Shopper marketing is the fastest growing advertising category globally and is set to become one of the biggest growth areas in South Africa too, according to recent research put out by Yellowwood strategic marketing consultancy. In the past year, shopper marketing has taken an ever greater share of marketing budget, showing 21% year-on-year growth in budget allocation in 2012 globally.
“iNSIGHT and measurement are the bookends for sound shopper marketing strategies. While shopper marketing is not in itself a new concept, technology has enabled marketers to study shopper behaviour more closely than ever before, allowing fresh and effective applications of shopper marketing concepts,” explains David Blyth, group MD of Yellowwood.
Yellowwood also assessed the relationship between brand-engagement and shopper marketing across a variety of categories. A key finding was that retail dominated the top 20 brands.
“We explored the role of brand engagement in shopper behaviour due to the focus that organisations are placing on shopper marketing today. Globally, shopper marketing is the fastest growing advertising category and in South Africa, although still in its infancy, it is likely to be one of the biggest growth areas over the next few years,” adds Jenny Moore, Yellowwood group research director.
Brad Jansen, the managing director of Havas Sports and Entertainment South Africa, says the landscape of retail and shopping in South Africa has changed drastically over the past decade.
“The mall has become more than a retail commodity, it’s a destination, a place to stroll, window shop, eat, play and meet up with friends. Malls that carry every aspect of beautiful design have cropped up in all major cities, not just in South Africa, and landlords need to be increasingly on their toes to ensure that both tenants and consumers are kept happy and that business is alive, well and thriving.”
According to a report by Ashley Friedlein, CEO of E-Consultancy.com, a large supermarket, globally, has about 20 000 different items for sale (SKU’s – Stock Keeping Units), however, a customer will on average, buy only 200 SKU’s per year (1%).
“The average time spent in store is 23 minutes, longer online (in Europe), so the longer someone spends in store, the more they spend,” Friedlein is quoted as saying.
“Shopper marketing has become a precise science – it is imperative that activations are relevant to the consumer and add something to their shopping experience, otherwise they are simply an intrusion and the objectives fall flat, Jansen says.
Retail trading densities for South Africa’s largest shopping centres increased by 10.2% in the last quarter of 2011, despite people making fewer visits to the malls, according to the Investment Property Databank (IDP) as quoted by IOL.
TREND. forecaster, Dion Chang, founder of Flux TREND.s, found that shoppers organise their shopping in terms of the experiences they wanted to have, and not just for the merchandise that they want to buy.
Chang conducted research into shopper “Tribes” on behalf of Primedia which is a leading player in the in store and mall shopper marketing space in South Africa, with a network of specialised media offerings. Chang identified four distinct shopper “missions”:
- Price Led: Shoppers on a self-directed buying mission to shop for only the basics. They are price conscious and low prices are of the utmost importance. They prefer stores that offer self-service and convenience and buy staples such as bread, milk or light bulbs from stores such as Shoprite Checkers.
- Atmosphere Led: Shoppers who are self-directed browsing shoppers, preferring interactive stores that offer an extraordinary in store experience. They want ambience and fun regardless of whether they buy anything and want to sit on bean bags while they browse books at Exclusive Books.
- Efficiency Led: These shoppers are retailer-led and on a buying mission, who want stores that are in convenient locations that offer decent service. They want knowledgeable sales people who can assist. They are the shoppers who will get the staff at Builders Warehouse to cut wood to their exact specifications.
- Ideas Led: Retailer-led browsers who are more experimental than other shoppers. They are after a wide range of products that offer them something different. They are led to appealing displays and products that offer fresh ideas. These shoppers are persuaded to buy over-priced, cool and interesting merchandise by staff at the i-Store.
Chang has also identified a new breed of shoppers that are prowling the aisles.
- The Stealth Shopper in ‘Operation Locate-and-Vacate’: They hate shopping or do not have the time. They shop quickly and efficiently for necessities at carefully selected malls that are convenient. They don’t shop on Saturdays or month-end. They have a list. Most importantly, they are not distracted by sales or marketing strategies. Eventually they will do all their shopping online.
- The Stepford Housewife as ‘the Rich and Bored Shopper’: Rich, bored housewives or trophy wives which have time, as they have staff, well-groomed and networked. They shop only at designer boutiques and malls with great lunch venues. They shop slowly and thoroughly, with friends, are emotional shoppers who are swayed by a sales pitch and drawn to tactility. Word-of-mouth recommendations count. They want exclusivity and comfort and personalised service.
- The Label Reader in ‘the Neurotic Eco-Warrior’: They read labels obsessively, count their calories and their carbon footprint. They haunt organic markets and shop at independent retailers, health and specialty stores and online. A cautious consumer which reads the fine print of every label, interrogates store owners about their products and respond to product information with depth. They are open to learning more about the product and will associate themselves with brands that support good causes. They do their research online before they make significant purchases and are interested in websites that offer them price comparisons.
- Supermom starring as ‘Millennial Mom’: Supermom, superwife, supercareer… their lives are a constant juggling act and they are impatient, stressed, harassed and distracted. They prefer convenience stores and malls that are child-friendly in terms of trolleys, facilities and play areas. They would prefer to shop online to save time. They rush about the shops, are easily distracted by sales and value deals, but not necessarily promotions as they have their children with them and their eye on the clock. They shop for groceries mainly and household needs. They are after a retail service that will support their busy lives and are interested in loyalty programmes. She doesn’t “want it all”, but wants to “experience it all”.
- The Bored Husband as the stereotypical ‘Long-suffering Husband/Boyfriend’: The men who hate shopping and begrudgingly accompany their significant others on these trips. They are usually found on the couches near fitting rooms and spend their shopping hours playing on their smartphones. When they do shop, they shop for appliances, gadgets, electronics and sports equipment. To their chagrin if they knew, Chang reports, they have become a sought-after demographic with retailers like Ikea creating a ‘Man Land’ reserved for them with games, TV sport, hotdogs and comfortable couches. US grocer, H-E-B’s health and beauty sales rose 11% after a male zone was created in 2010.
- The Scrooge – ‘Penny-Pincher and Coupon-Clipper Shopper’: They read labels and want the cheapest deal. They frequent bargain shops, bulk supermarkets and buy no-name brands. They are interested in discounts and shop mostly for necessities, buying luxuries only on a special or sale. South Africa’s dual economy has led to a breed of discount shopper that has no choice, hence no-frills stores that cater to them, focusing only on price.
- The Diamond Chips – the children of the original ‘Black Diamonds’: Their tastes and expectations have been shaped by the conspicuous consumption witnessed by their parents. They are spoilt, indulged, manipulative, tech-savvy brandsluts. They want to be the first to have a new product and shop at high-end malls, designer stores, online and abroad. Shopping is a hobby to them, as well as entertainment.
- Pink is the New Black: The powerful, trendy, emerging black pink Rand who are part of the creative industry cluster, brand and image obsessed with hefty disposable incomes. They are socialites, flamboyant and theatrical fashionistas with high media profiles. They are designer shoppers for whom impulse buying is a default activity. They want stores that pander to their ego. They are connected to a sophisticated, curated VIP network of influence.
- Millennial Mall Rats – the ‘Twilight Tween Shopper’: They trawl the malls, dress emo, they are digital natives and social media obsessed – the new MTV generation. They are easily distracted and follow anything that their peers think is cool. They are word of mouth and referral shoppers. They shop for cellphone accessories, tween clothing, celebrity-branded stuff, cosmetics and mainstream fashion brands.
- The Independent ‘Anti-Mall Shopper’: TREND.y, visit indi boutiques and vintage stores, preferring high street to malls. They are eco-aware, anti-brand and anti-commercial. You will find them at thrift stores, organic food markets, online, the High Street. They are willing to try new things. They are more adventurous, quirky, will visit pop-up stores and look for a unique shopping experience.
- The Chameleon ‘Indefinable Shopper’: They shop based on their individual, specific moods and missions – mostly the millennials. They are difficult to market to as they do not adhere to any one behavioural pattern. Because this shopper is so hard to pin down, retailers now need to focus on having multiple conversationswith one shopper.
And those shoppers to watch, include the new online shopper with spending power who prefers to buy big ticket and luxury items online in a recession.
Another interesting stat highlighted by Chang, is that single women are becoming a more influential category: 61% of women influence household consumer electronic buying decisions and women make more than 80% of all consumer purchasing decisions, Chang found. In 1998, only 69% of women between 18 and 24 were involved in home electronics purchases.By 2008, that number is 91%, in part driven by the prevalence of personal electronics such as cellphones and computers, the Flux TREND.s report states.
However, there is a new “shopper context” – shoppers who have adapted to recessionary behavior and have not reverted to more lavish shopping habits. Yellowwood pinpoints thatthis means that consumers are doing more pre-purchase preparation than ever before, often online, making lists of products to purchase and therefore, fewer impulse buys
Chang terms this new recession shopper, the ‘Forever-Frugal Shopper’.
“As a result of economic difficulties, many shoppers have had to readjust their spending habits and adopt a more frugal approach. Even though these shoppers’ disposable incomes have recovered, their spending habits have not. The Forever-Frugal Shopper is not just simply a coupon-clipper.They are techno-savvy and utilise apps and retailers that offer comparative shopping services.”
An example is the “Price Check App” from Amazon, which, via a smartphone, users can compare prices in store by scanning a product barcode.
This makes it harder for retailers and brands. Yellowwood identified several macro trends in shopper behaviour that influences shopper marketing strategy:
- A focus on the in-store experience: This trend sees greater collaboration between retailer and manufacturer to create a memorable and appealing shopper experience – driving footfall and brand preference.
- The ‘solution’ shop: In a bid to disrupt habitual shopping, more retailers are offering shoppers ‘solution’ ideas. Be that in the form of ‘dinner tonight’ solutions such as those offered by the Knorr brand; or home improvement solutions such as the bathroom in a box concept from Cashbuild. Not only does this concept ensure that the shopper buys all the products from the same range, but it is also a great way to introduce shoppers to new brands and products within the same environment.
- The rise of the private label: The private label has become more powerful – especially during the recession, where more shoppers explored private labels and enjoyed their efficacy and price. To counter this, brands need to focus on innovations that add real consumer value (quality, convenience, health and wellness are some of the current values appealing to shoppers) and sound strategies to avoid the discounting trap.
- Smartphones make a strong online presence critical:The massive increase in access to smartphones has changed the way that South Africans shop. Online shopping was valued at
R2 billion in 2010, with 30% growth projections. This is compared to 7% for traditional retail growth. Leading online shopper activities feature price comparisons and product information sourcing – whilst content, payment and auto-replenishment apps will be future winners.
- Shop for convenience: There has been a rapid increase in quick trip shopping patterns, facilitated by increased access to convenience stores in South Africa. Stores such as Woolworths Food Stores and convenience stores account for US$1.4 billion revenue in South Africa in 2009 exemplify this.
- Brand engagement:there was also a clear indication that brand building is hugely beneficial, even in low engagement categories such as tinned food. And the way in which shopper marketing is used to complement brand engagement can drive purchase intent, if used appropriately for high or low engagement categories.In high engagement categories such as personal hygiene, its role is most effective to reinforce and reassure shoppers. Furthermore, in high engagement categories, shoppers are more likely to engage with the brand on a variety of platforms. Whereas in low engagement categories, shopper marketing is effective at creating ambivalence and therefore swaying behaviour change in the aisle.
The Yellowwood research indicates that it is critical for marketers to understand the “interplay” between in store marketing, traditional media and online media in building relationships to drive shopper behaviour in their category.
“It’s not only about what happens in the store, at point of purchase, but about how shoppers engage with brands along the whole purchase journey,” the report summary concluded.
Primall Media, part of Primedia, have put a persuasive fact list together of why the mall media channel of shopper marketing works, citing the fact that 70% of final purchase decisions are made in a mall (according to a Synovate survey in 2008).
- SA shopping centre sales make up between 62%-76% of total retail sales.
- R400 billion in total mall retail sales were estimated for 2011.
- An FGI study found that mall advertising campaigns scored an average, verified ad recall of 45% for total market and 48% for LSM 9-10.
- SA’s formal retail stock is estimated at approximately 37 million m2, and is worth approximately R524 billion.
- The SA Trade Sector (Wholesale, Retail, Motor Trade and Accommodation), contributed 13.9% to SA’s 10 GDP (production method).
- SA retail sales contributed approximately R64.4 billion to total South African VAT revenues in 2009.
- The retail sector is within the top three biggest contributors to the South African economy after manufacturing and mining, according to Stats SA.
- Consumption Expenditure by Households (FCEH) made up 61% of 2009 GDP (expenditure method), and shopping centre sales accounted for 27% – 31% of FCEH contributions.
- Luxury stores have seen business increase up to 30% over the last five years.
- Black Diamonds can drop a R100 000 on a single purchase in luxury stores.
- According to Old Mutual Property Group the average time their malls are visited by a consumer is 3.3 times per month.
- The average dwell time for consumers across all malls is two hours- the larger the mall the longer the time spent in the centre.
- The primary catchment area for super-regional malls is 10km and 5-8 km for regional malls.
- Results from a TNS study showed that spontaneous awareness of Primall mall media grew by 12% in just 16 days – this compared with an average TV rating of +/- 2.6% according to Adtrack averages.
Primedia Lifestyle Group, part of Primedia Unlimited, provides marketing solutions to shopping centres, operating a marketing services business which sits within the management teams of the various shopping centres that Primedia have contracts with.
“We are similar to an ad agency, but we aren’t account managers, we are the marketing managers and very much part of the team, often regarded as centre management,” says Doug Mayne, Primedia Lifestyle managing director.
It is a unique business model.
The Lifestyle division manages 45 shopping centres countrywide, including some of the “super-regionals”, like Gateway, Menlyn, Cavendish in Cape Town, Cresta, Southgate, Westgate, TygerValley and have done some work for Sandton City and Eastgate.
When Mayne worked at an ad agency, it struck him that shopping centres weren’t being treated like brands.
“That was lacking in this environment. My mission has been to convince property owners that these wonderful assets they manage are brands, like any others, and need to be treated as such.”
He and his team are now driving those brand conversations and assisting the centres in differentiating themselves, in what is admittedly, Mayne says, a tough trading environment.
South Africa has a “mall culture” and has more malls per square metre than many other countries.
“We have this term for our malls called ‘The Third Place’, which is the place one spends the most amount of time in, after home and work. Malls are a key meeting place and an entertainment destination. The numbers will tell you that. Gateway in Durban was the busiest mall in the country over the December holidays, with 3.3 million people in one month, annually 25 million visit the centre,” Mayne explains.
“People don’t realise the pull these malls have. Malls as a medium outperform many other media types. It is a powerful environment.”
Mayne says brands are looking for a return on investment (ROI) and exposure at point-of-sale, is very important for ROI. “The days of the big TVC without ROI is over, we have to back it up with more measurable deliverables, it has become more accountable, less fuzzy.”
Mayne explains that mall media has flowed from the in store environment and the challenge in a mall is interior space and attracting visitors to all the tenants as opposed to favouring a few.
Digital will make an impact on shopper marketing in store and in the mall in time as technology becomes more accessible and social media and mobile integration and apps grow in popularity.
Most of the malls have mobile apps, Mayne says, and they are becoming obsessive about driving Facebook fans.
Gateway became the first mall to launch a VIP loyalty card, where consumers can earn points by interacting with the Facebook page, visiting events and experiences they can redeem points for, shopping, etc., – 80 000 people had signed up in seven weeks.
Travis Brown, general manager of Mall Active, a division of Primall Media, specialises in centre court and mall activation.
He says the most interesting aspect of malls is that the space is unique. “Consumers are there with a need and you need to approach them in a specific way. You only have five seconds to interrupt the consumer’s day.”
Brown emphasises that the mall environment is not an easy one to work in as there are restrictions involving height, sound and product.
But what they do well, Brown says, is bring brands to life.
“Any product that is not a spontaneous purchase, works well in the mall environment. People want to open and shut things in a relaxed atmosphere, without the pressure of a dealer on their backs.”
He reckons mall media is growing in South Africa because malls are a social phenomenon.
“In Joburg people don’t go to a park, they go to the mall. Even in Durban and Cape Town, many people do meet up at a mall. Malls are our gathering places, a safe environment, a place to be entertained. That is the reason they are working and brands understand that.”
Brown says he has seen a growth in mall activations.
Mall space is valued at R900 million per annum, before there is even a stand and a promoter in place, emphasised Brown. There are about 550 malls in South Africa.
“Many brands are now including mall media as part of an integrated strategy.”
TREND.s in mall activations put digital applications at the top, Brown says:
- Digital elements, whether it is iPads, apps, QR codes, all needs to be linked to social media – with a Twitter feed or Facebook page linked to the activation. Consumers need to be able to download apps to see full brochures of product.
- Projections inside malls are becoming more popular, but height restrictions have to be borne in mind.
- Flashmobs are done and dusted – centre management don’t like them. Activations have to be digital.
- Anything interactive that people can play with or engage with or design, for example, their own smart house in an activation for Samsung, is a win.
- Competitions are still popular, depending on the giveaways and ease of entry. Consumers don’t want to fill out forms. This is where digital will play a strong role.
- Creative: the look and feel of a stand, lighting, how the brand is integrated with the rest of brand CI and a campaign, is critical.
The mall environment is actually an out of home environment for the consumer, says Fashion Media general manager, Sean Reid.
Even shop windows are fair game and Fashion Media sees the shop window as “industrial theatre”.
“When you build your shopper display – we try create stuff that is 3D. You have your windows as first access to make use of: middle window and backdrop, the wall for vinyl or a laminated frame to put in place… you are dealing with a 3D space.”
Reid says their offering is sold out back to back – window displays are directly correlated to sales and since retailers get sales reports on a daily basis, it is an ultimately measureable medium.”
More than ever, buyers and shoppers are relying on close-to-home convenience for shopping and appreciating the true value of the communities in which they live.
The National Advertising Bureau (NAB) Roots research has shown that there’s so much choice for shoppers today that most consumers won’t travel further than they need to. Even the supermalls, like Century City only expect and rely on about a 10km catchment area.
South Africa is currently home to more than 37 million m2 of retail space, with 1600 formal shopping centres representing half of this space, and with 115 centres occupying over 30 000m².
“Times ahead are tough for retailers as buyers change the way they shop and spend their own time. In a market where GDP growth is predicted to only be between 3% – 5% until 2015 and private consumption expenditure is averaging only 4% for the next four years, manufacturers and retailers are going to have to revisit their strategies if they plan to be a leader in this new world,” says John Bowles, NAB joint-managing director.
Bowles explained that shoppers today prefer to shop local and also have no reason to travel too far for their needs.
“It’s those retailers that are within the immediate catchment area that are the real beneficiaries and where the shoppers are most likely to visit. Obviously the larger the store presence for retail and physical availability of brands the better, but this still won’t guarantee success.
“We all know that small business is struggling in this global age. The mom and pop stores in particular have been worst hit as big malls have opened (with high rentals) and national retail have opened up new stores aggressively. Growth has been so intense that national retail is prepared to cannibalise on its own catchment areas to compete in this new environment. Small businesses are often spectators as large business have economies of scale, better pricing and range for the shopper.
Large retailers also have their challenges of course,” Bowles says.
Hypermarkets and superstores are still the biggest category in terms of revenue but are seeing their growth expectations limited as shoppers search for convenience and shorter trips, the Roots research conveys.
“Convenience and forecourt stores are growing quickly in South Africa because buyers want convenience. Pick ‘n Pay is rolling out Express stores whilst Woolies are well established, and Fruit and Veg City continues to roll out its Fresh Stop brand at Caltex.
“Globally, a strong trend developing is that retail brands are moving to smaller formats like Walmart which has introduced an Express store and Target with its Target City format. To take advantage of time strapped shoppers, most are gearing up for an ‘open 24 hours’ service. Time and convenience continue to be an important consideration for retailers who are desperate to be the destination of choice.
“Ocado in the UK is an example of an online retailer having adapted to these new shoppers looking for convenience and value. It offers consumers (with free delivery) a choice of 21 000 different products mostly sourced from the Waitrose supermarket chain and also provides the service of picking groceries and delivering them to customer’s doors. Tesco has introduced a ‘Click and Collect’ drive through facility for the shopper that doesn’t want to set foot inside the old brick and mortar facility – a time saver for the commuter on their way home,” Bowles added.
He said that while it was clear that time and convenience played a major role in the future of retail, so had understanding of the modern shopper increased.
Post-recession buyers lacked loyalty to brands and stores and were “very savvy” in identifying true value.
Bowles said this was very evident in South Africa, but globally the same trends existed.
“So as these shoppers live in a world where there is major choice, great value and convenience, they’re also more mobile than ever – choosing to be close to home and the family. They’re being encouraged to work from home where their productivity is more efficient and quality of time is improved. The question today’s household is asking is, ‘How can I make the most out of my 24 hours?’ This trend will have an impact on the way buyers shop.”
Bowles says consumers also don’t want a relationship with their grocery retailer. “How many times have you laid in bed thinking how much you love your retailer?”
Retailers need to be relevant to the lifestyle of the shoppers in their catchment area, each community is different, behaves differently, shops differently and this is something Roots 2013 will highlight.
“Ultimately if you want to be best in retail, you have to be best at a local level. Marketing focuses on ridiculous target market segments and they generalise the markets. LSM has nothing to do with income, it is about assets. Much of brand business strategy is around these segments.
“But brands have to look more in-depth if they want to win. Brands can plod along with their segments, but market share changes on the ground and brands are sold on the ground.”
Bowles disputes that most decisions are made only in store.
“Consumers have a repertoire of what they like and use in specific categories. Store activations can try remind people of the brand, but people have to rely on a whole set of memories refreshed by advertising. The game has been won long before the consumer enters the store. You need the whole mix of marketing to refresh and constantly nudge and remind the consumer.”
And if there is a poor experience at the end of the brand lifecycle, the consumer won’t buy it again, regardless of the amount of advertising thrown at it.
In excess of 90% of the fashion/cosmetic brands that Fashion Media’s Reid promotes in store, will have above the line TV campaigns and strong print campaigns in glamour mags, he says.
“Brands need to stand out in store and using in store media is one way to get prominence at the point of purchase,” Reid says. “We are there to create sales, not just drive awareness.”
Bowles advises manufacturers to get down on the ground and do activations.
“Even brands number three and four in a category can win if they do brand activations in those segments and communities, visibility exercises, sampling, trials, etc., anything that gets them into the communities,” he says.
Despite trying economic times, centre managers and their clients can still get excellent returns from campaign investments irrespective of the size of their promotional budgets. The key to achieving this is a watertight understanding of the community the shopping centre serves, according to Primedia Lifestyle.
Primedia Lifestyle indicates it has proven that by aligning campaigns with the respective communities each shopping centre serves, it can generate a favourable response from both customers and tenants alike.
Campaigns to draw traffic to malls and market the mall to the broader shopper catchment area take many forms. Primedia Lifestyle provides three examples:
One example of assessing the broader community’s needs and generating a campaign that pushed feet through the door, was a campaign Primedia Lifestyle ran at Southgate Mall in Johannesburg.
Over five weeks, consumers who spent R200 or more at Southgate were eligible to enter the Power Up competition. Prizes included a gas cylinder, petrol and grocery vouchers, airtime and a gas heater.To attract shoppers back to the centre, entrants received an SMS with a reminder that to be eligible to win pre-paid electricity vouchers, they had to be present when the draw took place.
Marketing manager at Southgate, Nozipho Mashele reported that the response from customers was extremely positive and gave them real iNSIGHTS that could be used again in future campaigns.
“Apart from generating feet through the centre and spend amongst tenants, the aim of this campaign was to offer customers a range of practical prizes that would ease their monthly expenditure burdens.”
The second example took place at Comaro Crossing Shopping Centre in Johannesburg, an open air strip mall, with a blood drive tied in with sponsored prizes from tenants and lucky draws to increase their shopper database.
“Our challenge is to create workable campaigns that fit the mould of the centre. Given that the consumers we serve have a strong sense of community involvement, we embarked on a CSI initiative by implementing a blood drive in conjunction with the SANBS,” said Primedia Lifestyle marketing manager, Wesley Scott.
“We also encouraged our tenants to donate blood which went down really well with the community. For an event with minimal cost, maximum impact was created along with good CSI exposure for the centre.”
For the East Rand Galleria Centre, Primedia Lifestyle combined the launch and promotion of the centre’s Facebook page with a promotion for the tenants within the beauty industry. The aim was to draw attention to the tenants involved in the beauty sector, increase feet through the centre and to drive the growth of the mall’s Facebook page.
“We created a special makeover day and via entries on our Facebook page, we gave away makeover prizes sponsored by our fashion and beauty tenants. On the day of the ‘live’ makeovers, brand activators using iPads encouraged shoppers to like the Facebook page and during the morning, 400 spot prize goodie bags were given away with R800 worth of tenant discount vouchers,” said Scott.
Reid says shopper marketing is undoubtedly a growth medium. The trend globally is to spend more on in store and window displays to entice consumers to buy. “More spend will move into this environment in the future because of the point of purchase (POP) environment… they attract feet through the door.”
The kind of innovation one can expect in the future, he says, are things like scent dispenses which dispense a fragrance to get smell of the fragrance in close proximity of the store to entice consumers in.
A cautionary tale
There is a new shopper in town and they are more cautious than the shoppers who drove the conspicuous consumption of the heydays before the global recession. That animal has left the building along with bad 90s fashion. They are more frugal and tend to compare prices more readily, as trend analyst Dion Chang has reported, but consumer attitudes towards grocery pricing have also changed, according to Nielsen.
In fact, the majority of South African grocery shoppers exhibit a high awareness of and sensitivity towards grocery prices, as reflected in Nielsen’s Shopper TREND.s report, released at the end of 2012.
The report reveals that two thirds of South African grocery shoppers are “extremely price conscious” when grocery shopping. More than one quarter of South African grocery shoppers claim to know all of the prices of grocery items they regularly purchase, while 41% know the price of most items they buy on a regular basis and say they always notice price fluctuations.
“In the face of continuing economic uncertainty, South African shoppers are adopting a cautious approach to grocery purchases. An overwhelming majority of shoppers are sensitive to the price of groceries, and these shoppers are becoming savvier when it comes to purchasing items they need at the lowest price,” observed Harsh Sarda, executive director: customised research at Nielsen.
“We are in the worst recessionary environment we’ve seen in a long time,” says Ruth Robertson, Vital Health Foods marketing director. “Money is tight, it is a low trading environment, everything has gone up… the retail environment is in a difficult space. Money isn’t flowing.
“We find consumers stretching things, making do, not buying as much as they used to,” she says.
As a result, Robertson says that in store, every touchpoint must entice and elicit some form of engagement.
“In store media has changed tremendously, it is very regulated these days. Our biggest thing is getting consumers in store – about 72% of purchasing decisions take place in store. Every retailer is different, but we do try in store promoters.”
It is also revealed by Nielsen that South African shoppers are very loyal to the stores they shop at and are unlikely to switch stores to chase promotional offers. The majority of grocery shoppers report a preference for actively seeking promotions within their usual grocery store, with price discounting identified as the most popular promotional activity, the Nielsen report reveals.
When deciding where to shop, shoppers rank value for money, practical shopping trips and low prices as the most important drivers of store choice.
This is borne out by research conducted by Caxton’s National Advertising Bureau (NAB) with its in depth Roots consumer survey, conducted every two years. Roots 2013 will be launched in February and the theme ‘Coming Home’ reflects current shopper trends, as NAB joint-managing director, John Bowles explains.
“The Roots 2010 survey clearly showed the importance of geography from a marketing point of view and emphasised that areas are different and constantly changing… people shop locally and we expect this trend to grow.
“Retailers around the world are experiencing the same trend as they move to smaller and more convenience format stores. Catchment areas for malls and stores are shrinking as the consumer looks closer to home for value and savings. Buyers have loads of options and they’re taking into account the cost of fuel when considering a destination.”
The ongoing cocooning trend identified by the NAB team has led to the company including a section in Roots 2013, which looks at the level of community involvement and participation experienced by participants.
“Once shoppers identify a selection of stores they are comfortable with, they tend to stick to this repertoire. For grocery retailers, this highlights a growing importance to differentiate and offer exceptional customer service alongside competitive pricing,” says Nielsen’s Sarda.
Nielsen found that grocery shoppers are unlikely to change their choice of branded products, sticking to their favourite brands – 57% occasionally trial new brands or products, while 17% prefer to stick with familiar products.
However, uncertainty over the economy and rising food prices is having an impact as consumers cut back on luxuries. A noted trend in South Africa is a move to house brands which are seen to be of equal quality and better value for money from a pricing perspective. As household budgets tighten, a third of South African shoppers feel that the quality of grocery store brands is equal to branded products and one quarter felt store brands offered good value for money.
And as shoppers feel the impact of rising food prices, more than half report having cut down on luxuries and only buy essential items.
Main grocery shopping is done monthly by 70% of shoppers polled, while 30% also shop at least two to three times a week to top-up groceries and 23% do so once a week. Spaza shops are the most frequented outlets, visited four to five times a week by shoppers, followed by supermarkets at one to two times a week.
Price and value is still more of a consideration to South African shoppers than sustainability and 53% indicate that they have not changed their purchasing habits of green products in the past year.
Primedia Lifestyle’s Doug Mayne admits consumers are under pressure with unemployment soaring, rising electricity costs, more pressure on disposable income, and so on. “Feet don’t drop in recessionary time… so foot count is up, but turnover is down.”
The malls that Primall services are destination malls with wide catchment areas. Primall Media’s Curtis confirms that despite the recession, traffic has not been down. “On average, it’s been pretty constant. As South Africans, we don’t have a culture of high street shopping, particularly in Gauteng. There is still stuff to do outside of the malls in other areas, but malls are also entertainment, and many malls are now building a residential component above retail.”
Despite trying economic times centre managers and their clients can still get excellent returns from campaign investments, irrespective of the size of their promotional budgets. The key to achieving this is a water tight understanding of the community the shopping centre serves, Mayne explains, his comments dovetailing with those of NAB’s research findings.
Each mall is fighting for their piece of the pie, Mayne says, and need to come up with ingenious campaigns to get people to spend money.
Receivership, bankruptcy and administration are terms bandied about all too regularly these days in the context of the traditional ‘bricks and mortar’ retail chain or High Street retailer. This century has already seen the spectacular disintegration of well-known chains across the globe, due in part to the ongoing global recession, but also because some stores are moving more merchandise online.
In the first nine months of 2012, store closures were up 25% in the US. Some retailers will disappear altogether it is predicted: women’s apparel chain Fashion Bug; Blockbuster video; and the biggest retail fail of all in the US: Sears, which originally merged with Kmart. Even retailers doing well, like Gap and Abercrombie & Fitch are closing stores in unprofitable domestic mall-centred locations. For some it’s just become a tough trading environment and others are slowly moving operations online.
Several well-known brands closed multiple stores in the US in 2012: Best Buy – 50 stores; 63 Betsy Johnson; 500 Blockbuster video stores; 123 Collective Brands (Payless, Stride rite); 100 Family Dollar; 600 Fashion Buy; 113 Food Lion; 100 The Gap; 120 Pacific Sunwear; 137 Ritz Camera & Image/Wolf Camera; 172 Sears and Kmart stores; 60 SuperValu stores (Albertson’s/ACME/Save-A-Lot); 50 T.J. Maxx (globally); 76 USA Drug; and 180 Abercrombie & Fitch stores are set to close over the next few years.
Three major retail chains have gone bust inthe United Kingdom in the first few weeks of 2013, costing 10 000 jobs and up to 1000 stores: Blockbuster video rental, music chain HMV and camera firm Jessops. One can safely speculate that all were due to outdated business models not having kept pace with the increasing online environment or digitisation of their products and services. But there is no doubt that the recession helped things along.
In 2012 UK retail chains Comet, Peacocks and JJB Sports all went into administration.
With 48 000 retail workers losing their jobs in 2012 in the UK alone and stores closing at the rate of 32 per day, some pundits are predicting that 2013 will be an even worse year for retail in the United Kingdom, with 12 679 retailers “at high risk of insolvency”. Retail is the largest private sector employer in the UK.
Bricks-and-mortar retailers are struggling and Harvard Business Review posed the question last year, as to whether ecommerce had killed the retail store?
The question was posed by HBR to J.C. Penny CEO Ron Johnson, formerly of Target and Apple. Alongside Steve Jobs, Johnson helped build the Apple Store from nothing to what it is today.
Johnson does not think the retail model is broken and he believes that physical stores are still the primary way people acquire merchandise and that this will be the case for the next 50 years or so.
He cites the example of Apple Stores, which have annual sales averaging out at $40 million per store in the technology category which, if predictions were right, should be exclusively online retailing by now, which it is not.
Johnson does admit to HBR though, that it does depend on the category when it comes to online retailing. About 9% of US retail sales are online today and growing by 10% a year. “In reality what is growing is physical retailers’extension into a multichannel world. They’re increasingly integrated. But physical stores will remain the main point of contact with customers, at least for the stores that take the lead in this integrated environment,” Johnson told HBR.
He advises retailers that they need to be more to customers, and help them enrich their lives: “If the store just fulfils a specific product need, it’s not creating new types of value for the consumer. It’s transacting. Any website can do that. But if a store can help shoppers find outfits that make them feel better about themselves, or introduce them to a new device that can change the way they communicate, the store is adding value beyond simply providing merchandise. The stores that can do that will take the lead.”
It is a mindset switch, says Johnson, to “value-creation”.Everything has to be reimagined, not just tweaked.
Retailers need to start thinking about the future instead of protecting the past, is a profound comment from Johnson in the HBR interview.
The retailer that does survive those 50 years into the future will be the one that integrates the mobile internet and the in store experience in ways that create value.
“In retailing you’ve got to trust your intuition much more than you trust the data… If you look at the history of retailing, there are two ways to win: be the low-cost player, like Walmart, or be the differentiator, like Target,” Johnson told HBR. “You can’t follow the customer. You’ve got to lead your customers—anticipate their needs and meet those needs, even before they know what they want…”
Retail is very simple, we’re just good at complicating it, remarks Kevin Lennett, the new managing director of The Crazy Store, who formerly headed up Sportsman’s Warehouse.
“It is one of the oldest professions in the world: it is about getting in product that people want and selling it at a price they are prepared to pay.”
But retail is also quite resilient in South Africa. “It’s not booming, but we have very good retailers in this country and we are well placed to do even better this year.From a shopper marketing perspective in store and with malls, we need to talk louder to customers in store.”
Lennett says the first thing to do is to engage with the current consumer base in store.
“Make sure shopper marketing is visible and make sure that it makes sense.”
A warning has been sounded by NAB’s John Bowles, however, about unsecured credit.
Bowles says the proverbial elephant in the room in the retail trading environment is unsecured credit extensions in loans, HP and personal loans. Much of that consumer debt has also been consolidated into bank loans. Some banks and retailers have extended loan repayment terms and this can lead to defaulting as cash-strapped consumers find themselves still unable to pay.
“What if the bubble burst?” asks Bowles.
The percentage of the market driven by HP loans, how consumers spend (not necessarily only on unsecured credit) and buying habits, will be revealed in March 2013 with the release of Roots 2013.
“This is a new global economy. Multinationals are expanding around the world, and yes, we have a national set up with our national retailers growing by opening new stores, but cannibalising other stores as they do. There is not too much of a price differential on FMCG/semi-durable goods, we have a parity-type environment.
“Consumers are not loyal to shops, they shop everywhere. And with petrol prices going through the roof and food costs rising, they tend to stay at home more often.”
This is not a trend unique to South Africa, and globally, there is a move by retailers into a smaller format store, like Tesco’s ‘click and collect’ self-service stores.
At the top end, consumers are cocooning at home more, they are more community aware too. At the bottom end, the mass market is taking retail offerings into account.
Food inflation in South Africa has been on the rise since January/February 2011, according Nielsen.
Consumer confidence has been shattered and the retail landscape is facing a number of challenges and opportunities.
The battle between independent and branded retail, discretionary spending by consumers, and online shopping habits, coupled with the entry of large foreign players such as Walmart, retail in South Africa is ripe for transformation.
The growth rate of FMCG retail sales in South Africa has been declining, year-on-year: retail sales grew 3.3% in 2010, compared to 14.6% in 2009. Price increases account for about 50% of the growth in 2010, compared to almost 82% in 2009.
Staples decreased in pricing in 2010 and lost share to Dry Groceries/Beverages/Toiletries. It is still significant that nearly 50% of the average basket is made up of Dry Groceries/Staples, Nielsen noted.
Deflation has been seen in a number of staple categories such as rice, maize meal, flour, margarine and tuna fish among other categories. The key gainers were fresh milk, ready to eat meals (RTE’s), instant coffee, carbonated soft drinks and sugar.
Nielsen actually found that consumers in South Africa are among the most pessimistic in the world, with the Europeans leading on that front, accordingly to the Nielsen Global Consumer Confidence Index, which tracks consumer confidence (online), major concerns and spending intentions among consumers.
South Africans are already highly price-driven, but Nielsen has seen consumers seeking more and more value when they choose to spend their money. This is a direct result of consumer confidence which has not recovered since it took a hit in 2008 when the recession his SA shores.
Nielsen’s 10 year comparisons reveal an interesting trend: communications, which include cellphones, the internet and MNet/DSTV have doubled in their share of Discretionary Disposable Income. Entertainment has also increased considerably mainly at cinemas/video, the lottery, betting on sport and horse racing and at casinos, with the South African gambling board reporting revenue, including reinvested winnings at R215 billion.
Consumers are shopping less frequently, but spending more per occasion.
Within Branded Retail, Nielsen reported that Shoprite was reaching most households in SA, and that globally, retailers are becoming better at driving margin and are doing so through key strategies: evolving infrastructure, effective consumer targeting and consumer loyalty.
Competition is most intense when it comes to food, with recent years seeing all-out food fights taking place as food grocers try to grab a share of sales adjacent to the traditional food basket. Ready to eat (RTE’s) meals and instore solutions in food are targeting out of home eating. Whilst Liquor/Pharmacy/Forecourts/Hardware all continue to grow faster than the core business units at each retailer.
Nielsen noted a positive trend for retailers online, with an explosion of online shopping as internet PC users hit the 6 million mark. Of those online, 71% were confirmed internet shoppers, with 50% having done so over the festive period.
Being driven by the ever savvier shopper, more and more retailers are offering loyalty engagements from points to benefit schools, to cash back on petrol purchases. There has never been a better time to be a consumer than now, Nielsen noted.
In considering the Walmart deal, Nielsen is cautiously optimistic, saying manufacturers will need to be aligned to global terms and best practices in pricing, and local suppliers may get the opportunity to leverage off a global network. Walmart is an industry leader at supply chain management and sourcing and local manufacturers can be expected to leverage this into efficiencies locally.
Nielsen says it will be interesting to see what Walmart can bring to the table that is clear to local consumers here in South Africa who are known to be highly price-driven. “Other retailers should expect higher visibility of Massmart/Walmart brands. Retailers can further expect competition in pricing and advertising, leveraging off supplier terms that do change and ensure alignment and finally adopt practices that make good business sense,” the Nielsen report stated.
If marketers want to make their budgets work as efficiently as possible, then their advertising should appear on Tuesday at the earliest and Friday at the latest.
Why? Because most shopping takes place on the weekend.
Buyers plan their shop and mostly do this two or three days before. So the most efficient timing for advertising is Wednesday or Thursday – that’s when the majority of a consumer’s shopping radar is on and really strong, reflects NAB’s Bowles, quoting Roots research.
According to the survey, which focuses on purchasing decision makers (PDM’s) only, these are the habits of the urban shopper:
- Urban South African shoppers do most of their grocery shopping on the weekends (65%). A further 18% mull between the weekends and the week itself.
- Just 17% of SA’s urban shoppers choose to shop during the week.
- Over 60% of shoppers always plan before a big shop and a further 26% sometimes plan the shop.
- Only 14% of SA’s urban purchasing decision makers don’t plan their shopping.
- For advertisers, the good news is because over 85% of buyers are thinking about buying before they shop, they’re mentally in a buying situation and if you can reach them in this zone (and follow through in store or in a mall), your chances of being considered and thought of are far greater.
- Most shoppers (64%) are planning their shopping trip two to three days before they shop.
- A further 33% of consumers plan within the week and only 3% plan a week before or more.
Marketers and retailers need to ‘fan the furnace’ with advertising because shoppers buy all the time. Budgets are limited but marketers should be reaching the market weekly at best, monthly at worst, advises Bowles.
With consumer spending still under pressure, the retailers and marketers have had to re-evaluate marketing and sales strategies to drive feet into stores.
“Consumers continue to spend less on luxuries and on items perceived to be ‘non-essentials’, seeing both reduced purchasing and increased switching to generic equivalents,” reports Issy Zimmerman, director of Redgwoods which owns Reggie’s, Toys R Us and Babies R Us. “This has made it critical to actively communicate about deals and special offers through compelling advertising – driving traffic into stores whilst remaining top of mind.”
Redgwoods agency is Switch and creative director Malcolm King, talks about the fact that retail remains a highly competitive advertising space, with players across most sectors tapping into consumer tendencies to shop around for the best price.
“Special offers drive retail. These require rapid agency response times and a consistent ability to identify and recommend value-adds that will enhance the offer.”
He explains that tighter turnaround times also make having the right marketing strategy vital.
“By marrying concept, creative and placement correctly in order to leverage great brands and products, one can still drive sales despite challenges around consumers’ reduced disposable income,” King adds.
Of course, like most marketing disciplines, shopper marketing has yet to be fully integrated on the shop floor with the rest of brand strategy. Jason Stewart, managing partner of HaveYouHeard, says that despite word of mouth recommendations driving shoppers in store, word of mouth marketing (WoMM) as a channel, has yet to be integrated in the in store environment where brands have unparalleled access to their customers.
“With word of mouth recommendations becoming more and more important in the decision making process, companies can no longer afford to miss out on such prime opportunities to establish natural brand advocacy,” says Stewart.
“Rohit Bhargarva, the author of Likeonomics, believes that successful WoMM can only be achieved if companies are able to establish a meaningful and personal connection with their consumers in the in-store environment. In so doing, brands are better able to inspire loyalty and passion, and sustain positive sentiment across their customer base.”
With ever-changing shopper trends marketers have recognised the need to stay closer to consumers and connect better with their shoppers in order to keep abreast.
“A closer look at consumer decisions identified that 68% of shoppers make decisions at shelf. Shoppers are more easily influenced by emotional stimuli in comparison to rationally prescribed messaging,” says Shantel Bassanna, managing director of XP². Some pundits put that figure as high as 72%.
Bassanna says these iNSIGHTS have led marketers to adopt a more experiential approach to marketing, keeping brand activity proactive by tracking the behaviours and perceptions of consumers.
“Marketers are going beyond the fulfilment of basic needs – they recognise the requisite to excite and enthuse their audience, by creating an engaging experience at every touchpoint in order to develop a positive connection with the consumer.”
Experiential marketing invites the shopper to interact with the brand by way of trial, and communicate their thoughts and expectations, as opposed to simply having them exposed to a message, Bassanna explains.
“While traditional buying decisions are driven by predetermined thoughts based on previous experiences, experiential marketing decisions are directly influenced by the senses and the consumer’s emotions enticed in real-time or at point of purchase.”
She explains that the benefit of experiential marketing extends beyond the enticement of the consumer as it allows the brand owner or custodian to tap into the psyche of the end user, as a consumer’s experiences are directly linked to their purchasing decisions.
Stewart suggests geo-location software is also a possibility in store.
“With geo-location software, retail brands are now easily able to pre-empt consumer decisions, drawing on available information to create easier and more enjoyable shopping experiences. US retailers are currently leading the charge in this regard, with Macy’s having recently launched an in store navigation app for their Manhattan store, which can guide shoppers to locations where purchase is most likely.”
Stewart also emphasises that social media networks can be better utilised so as to offer shoppers a more seamless in-store experience.
“If managed correctly, these platforms can be used to create dynamic relationships with customers, allowing retailers to react in real-time to shopper queries and complaints. For instance, should a customer feel they are waiting too long in a queue, they should be able to tweet this, and have the retailer react by opening up another till point. Not only does this improve the nature of the experience for the consumer, but it also helps to establish dialogue, which is instrumental in forging a real and lasting brand relationship.”
Rather than being forced to trawl through myriad tweets in order to locate relevant consumer comments, brands would be well advised to implement an in store hashtag system, and take the conversation into their own hands, he advised.
“By having these types of discussions with their consumers, brands can accumulate valuable data, allowing them to anticipate future purchase decisions and improve their in-store environment so as to deliver solutions that their shoppers want,” Stewart said.
One of South Africa’s largest diversified retail groups, TFG, which is the holding company of @home, Foschini, Markham, Sportscene and American Swiss, has broken ranks with the rest of the retail industry by giving shoppers instant rewards instead of loyalty points.
Today’s shopper wants instant gratification according to TFG marketing head, Kathryn Sakalis.
She says consumers also don’t want to waste any time filling in forms or waiting for vouchers to arrive in the mail.
The rewards programme has intelligence built in to customise what each customer might get, best matched to suit the individual customer. Ideally no two customers should receive the same offers, explains Sakalis.
“The rewards could be on related products within the @home store. For example, you’ve just bought a duvet and the reward will be a special discount on a duvet cover. Or you get a R50 cash discount off your next purchase on other product categories within @home or even on product at any other of the retail brands within TFG.
“The system is smart enough to integrate the customer information on each purchase and match it with stock data in order to create an ideal offer custom made for each individual.”
More than a million customers took up the offer within nine months, and the group has already issued in excess of 1.6 million reward vouchers which are being redeemed.
Provantage, which gives brands access to the top 60 South African malls with more than 45 million monthly consumers, terms malls the “modern day marketplace”, servicing shoppers with more than just retail solutions and activations that take place in store to entice sales and motivate brand switching.
Provantage managing director, Jacques du Preez, says the digitisation of the shopper marketing environment is the biggest trend in the industry right now.
While 80 to 90% of in store and mall media is still traditional media, from gondola end displays to the major channels which are traditional print and packaging based, there is no doubt that digital is making its mark, despite a bumpy road in the last few years for some retailers and their digital partners.
“The verdict is still out on the efficacy of on shelf mediums. We still know that human intervention – professional, well trained promoters – is still the most effective,” Du Preez said.
Media has to add more value to the shopper experience and be a guide in terms of shopping and decision making, he says.
Digital should not be used in isolation, but in conjunction with other mixed media and marketing elements. “The other thing we are finding in the market with the whole digital migration thing, is that the market saw it as out of home, in the billboard buying mentality, and now it has moved more towards the TV buying guys and that is the budget we are hunting. TV screens are more understood and growing.”
Du Preez is adamant that in store media will go digital and the challenge is understanding how these different channels engage and influence shopper behaviour.
“There is a lot of learning and education we have to do first. But our kids are encoded digitally, it has to go that way.”
Budget currently remains a problem as shopper marketing comes out of the trade marketing budget, but Du Preez says it is about brand custodianship and really understanding the entire consumer journey.
For players active in this marketing channel, it is about understanding the whole communication channel.
“Do we understand the entire communications effort? Do we know when we engage the consumers and close the deal with an on shelf marketing effort? There is a big question mark over this…”
Du Preez said there was a big difference between the higher and mid to lower LSM consumers.
“With high end consumers you have to really add value. You cannot have a consumer coming up to a promoter with technical questions they cannot answer.”
With mid-LSM consumers, there was more engagement, more sampling, more coupons and giveaways. They wanted to get involved, he explained.
“A lot of purchasing decisions are habit. Consumers buy a brand because they always do.”
Lee Curtis, Primall Media executive head, sales and marketing, says there has been significant growth over the past five years in the mall branding business.
“We have seen a significant uptake in markets from a media perspective. Our profile has grown a lot and from being a nice to have a few years ago, people are now using it as a serious medium and support to above the line campaigns.
“Marketers have started to realise the power of using this space to communicate to people – shopper marketing is the last message before people make a purchasing decision and it is an opportunity to influence that purchase decision. People have money in hand, and we are influencing those purchase decisions.
“We speak to people during the day and carry that message through – reinforcing what they are seeing in traditional media. And what they are now doing in store, they carry through into the mall. Brands have different strategies. Clinique is one of our oldest clients and their strategy was to be outside in the mall outside the key retailers that they are available in.
Curtis explains that based on research done with the South African Council of Shopping Centres, anywhere between 62% and 75% of total retail sales in the country come from shopping malls. That equates to R400 billion (2011) – a powerful and influential medium. These figures should show growth for 2012, he says.
That equates to 3% to 5% of total out of home spend, although some stats are not calculated into the research and recorded on Adex, and Primall is in discussions to update the reporting.
“There is definitely room for growth.”
The average person spends two hours in a mall and some even up to six hours.
“Property owners benefit from the revenue we bring them from our mall activations, they get a percentage.”
Curtis agrees that innovation in the sector will come from the full integration of digital into the channel, with digital video walls, digital screens, more digital media options for the mall space.
“The challenge is how we link that to the social aspect and to provide real solutions to drive interest and interactivity.”
The buzz around shopper marketing is as important as CRM was 10 years ago, believes Dave Mackenzie, Boo! Surprising Media Solutions founder. “Shopper marketing is hot – and probably too broadbased a term.”
The biggest challenge of shopper marketing is making sure trade and marketing work together. He cites an activation he did for an alcohol brand in an outdoor square, surrounded by restaurants, which had no stock of the brand Boo was promoting. It was a failure on the part of the client to pull through the brand activation by ensuring his sales team sold on the brand to the eight to 10 restaurants which overlooked the brand activation.
“The below the line space is incredibly exciting and within that category, everyone is trying to target the shopper. There is lots of clutter in the environment, but people are going there to engage with the clutter, they have money in hand.”
Mackenzie says people want more choice and the secret is how to make the communication more sophisticated and that is where digital comes in.
Mall media is definitely working, Primedia Lifestyle’s Doug Mayne reiterates, because customers are already there to spend money. The key is closing the loop with above the line media and driving people to the mall and in to the store, with offers or spend drivers.
“Our space is heavily accountable, we know how many people visited today and on the same day last year in our malls. From a global perspective, with our number of malls and feet through the door, we are right up there behind Australia, London and the East.”
In fact, South Africans on average, have about three malls they visit on a regular basis, for different reasons: shopping, entertainment and convenience.
The final frontier of understanding shopper marketing lies in the psychology of classical consumer behaviour and Provantage’s Du Preez doesn’t believe many brand teams and marketing teams are trained adequately in this discipline.
Primedia Unlimited is Primedia’s idea and innovation shop, growing and launching a host of new businesses into the retail/mall/store environment in particular. Its CEO is Ken Varejes.
“In today’s world with technology, everyone wants to feel special. If you have the ability to target the consumer with the way they want to be spoken to – that’s what it is about. Marketing is about uniqueness. How do we interact with the consumer in the way they want to be spoken too? This is not a quick fix, it is a process you have got to develop,” explains Varejes.
“People live out of home and shopping malls are one of those places. There is massive dwell time and that is why my focus is there.”
From a footprint perspective, Varejes says he is getting through to a 20 million shopper base at malls such as the V&A, Canal Walk, Cavendish, TygerValley and Golden Acre.
“The key for us is getting those malls on board in our portfolio. It gives us all the rights – from parkades to escalators, lifts, digital video walls, screens, etc.”
Varejes says technology has enabled so many of their processes, that it has totally changed the game.
As far as future growth goes for the company, Varejes will be focussing on bringing in mobile in the digital mix; as well as drive expansion into Africa.
Some of the shopper marketing trends, Varejes is part of, or is predicting, are:
- Launch of a smart bench next year by Primedia: this is a circular bench with free wi-fi built in, which will be trialled in the mall space in South Africa. There are opportunities for retailers and brands to market themselves with this innovative new product. “There is a bit of marketing when you open up the wi-fi, some questions to answer… nothing is for free, but it is a research tool of note,” Varejes explains.
- Shopping malls are experimenting with apps for malls and trying to find ways to entice consumers to download the apps and have an incentive to open up the apps.
- Understanding the individual is the next challenge for Varejes and his business heads, so they know where to target marketing in the malls up to five years in advance. “That is the future, targeting marketing directly at the individual,” says Varejes.
- Facebook is one of the hardest elements to crack in this market, Varejes notes. “This business is about people and what people want. It is more about understanding the psyche of people and getting into their headspace. Digital is a slow burn, it is not a quick solution, but we are integrating more and more.”
- Touchscreen technology: allowing shoppers to interact with touchscreens in the shopper environment will be big in 2013, predicts Varejes. “Digital technology has started to increase exponentially because the prices have come down. Interactivity in the mall and in store environment is definitely a trend.”
- Couponing needs to be integrated into mobile services, Varejes advises, as then, maybe, coupon uptake will improve. Coupon redemption in South Africa among consumers is very low.