing you can do about it. Whether or not you eat six almonds a day. Whether or not you believe in God.” 

Nora Ephron: I Remember Nothing

Sunday 20 October 2013

Second-guessing the Guesstimate: Getting the Unit-price Wrong at Tesco?

Following years persuading shoppers to attempt to compare like-with-like via the price-per-kilo addition to the shelf price, it would appear that a savvy shopper may also need to check the basic arithmetic of the multiplier...

According to an article in the Guardian, following the summer's 'strawberry court case', Tesco is once again allegedly getting its price-per-kilo labels on soft fruit wrong. Tesco's website apparently says its "Everyday Value" strawberries are £5.40 per kilo, but they are not. In reality they are a third more expensive at £7.14 per kilo.

The punnets are priced at £1.62 for 227g, with the label helpfully adding that the quantity of strawberries is equal to £5.40 per kilo. Now even those whose maths is pretty rusty can do a rough calculation – you get just over four 227g punnets in a kilo, so that is four times £1.62, which is rather more than £5.40
(i.e. £1.62/2.27 x 10 = £7.136).

The article lists several other instances, and quotes Tesco’s apparent replies to queries:
- “…as prices change all the time this figure is just meant to be a 'guide'."
- “…We'd like to reassure our online customers that no one has paid more for their berries than the listed price."

As often happens with corporate answers to consumer queries, answering the wrong question can be more damaging than correctly dealing with a genuine concern.

As most savvy customers increasingly familiar with price-comparison web-facilities will realise, a ‘per kilo’ conversion is a straight-forward arithmetical calculation that can presumably be locked to the SKU price in even the most basic computer systems i.e. there should be little scope for ‘human error’ once the new shelf-price is established…

Secondly, attempting to reassure the shopper that they have been charged the correct shelf-price is a reply more in keeping with the letter rather than the spirit of the law – a statement which is legally correct but misses the point that the shopper can be making a purchasing decision based upon the ‘per kilo’ comparison with other SKUs...

It might also be claimed that the ‘per kilo’ represents only pennies and should make little difference, except to a savvy consumer that has undergone years of persuasion that every little helps…

Friday 10 May 2013

The Savvy Consumer-group – how co-buying makes a difference…

With one of our highest page-view counts this year, each lasting an average of 2.54 minutes, yesterday’s NamNews announcement re Tesco’s new co-buying Wine initiative was by far our most popular NamNews item. It also indicated the high level of reader interest in what could be a new way of relating with a brand’s consumers.

Essentially, co-buying (cooperative buying power) provides a way of aggregating consumer demand and using the resulting power to influence all aspects of the offering (Product, Price, Presentation and Place), with cost-price reduction obviously making the news. (For other uses, see Pepsi, GSK, Pfizer, Sony, Warehouse, Achica and Mumsnet case-studies here)  

In practice, co-buying enables the savvy consumer to identify like-minded individuals, anywhere, all focused on your brand, and share views, experiences and especially perceptions of value. If that temporary grouping can then pool their demands, find a way of negotiating collectively with the supplier, and secure effective fulfillment of the order, then suppliers will have opened up a new two-way route to the consumer.

The new Tesco wine-buying initiative provides a way of removing some of these hurdles and road-testing the basic concept, with machinery that can scale and embrace additional categories in response to real demand, fast. 

It also gives Tesco extra buying muscle, but because of the two-way nature of the new channel, along with the 10:1 complain/praise ratio, the retailer will obviously be ultra-conscious of how they are seen to handle needs at each end of the supply chain…
…a potential win-win-win for consumer, retailer and supplier?

Wednesday 13 February 2013

Opportunities for all brands in a horse-meat crisis?

Anyone who believes that the current crisis is about meat-ingredients needs to re-examine the small print.... What we are witnessing is a fundamental challenge to the meaning of branding, that assumed guarantee that a branded product contains what it says on the tin, no less and occasionally a little more, in a world where every little helps...

One of the first past the post, the Savvy Consumer, lost faith in intermediaries a few years ago. She learned never to outsource her purchasing decision-making to marketers or shopkeepers, ever again.., instead demanding demonstrable value-for-money before handing over a penny... Her lack of trust and purchasing insight has now extended all the way back up the supply chain, and discovered horses in a field...

Can we blame her for never trusting any of us again...?

The meat crisis has converted us all into savvy consumers, and therein lies the opportunity...

Essentially, those brands that are prepared to deliver what it says on the tin, plus a little more, in quantities and of a quality that meets or even exceeds consumer expectations, now have a clear run...

That old-fashioned combination of Product, Price, Presentation and Place, packaged harmoniously to meet created expectation are all that is required to be better than many alternatives, in these unprecedented times..

When ingredient-cost increases can no longer be absorbed, and retailers refuse to budge, the answer is to eliminate attributes now superfluous to consumer need, rather than substituting inferior quality in attempts to short-change a savvy consumer by cheating on brand delivery.  In other words, if the product does not need a handle, its removal will not be missed, and the cost goes down...

Reverting to meeting a combination of the consumer's functional and emotional needs, better than the other guy, then becomes a basis for NAMs to build a similar 4P proposition for the retailer.

Rocket-science it ain't...

Friday 25 January 2013

Horses for courses - an exercise in brand devaluation?

The multiple horse-joke reaction to the burger-meat scandal has tended to obscure the real issues involved:
- patently, it is no laughing matter, especially for the most important stakeholders, the consumers...
- brand integrity, the fundamental reassurance that allows consumers to avoid the need to personally check the contents of the tin before purchase, has been seriously compromised...
- market segmentation, the process of tailoring a brand to consumer taste is about informed modification of ingredients, not the misleading of the consumer via artificially low price-points...

Anyone in any doubt as to the extent of the damage need only walk the aisles, and observe the focus on white meats, the subtle references to local sourcing of red meat ingredients, and the reduced uptake in the burger section.....

....and these are still early days, while retailers are exploring alternative arrangements.

Essentially, this all goes back to a fundamental misunderstanding of the role of branding, and an under-estimation of consumer sophistication in terms of their ability to evaluate what they are getting for the money. Given that much of the brand experience is 'enjoyed' in the home, a disappointed consumer may not choose to articulate their dissatisfaction at point of purchase, but simply switch brands, or even worse, shop elsewhere, pausing only to tell their friends on the way....

If we accept that these savvy consumers are very capable of picking up subtle content-downgrades, then it calls into question the ingredient-answer to a perpetual freeze on price increases, a 'secret' compromise of quality.  The use of horse meat or indeed any other 'filler' is but one example of how an obsession with cost control can compromise brand equity, be it supplier or retailer...

Moreover, as any experienced brand owner knows, consumer praise operates on 1:10 odds, while criticism is given 10:1 every time a brand disappoints...

Finally, should anyone be left with an impression that this is simply about might be borne in mind that any reduction in pack size or amount of ingredients is in danger of straying onto the same consumer-disillusionment territory...

The issue is hard-won, easily lost brand integrity, whatever the odds...

Tuesday 28 August 2012

The 'Per 100' comparison - upfront clarity & brand equity?

Now that we have all settled into an acceptance and appreciation of the advantages of decimal measurement (1971, 41 years ! ) and some are no longer stopping at traffic-lights, perhaps it is time for retailers and suppliers to aim for clarification rather than confusion in communicating price and value to shoppers?

Revealing pricing...
Expressing the shelf-price per 100g/100ml along with the SKU price would surely add clarity to the (deliberate?) confusion caused by random use of Kg/g in shelf-label unit pricing, BOGOFs, extra-value packs, and especially the use of shrinking-packs to disguise price-rises….

Converting the savvy consumer
Most of us have acknowledged the emergence of the savvy consumer, a person who is determined never to outsource their purchasing decision-making to marketers and retailers ever again, and yet we continue to serve up pricing indicators that at least cause confusion if not suspicion in shoppers who think for themselves, like never before…
Moreover, these same shoppers, with no credibility-baggage, are now equipped like never before with the means of ‘telling a 100 friends’, in complaining about a product.

Evaluating the real brand
Sure, the ‘per 100’ comparison forces the brand to rely upon Performance, Presentation and Place in a like-with-like Price evaluation with the available competition, causing the shopper-consumer to fall back on the brand equity we have taken so much trouble to build and sustain over the years.

If the brand is that good, it should be able to stand the heat…

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

Tuesday 3 July 2012

Bankers & Politicians, the remaining ‘trust’ evaporates?

Given the latest global LIBOR banking scandal, with politicians playing belated catch-up, the one certainty is that savvy consumers are becoming more entrenched in their determination never to outsource their product-buying decision-making to third parties like suppliers and retailers, ever again. Apart from the ‘obvious’ irreversible damage to the City and traditional banking brands (and unprecedented opportunities for the Co-op bank, Tesco-bank and other retailers that carry little banking baggage. They simply need the skill to count reliably and meet consumer needs) this new ‘unprecedented turmoil means that suppliers have to increasingly deal, and be seen to deal, in business reality.

A wake-up call to end all wake-up calls?
This current wake-up call from 30 years of credit-fuelled demand has already lasted four years (!) and as a result we are embarked upon 10-15 years of flat-line growth, to be overseen and driven by increasingly savvy consumers, who will be satisfied with nothing less than demonstrable value for money…a new culture that is spreading back up the supply-chain…with de-stocking simply one symptom.
With EU unemployment at 15%, rising to 25% in the age segments that matter, consumers, suppliers, retailers and whole countries deleveraging (i.e. using money to pay down debt rather than investing/spending), there will simply be little or no basis for real growth, anywhere, for a long, long time.
The new business reality
This is the new business reality…an opportunity for anyone prepared to face up to it…
In fact, in the current climate business success, and even survival, is about being able to optimise reality.  Indeed, if you do not face up to reality in business, others will do it for you…  Hence the reason why bankers and politicians gradually increase their influence on a faltering business until they eventually officiate in its liquidation. And the LIBOR crisis is currently demonstrating the reliability and trustworthiness of both…
Like never before, reality now counts, bigtime, and the responsibility for dealing in reality is now in your hands, where it belongs, and should be kept

Q: Is this really the responsibility of NAMs & KAMs?

Friday 8 June 2012

Morrisons feeds Big Brother, really!

In a UK supermarket first, the new deal allows budget-conscious housemates on the show to buy groceries from Morrisons in their weekly shop, delivered on screen in the supermarket’s trademarked bags…

This link with the UK’s most down-to-earth grocer should help keep some of the most extreme housemates grounded, thus minimising the possible emergence of the “Truman Show” Delusion now becoming more common in the US…

“Truman Show” delusion?
In fact, psychiatrists are seeing an increase in the number of patients who think they are the unwilling star of a secret reality show. This “Truman Show” delusion may be the first mental illness to come out of the 21st century's obsession with quick and easy fame.

The First Lawsuit
Nicholas Marzano believes he is the subject of a secret reality show, and everyone in his town of Hillside, Illinois is in on it. He's suing TV company HBO in federal court for, in his words, "filming and broadcasting a hidden camera reality show depicting the day-to-day activities of plaintiff" without his consent. His suit, filed in April, alleges that HBO has hidden cameras throughout his home, installed controlling devices in his car, enlisted the help of local police, and recruited actors to portray "attorneys, government and law enforcement officials, physicians, employers, prospective employers, family, friends, neighbours, and co-workers," all so that their show about his life can continue. Marzano also says HBO is keeping him from getting a job or paying his bills, so that he will be forced to remain on the show…..
(See a further 5 case studies here.)

For NAMs and KAMs with a compulsion to read all of the source material, the real article is available for sale by the journal Cognitive Neuropsychiatry

A reality wake-up call?

The real issue is the extent to which we are all in the process of emerging from a 30-year ‘unreality’ show, with growth built on credit, a world where forecasting meant adding 10% to last year’s figures, and a combination of inflation and devaluation, all ably managed by trusted politicians and bankers, helping to sustain unreal levels of ‘feel-good’ consumerism…

This unprecedented wake-up call means we are all now playing for real at having to think for ourselves, unwilling to outsource our decision-making to retailers and marketers, determined to settle for nothing less than demonstrable value-for-money, ever again….

Have a really nice weekend, from the NamNews Team!

Thursday 15 March 2012

Calculating Personal Inflation by ignoring the government basket-case…

Those of you munching pineapples while awaiting tomorrow’s delivery of your iPad3, and freeing up the necessary 50% of waking hours by sacrificing high-level DIY projects via the postponement of the purchase of a new ladder, may find that government measures of inflation will in future provide a more accurate reflection of your version of the rising cost of living.
However, if you are like the remaining 99% of the population, an alternative approach may be necessary…
The monthly inflation figure is essential in gauging how the nation is doing but it’s largely irrelevant and different to individuals.
That’s because the basket of goods the Office of National Statistics measures to monitor prices is a general one.
Simon Read in the Independent offers a simple way to calculate how inflation is hitting your finances:
-       Take a bank statement from a year ago and compare it to today.
-       Look at the things you have to spend on every month – travel costs, energy bills, phone, broadband, food, etc 
-       Add up how much you spent then and how much now
-       Work out the difference as a percentage of last year’s figure
This will give you a rough idea of how much inflation really is ravaging your finances.
Your bank manager will supply the decimal points…

Wednesday 29 February 2012

Money-saving tips from America … road-tested by penny-pinching UK consumers

Ranging from eating beans rather than meat to filling up the car early in the morning when the air is cool, and the gas is dense, the Guardian Team give twenty tips a reality-check by running the numbers and evaluating any real saving…
Impact on the consumer
Whilst not all money-saving tips will yield real savings, in practice the act of re-evaluating all expenditure coupled with comparison-shopping is bound to heighten consumer appreciation of value-for-money and cause them to reduce/postpone their ‘excessive’ purchases.
How the Buyer will react
In the same way, buyers being consumers are likely to apply the same disciplines in the day-job. Whilst it is tempting for suppliers to react via defensive mode, realistically pro-active NAMs can benefit by being able to calculate and demonstrate the financial impact of their support package on the retailer’s P&L.
Calculating the cost and value of their free trade credit can be a useful first step….  

Friday 27 January 2012

Crowdsourcing: tapping the collective want…

Following the impact of our NamNews item: Nestle checking views on Kit Kat flavours (1,265 hits in two days), we felt it might be useful to point you at some useful sources of potential applications
Definitions: Essentially, crowdsourcing is a technique whereby the long tail plays an important part i.e. each member of the crowd submits an insignificant contribution to the total outcome, but the total of these contributions amounts to a considerable difference. (More on definitions)
How it started: The Social Path tells the story of a 1906 country fair at which attendees were invited to guess the weight of a large ox. Hoping for a cash prize, about 800 people made guesses, though no one got it right.
Afterwards, a statistician analysed the written guesses and discovered something shocking: the average of all the guesses was a mere one pound away from the exact weight of the ox. The site also gives some great examples with spooky implications…
Examples: For a comprehensive coverage of examples see Anjali Ramachandran on the following
1. Individual businesses or sites that channel the power of online crowds
2. Brand-sponsored initiatives or forums that depend on crowdsourcing. I've included those that are no longer active as well, for reference.
3. Brand initiatives that allow users to customise their products
4. Brand-sponsored competitions/challenges focussed on crowdsourcing

Curiously, much of the good source material is two years old…an indicator that given its success, perhaps companies are paradoxically now keeping crowdsourcing to themselves?
Have a crowded weekend, from the NamNews Team!

Thursday 15 December 2011

Bullying suppliers: the noose tightens…

Australia’s Coles group has reportedly issued a document to its buyers, warning them to work within the rules and not to bully suppliers. The highly unusual move was reported by The Weekly Times, which said it had seen the document, titled ‘Compliance Factsheet - Unconscionable Conduct’ and said to include “threatening to delete or withdraw a product unless a supplier provides greater funding, rebates or discounts than otherwise previously agreed”.
Despite being simply a local level example of government eventually reacting to ‘excessive market concentration’ this initiative should be seen as a global reaction to potential abuse of power by people who find themselves with the freedom to sign cheques in dealing with people who need the money…
The legislation to deal with this situation is already in place, with GSCOP a prime example in the UK.
Couple with this the emergence of the savvy consumer determined to receive demonstrable value-for-money in dealing with retailers and brand owners, and it is possible to see this ‘common sense’ assessment being transferred up the supply-chain. The global financial wake-up call simply swept away the nonsense, enabling all parties to see business dealing more clearly, and gave them the courage to demand evidence of fair-share behaviour…
Also, given the government’s willingness not to punish corporate whistle-blowers when illegal anti-competitive practices are exposed by one of the parties, it can be seen that major retailers will be increasingly tempted to complain to the authorities when they feel, or can prove, that rivals are gaining unfair competitive advantage via illegal pressure on suppliers.
However, in the meantime, a real opportunity exists for those retailers that are prepared to play fair in negotiating with suppliers of all sizes. Despite the global financial pressures, suppliers still have some discretion in allocating trade funding, and are prepared to go that extra mile, or even kilometre, with retailers that are playing by fair-share rules, the ultimate source of real and sustainable competitive advantage….

Monday 5 December 2011

Today’s Special Offers: Suspicion & Brand Equity Dilution!

Britain's biggest supermarkets spend a lot of advertising money telling the consumer they offer great value. But an investigation by Panorama (tonight BBC1, 2030) will reveal that not all "bargains" are quite what they seem. (detailed examples)
The deals at Asda, Tesco, Morrisons and Sainsbury's might seem to be everywhere, but strip away the jargon and catchy promises of "huge savings" and "special offers" and you are just as likely to find tactics that experts say range from a bit cheeky to others that could lead to prosecutions for breach of consumer protection regulations.
However, the law is a way of dividing up what remains of an asset, after the event, rather than a means of preserving its value. Legislation is not intended as a means of preserving brand equity. In fact, by the time the authorities resort to legislation, the ‘crime’ will have already have caused irreparable damage to a consumer’s perception of a brand, be it product or store….making the savvy consumer more cynical as they attempt to second-guess the brand-owner, and possibly causing the cautious shopper to suspend the purchase.
It could be said that everyone should make their own minds up on value, but surely the whole idea of branding was originally about giving value-assurance ‘every time you open the box’ i.e a tube rattling around in carton is already speaking for itself and eroding brand equity…
In other words, by the time the authorities act the damage to brand equity has already been done…
Leaving the legalities to the lawyers, it is perhaps more productive to explore impact on brand equity
Impact on brand equity
Savvy consumers enjoy unprecedented access to price comparison facilities and are buying a combination of Product, Price, Presentation and Place when they purchase a brand. This gives the consumer a basis for comparing brands in a category, and diluting price credibility thereby undermines the shoppers perception of value of this ‘package’ possibly making the competitor’s package more appealing in terms of value, resulting in a compromise on fit with consumer need. In other words, another opportunity handed over to the opposition...
Impact on retailer equity
Whilst retailers have already absorbed insights from ‘brand experts’ and run the store like a supplier’s brand, with some success, it might be to their benefit to reflect on the fact that a shop is more like a house-brand than a single product brand. In other words, shoppers are buying the ‘House of Tesco/Asda/JS/Morrisons’ in terms of store brand equity and not individual brands.
Suppliers of house brands are doubly careful in the marketing of their products when offered under the Company name i.e. a bad product failure can negatively impact the entire product portfolio. So too retailers should not underestimate the difficulty in restoring shopper-trust following ‘misleading’ promotions associated with the entire store...
Whilst retailers may feel that individual brands will absorb the negative impact of ‘misleading’ offers that are technically within the spirit of the law, it may be worth bearing in mind that shopper-perception may be more important than reality, especially when shoppers are unwilling or unable to analyse the offer and make a like-with-like comparison of value. It can be easier for the shopper to simply allow one extreme example, or TV programme (!), to represent the entire shop, and switch allegiance to an alternative, more trustworthy retailer…

Either way a loss to brand and shop, and ultimately a waste of brand investment.
Both brand team and NAMs need to monitor execution of pricing and promotional mechanics instore. Whilst the short-term sales uplift may boost short term performance in these unprecedented times, brands owe it to the consumer and trade partner to think like a shopper and help them make like-with-like comparisons that benefit brand equity, long term…

Friday 25 November 2011

Supermarket thieves caught when getaway car runs out of fuel

A couple of ‘unsavvy’  shoppers stole £400 of alcohol from an Asda in Manchester, but then had to push their empty Citroen to the supermarket's petrol station, in full view of the CCTV.
Ignoring the logistics difficulties, this appears to be evidence of a significant raising of the shrinkage game, a reflection of the growing financial pressures on consumers..?
As always, Aldi have anticipated this market trend by their introduction of a £300 bottle of whisky, planned for early December, thereby helping thieves to meet their shrinkage targets, without a need to rely upon personal getaway facilities.
However, pricing the bottle at £49 may cause otherwise honest shoppers to regard it as a ‘steal’ anyway….
In which case, have a successful getaway weekend, from the Namnews Team!

Wednesday 1 April 2009

A move from price-based value?

According to the FT, shoppers are changing their opinion of what constitutes value in purchasing brands, services or experience.
P&G calls this “performance-based value messaging”, allowing them to emphasise what consumers get for the money, thus moving the shopper away from price-based value. In other words, shoppers pay more for Bounty, but as the paper towels are “twice as absorbent as bargain brands”, so the extra money will be well spent.
Perhaps it is worthwhile for NAMs and KAMs going back to fundamentals {why not loop Marketing into this kamblog to enrich the exercise?} and conducting a performance-based value analysis?
You may even find our Buying Mix Analysis tool of value in doing more for less….!

Wednesday 25 March 2009

Thrifty US shoppers trade grocery aisles for grocery auctions

The growing popularity of grocery auctions — which sell leftover or damaged goods from supermarkets, distribution centers and food service suppliers — comes at a time when people are stretching their grocery budgets by using more coupons, buying inferior cuts of meat, and choosing store brands over national brands.
The increased interest has fueled growth in the auctions, which can be found in at least nine states from Oklahoma to New York.
Apart from the moral issues re making food more available to those in need, 'past-sellby date' grocery auctions indicate a need for branded suppliers to somehow 're-enter' the distribution process, possibly via a shortening brand code-life.
If not, suppliers run the risk of damage to brand equity caused by the growing disparities between advertising-induced expectation of the brand and the consumer's experience upon opening the box…