At first glance, the decision by McDonald’s to open up some of the British and Irish farms that supply beef and eggs to its UK restaurants to selected consumers appears to be a clever, carefully crafted PR exercise to take advantage of the horsemeat debacle.
Except, of course, it’s not the first time McDonald’s has taken this step; it did so in 2010 as part of a PR campaign in the run up to the London Olympic Games. For this reason, it is too easy to merely dismiss the move as a PR stunt. As a brand McDonald’s has worked consistently to promote health and the provenance of its ingredients. If it is a PR stunt at least it appears to be one with substance; an effort by McDonald’s to walk the walk as well as talk the talk.
But there are some interesting elements to the move. For a company that is renowned for exercising close control over the way its brand is managed and perceived, allowing consumers to roam around farms suggests an apparent surrender of control even though the initiative is almost certainly being managed in a very controlled manner. But perhaps the balance is that it may contribute significantly to McDonald’s ability to modify perceptions of what fast food is all about. In this sense, by focusing on provenance McDonald’s has put itself in a space you might more likely expect to be occupied by a Waitrose or a Morrison’s.
It is not unreasonable, though, to believe that McDonald’s would only have taken this step if it felt it was commercially the right thing to do. Could it be that the ethical thing has now also become the commercially best thing to do? If that’s the case, this could represent something of a sea change for brands. Will it make us feel better about McDonald’s if we are users, or reappraise McDonald’s if we are not? And how do you measure that?
Understanding the impact on the target audience from this kind of campaign is important. If you don’t get insights from it that can be fed back into the business, you have to question whether the bulk of the value is being missed.
Experiential marketing like this can, and should, go hand in glove with experiential research. By using the farms, McDonald’s is giving its consumers an experience of its business they wouldn’t otherwise have gained. They will be immersed in the brand and encouraged to re-evaluate the way they think about it, offering unique and fertile ground for researchers to till. Indeed, conducted effectively, research at this stage will enhance consumer engagement still further and produce a better level of insight than would otherwise be obtained from more classic research techniques.
This adds depth to an initiative that might otherwise be dismissed as a stunt. It creates a “co-creative” attitude amongst all stakeholders – tell consumers what the issues are so that they can help address them. By using the farms, they have an unusual venue that will help create more theatre and experience. They could optimise the events by enabling direct interaction between client teams and consumers, which is great for client teams because they get to ask questions immediately, observe people up close and personal and also answer questions to move the process along; great for consumers because they feel valued and included and their curiosity about who is behind their favourite products is satisfied. <br><br>
The question is whether McDonald’s could go further and give their consumers a broader experience to secure more detailed insights. Why stop at the farm? Why not go from field to box and take a group of consumers from the farm through production all the way to the restaurant?
There’s a Holy Grail for brands and retailers: to embed themselves so much with the families that make up their core demographic that their place in the family shopping basket is secure. Some try this through sporadic, tactical promotions which tap into interests and trends – collect tokens for a free tennis lesson, for example – whilst others try to create initiatives that lead to deeper, longer term engagement.
So it seems with Waitrose, which has unveiled a national ‘Grow and Sell’ initiative aimed at encouraging 7 to 11 year olds across the UK to grow their own produce and sell it to Waitrose customers, and Heinz with a Grow Your Own campaign to encourages families across the UK to grow their own tomatoes. Heinz is giving away free seeds via Facebook.
There are sound commercial as well as social reasons for these initiatives. The growth of online shopping and Click & Collect will lead to fewer people coming in store. With less pester power going on in the aisles, brands need to find new ways of engaging with parents and their children, whilst over the longer term consumers are going to be expecting brands and retailers to be engaging with them more at this deeper, more genuine level. Note the difference between “engaging” with them and “marketing” to them.
Both Waitrose and Heinz seem to have found something with authentic consumer appeal. The initiatives not only tap into families but, by virtue of their educational content, to teachers and businesses as well. They warm up the parents, remain close to each company’s particular brand values, fit with current trends and interests whilst being undeniably child friendly and educational.
Unlike the more sporadic promotions, where there seems to have been little contextual research undertaken into what parents really value and what would have a legacy beyond the immediate life of the promotion, here research appears to have helped create something distinctive but which has genuine appeal. Using a more experiential approach to qualitative research, promotions teams can create that engagement with mums as part of the ideation process for these initiatives. Quantitative research can also be designed to better engage with respondents – getting them involved with the issues, enabling and empowering them to feed back.
There’s a lesson here for all of us. Creating authentic engagement requires brands to work harder, think longer and research their promotions better. It needs them to research again once the initiative has happened to undertake a proper evaluation and explore how it can be developed further. Above all, it’s about showing not telling and demonstrating a willingness to have an authentic two-way relationship.
New research from the British Promotional Merchandise Association says that half of the British public have taken action after receiving a promotional product, compared with only 19% after seeing TV advertising, 11% for online advertisement, 10% for print and 9% for direct mail. Promotional products are also considered the least annoying by consumers.
But what does this actually tell us and are there lessons that brands can draw as a result? First, the top line shouldn’t really come as a surprise to most of us. It merely underlines the fact that people love free stuff and that in a world of virtual complexity and interactive communication, the brute simplicity of a classic marketing approach can still cut through.
The other caveat we would add is that consumers, generally, ALWAYS ask for free samples. It shouldn’t be a surprise they claim this to be the most effective form of promotion, because it is tangible and they are aware of the link between getting a sample and then making a decision to purchase. You don't necessarily rush off to the shops the moment you see an ad on TV but it will subconsciously warm you up to that brand next time you're in the supermarket. And a promotion might lead to a very short term response whereas advertising is more likely to build brand perceptions over the long term.
Given we know that other forms of marketing work, often at a more subconscious level, we would caution that research used to identify (a) what sorts of promotional strategies brands should adopt and (b) what has been effective, need to take account of the unconscious effects of different comms strategies. This will range from observational qualitative approaches which explore the effect that a range of communications, media etc, have on people's behaviour, perhaps over time, to quantitative work which uses behavioural economics frameworks to cut through what people claim, to identify what they are likely to actually do.
We should also be careful in research not to equate likeability with effectiveness - e.g. before the now familiar approach to Cillit Bang advertising became all post-modern and iconic, consumers just found it plain annoying - but it worked!
Promotions are also rarely used in isolation and are usually part of a wider marketing mix. If I've seen an ad for Cereal X and I get given a sample at the same time - it's more likely a combination of the two that leads me down the brand bonding route. This makes it problematic to genuinely measure the effectiveness of a promotion quantitatively or try and disentangle it from a wider campaign mainly because few people ever claim to have seen/experienced the promotion and if they had it was mixed up with a multitude of other brand touchpoints.
Brands, for example, which use digital and social platforms most effectively, are those who do so to engage with their target market and reward users for their time. Promotions may deliver short term spikes, but persistence is the key to sustainable relationship-based marketing. This means combining engagement with measuring RoI as far as possible and then repeating if successful.
That's not to say promotions aren't effective. As well as getting a product into people's hands they can also work to build good feeling towards a brand - consumers are getting something for free. And that is probably the real message here - marketing these days is much more of a dialogue with consumers - consumers don’t want to just be told to buy something, more and more they expect something in return.
It’s not been a spectacularly good year for some of our leading High Street brands. Well known names like Dreams, the bed retailer; Axminster Carpets, and fashion chain Republic have all followed other leading names like HMV, Jessops and Blockbuster in calling in administrators.
However, for some of these brands, there may be a new lease of life. Republic has been snapped up by Sports Direct whilst news broke last week that ASDA was in negotiation to buy HMV with a view to reviving the brand. Tesco’s decision to buy the Giraffe restaurant chain is clearly a statement of intent to not only ramp up destination shopping and appeal to families, but also to balance the expected growth in click and collect and online shopping with a channel to drive consumers in-store.
Some leading names, of course, have already hedged by upping their online game enabling them to successfully integrate both their bricks and their clicks. This recognises the balance to be struck between consumers buying online, dependent on the product, but only when they have seen the product in store.
When questioned, many consumers will express sadness at the loss of some of their High Street staples – there’s still a Facebook group called “I Miss Woolworth’s” with 4000 members – but often many won’t be surprised either. But if these brands inspired such warmth and loyalty, why did they end up in so much trouble…and are there steps that others can take now to militate against nasty surprises further down the line?
The first point to make, of course, is that customer loyalty alone is never enough. Businesses fail because of a myriad of other factors, from management structure, to size of property portfolios, to product mix to pricing strategy. But there is a clear indication of cognitive dissonance when it comes to customer perception of brands like this.
Some years ago we were involved in exploring the effect of recession on the high street. What was apparent was that whilst people had genuine affection and nostalgia for brands like Woolworths, few people could remember either the last time that had visited the store or when it had been their first choice, rather than fall-back destination, for whatever it was they were looking to buy.
There’s a similar feel this time around, with many HMV and Blockbuster customers, for example, acknowledging they had visited the stores to browse new releases which they then either bought more cheaply online or simply downloaded. So why wait for the post-mortem? Why aren’t brands, who feel that the path they are treading is not completely risk or problem-free, using such research now to help navigate their way through? Identifying customer loyalty and satisfaction is one thing, but using research to pinpoint why people are coming in store, what they are (or are not buying) when they are there will deliver a gap analysis between attendance at the brand and actual purchasing behaviour. Insights gained from such work can inform all aspects of the company’s strategy and allow changes, some radical, to be made before it’s too late.
Who knows it may just save a few “much loved” brands and hundreds of jobs and even contribute to renewed vibrancy on our High Streets. Surely that has to be something to work towards?
Picture the scene. I was sitting back at my desk, mug of coffee on my right, cheeky hobnob on my left and I began to read some new research from The Village Bakery claiming that eating unhealthy snacks at your desk could cause you to put on almost half-a-stone a year. Apparently, the average woman puts on 6lb 3oz – the equivalent of a whole dress size – while men see their weight increase by 5lb 2oz.
Needless to say, I put the hobnob back in the pack. Biscuits, apparently, are our most common vice, closely followed by chocolate, crisps and cakes. A third of us tuck in as a way of coping with stress and nearly a quarter look for a sugar rush to get us through the afternoon.
Now this contrasts (or perhaps partly explains) the explosion in the specialist diet product market in the UK. More of us than ever, it seems, are turning to specialist slimming foods to lose weight as sales of diet shake mixes, food bars and meal replacements have risen by up to a third in the past two years. Brands such as Weight Watchers, Complan and Slim Fast have gone from being niche to mainstream in relatively rapid time. Indeed, it has been reported that Slim Fast products have seen sales increase by 32 per cent across the leading supermarkets over the last two years, with sales of these products likely to continue to grow as adults see them as an easier option to help them lose weight.
The possibility here, therefore, is that the niche becomes the mainstream and begins to seriously impact on the brands which presently make up our weekly shopping basket. However, from developments over the last couple of years, it seems apparent that brands are recognising not only our need to eat more healthily but also that there are potentially rich commercial pickings available to them by encouraging us to do so. You need only look at products like McVities Digestives Light biscuits (30% reduced fat), Baxters’ Healthy range of tinned soups and reduced sugar/reduced salt baked beans to see the direction the market is taking. Couple this with the drive by the multiples to offer healthier own brand products, as well as vast amounts of online information and recipes on healthy cooking and eating, and it’s clear to see where the battleground is.
Fundamental to this, however, is an understanding of what is going through the consumer’s mind, motivating them in how they eat and drink and, it would seem, how they assuage any feelings of guilt from having indulged a little more than they strictly would have wanted to.
Research here is fundamental. Detailed work with a panel of consumers can really help brands drill down and fully understand what motivates, what concerns and ultimately what influences their purchasing decisions as it pertains to healthy eating. We ask consumers to keep a weekly diary before we meet them to illustrate their thoughts and feelings towards food and drink; we look at their shopping receipts to see what they actually buy, when and where and why; we look at their purchases in the context of their lifestyle and their priorities, and we even look through their cupboards to explore their relationship with their chosen brands. The level of insight that this kind of ethnographic research can deliver to a brand can be critical in creating understanding of consumer motivations and can make a profound contribution to both product development and marketing strategies.
And, in case you were wondering, I put the hobnob back and had an apple.
Something’s afoot on our supermarket shelves. Gone are the days when beans would be beans, or cheddar merely cheddar. This, as we know, is the era of product diversity. But not just choice in format (sliced, block or grated cheese) or skimmed, semi-skimmed or whole milk (we now have soya and lactose-free as well); this is the era when brands see real economic potential in tapping into our special dietary needs or in tweaking a product formation to attract a new demographic to the category or the brand. More and more brands are doing it because it makes commercial sense for them to do so.
The latest major brand to make the move is Heinz, which is targeting a UK gluten-free market estimated to be worth over £100 million per annum and rising, with new gluten free dried pasta and gluten free sauce ranges. The fact that there are known to be approximately 125,000 people with coeliac disease in the UK, a figure rising on average by around 7000 people each year shows that this new departure makes sound economic sense. In the US, the market for gluten-free products is huge and was estimated to have reached a value of $4.2 billion by the end of 2012 so for products that can play beyond national boundaries the return could be significant.
However, as niche as the products may be, the shoppers are no less savvy or demanding purely because they are buying a gluten-free product. They will expect the same quality in taste, value and brand experience from a Heinz gluten-free product than they will from any other product that carries the Heinz name. And for Heinz, read any other brand looking to extend their ranges into new areas.
This increases the importance of effective concept testing at pre-launch stage. It not only means finding people specifically appropriate to the proposition, but also presenting them with a concept that meets the particular needs of their condition. Beyond that, of course, it has to be more than just relevant to coeliacs, it has to taste good and not give them the impression that they are having to compromise in order to eat healthily for their condition. And then you need them to be interested enough in buying the product at the price point that you have set.
The same rules apply, of course, whether the new demographic is being targeted on health or any other grounds. Douwe Egberts is launching its first flavoured instant coffee in the UK as a way, it is being reported, of driving sales among younger and non-coffee drinkers. They’re also hoping that the new range will encourage existing coffee drinkers to experiment a little more with their tastes.
Concept testing will take into account the issues and requirements of the target demographic, prioritising on features within the product that meet those needs. It can help the brand identify potential conflicts product features and proposed price points, in so doing exploring other potential barriers to purchase. And, of course, it will expose what may be blatantly bad ideas.
It isn’t foolproof, of course. There are always factors that will be beyond the control of the researcher. Research will not militate against a rival brand bringing out a product of their own that changes the consumer landscape and influences purchase criteria; a disruptive marketing campaign that affects the dynamics of the market or economic changes that influence price viability. But one thing’s for sure, not effectively testing your concept at all is almost a guarantee of failure in the market.
Independent butchers and farm shops have reported a 75% increase in sales in the month following the start of the horsemeat scandal which indicates that, wherever culpability may lie, some brands and retailers are losing the trust of the consumer.
That’s likely to be a temporary phenomenon with consumers expected to return to the leading brands for their meat and their ready meals once faith has been restored in the supply chain. But imagine for a moment that it isn’t temporary and imagine again that the decision to switch suppliers or brands extends beyond processed meat products into other areas. Would this breach of brand loyalty matter? And, if so, why?
The brand–consumer relationship is like any other. It exists on mutual shared interest and trust. In the same way that it is difficult to pin-point exactly what the attraction is between partners, so the brand consumer relationship is about the totality of the shared experience between the two. It is about the quality of the product, for sure, but it is also about more ephemeral factors, including how the brand makes you feel, what you think it says about you and about the reliability of that brand as a partner. Once you begin to question the reliability or the quality of the brand or its products, relationship breakdown is a real possibility – and counselling may be needed to put the relationship back on track.
In this instance, researchers can act as the counsellors. We are well equipped through a variety of techniques – from experiential-style focus groups, through structured online surveys carefully designed to elicit both a high quantity and quality of response, and even observational research and in-home interviewing – to help establish not only what the consumer feels about the brand or the product, but also what it expects from the brand or the product in order to consider re-engaging in the relationship.
Situations like ‘horsegate’ not only anger, worry and even frighten consumers, they also empower them. Ultimately, these empowered consumers will be the ones to decide when brands have regained their trust. In such situations they often look for and act on the advice of others: family, friends and sometimes strangers.
The media will bombard them with information and opinions that will also influence their views. Brands need to consider how consumers engage in social communities, online and offline, to share ideas and views. If brands can listen, learn, adapt and prove they have done so within these changing rules, then they may be able to win the consumer back. And the fact that the brand has taken the first step in seeking that reconciliation with the consumer could be the first step towards a bright new future together.
Understandably, those of us active in the research community will bang the drum for the role that effective consumer insights can play in creating solid foundations for brand expansion by informing new product development and strategic marketing decisions.
The growth in digital technology has made information on consumer attitudes more accessible than ever, as we have demonstrated through our own use of gamification strategies; though the true value comes in not necessarily gaining the insights, but in understanding them, interpreting them and then knowing how best to deploy them. The question is whether brands are utilising the insights they gain to best effect and whether they use them as widely as possible to provide a benchmark for most developmental and promotional activity.
Because of the way that brands are structured, eg. one brand team does not necessarily work with another brand team, much research is undertaken in silos. This means that sometimes research is duplicated and potentially valuable customer insights are not shared. There may be internal reasons for this as some brands may be competing for budget or to secure budget for an NPD idea that would leave another brand to fight its own corner without budget. Brands would benefit considerably from enabling their research agency to to produce consumer snap shots and general insights which can be cascaded through the company.
Second, brand teams are increasingly transient which means that brand learning is not maximised because historical knowledge is often not carried forward. Research agencies which have worked with an organisation for some time, in contrast, will have that historical brand knowledge which could be deployed for real benefit by the brand.
Ethnography is one of the most valuable research tools, yielding a depth of insight that cannot be gained by any other means. It enables brand to access insights that are not only relevant but embedded in the consumer’s every day real world experience rather than pieces of essentially abstract data. For some brands, taking full advantage of what is truly available may require something of a mind shift away from a production-oriented culture to an insight-led culture. But only by doing so can they be confident that they will be developing products that are based on sound consumer methodology rather than producing products they hope the market will embrace. As we said at the start, the name of the game is to never lose sight of the insight.
The introduction of Tesco’s “Loves Baby” range isn’t, on the face of it, particularly startling news. Own-brand products have been increasingly favoured by consumers across the board and, even in the baby care category, the supermarket has long been active both with its own-brand products and its Tesco Baby Club, now rebranded the Tesco Loves Baby Club.
But this assertive step into the space vacated by Huggies could be the start of something bigger. There are suggestions within the media that Tesco might be looking to seriously challenge the dominance of P&G’s Pampers. The nappy (or diaper) landscape is clearly changing radically.
And yet Tesco may have to work hard to convince shoppers to switch. With nappies, consumers may need concrete evidence that the own-brand alternative is better.
But if Tesco were to be successful, would we start to see more consumers seeking out own-brand-brands in certain categories on the strength of their product characteristics and not just their value?
For brands, this might mean that they need to work harder in the way they communicate and emotionally connect with people. But it could also imply that product innovation is more important than ever. If their product remains demonstrably superior then brands will retain their favoured status over “cheaper” own-label.
Either way, if the battleground of the future is product excellence and uniqueness at the premium end, and product quality at the value end, the way that products are developed – and the co-creative involvement of consumers – will be more critical than ever.
In an excellent article, ‘The 13 bad marketing habits to break in 2013’, Marketing magazine includes price promotions at number six. The article quotes Thierry Billot, the managing director of brands at Pernod Ricard, as saying: “If you follow the road of price promotions, you will quickly realise it’s a dead end, with no profits.”
The article says that price promotion “is not a sustainable marketing strategy” and that brands have sacrificed long-term brand equity at the altar of short-term profits, but is it really as black and white as that?
Some brands in some categories have far more leeway than others to hold their price positions and stay out of the price promotion trap. When researching price promotion risk we have found that the most important factor is the degree of substitutability in the category and how prepared consumers are to switch between brands. This is itself related to the extent to which brands are perceived to be different and to offer different things.
An example of a category with very high substitutability is mainstream lager. Consumers are very willing to switch between brands based on the best price deal. We may see differences in brand preference and rating but crucially we see low scores on differentiation and uniqueness. Unsurprisingly, it is a very heavily promoted category. Picking the brand on promotion that week amongst a small number of acceptable brands is the key heuristic shopping behaviour across a lot of categories (shower gel, baby wipes etc.).
On the other hand, in categories where products really offer different things or where one product has created a stand-out position, companies can avoid using promotions altogether or instead use it more tactically to encourage consumers to sample different brands. In categories where there is no discernable brand leader or product differentiation, consumers are more likely to simply shop around for the best available offer.
Some of the research implications of this are interesting:
1. One of the reasons that difference/uniqueness is important for new products is that, long-term, it enables price points to be maintained which will impact on likely success
2. When researching in-market pricing strategies (such as via conjoint) it is vital to understand the degree of difference across the choices. This is because in research, consumers will claim they are more responsive to price than they actually would be when substitutability is low. On the other hand, in markets that tend towards commodity e.g. mainstream lager, the research response is often very close to observed reality.
Last year we published a qualitative research study that showed how Britons were rejecting traditional consumption and wanted to use Christmas to reconnect with the things and people that mattered most and are closest to them.
A year on and the evidence suggests that this remains the case as Britons look more to the simple things that encapsulate the spirit of the season, rather than a more naked, commercial approach to Christmas.
It is interesting to see how brands and retailers have been using these insights to inform their product and marketing campaigns. Consumers continue to view this Christmas as a buffer against a painful present, a time to recharge batteries, and to reconnect with matters they view as genuinely important.
While they do this, they are perhaps thinking more about practicality, planning and early budgeting than last minute magic and spontaneity, at a time when thrift has become more than merely a lifestyle choice.
Such insights are also reflected in Christmas advertising this year as Waitrose presents us with a stripped-back television advertisement, for which Delia Smith and Heston Blumenthal have both waived their appearance fees (instead the cash will be spent on Waitrose’s Community Matters charity scheme).
John Lewis’s advert, which follows last year’s epic, features the tag line “Give a little more love this Christmas”, features a snowman searching for the perfect present for a mystery recipient whose identity is not revealed until the final scene (whilst the choice of “The Power of Love” for the soundtrack should not be overlooked), and ASDA, which supports the contribution of mothers, with the strapline ‘Christmas doesn’t just happen by magic’.
ASDA said that the ad reflected the fact that for mums, despite the pressure, their big reward is looking back at the end of Christmas day, at a happy and smiling family, and thinking ‘I did that’. So the themes of Christmas this year are modesty & homeliness, intimacy & love.
In the midst of all this Christmas spirit, consumers are making savvy decisions and feeling good about it. Greater effort will surely be invested this year in finding a bargain or in doubling up vouchers, finding a discount code, collecting and using points across all purchases, really checking deals in order to make hard earned money work harder and go further.
Recent research by first direct found that 58% of people are looking to save money on the perfect party outfit over the festive period with women more likely than men to shop for a clothes bargain (60% versus 49%) - and more than three-fifths of them get thrifty when it comes to their party attire compared to half of men.
The most common ways of saving money, according to the research, are shopping around more than before (46%), using discount codes or vouchers (31%) and retail reward points (29%).
Christmas is still about enjoyment and escape, and a certain degree of excess is traditional but, in keeping with the subdued times, the sense of modesty and restraint reported by our respondents last year remains the order of the season.
In spite of the jubilympic summer (or perhaps because of it), Christmas 2012 will be a contained affair in many families and so the conclusions for brands appear to be the same a year on:
- articulate hope and a positive long term vision as consumers are looking for inspirational light at the end of the tunnel;
- reflect the way that consumers have, in some ways, temporarily lost faith in materialism and focus on values rather than things;
- focus on the local, facilitate family, be active in communities and, at very least, continue to overtly support the British economy with products created and built locally.
Brands should continue to tap into rituals which offer familiarity, comfort and trust for consumers and create promotions which reward planning and effort, as well as “hard to ignore” deals.
Yesterday, Research published a comment piece on the role research could play in activating the UK government’s push to introduce a consistent system of front-of-pack food labelling nationally next year, Here, we offer an alternate view to that debate
An alternate view to the role of research in shaping the government’s labelling strategy
Traffic light labelling is a small step in a positive direction and there is plenty of data to show that grocery shoppers like this style of labelling and find it helpful. Research published last year by DEFRA showed that 80 per cent of people rated health as the most important factor affecting their buying decisions.
Most shoppers – 82% - said they actively sought to buy healthy foods. The figures also indicated, though, that people’s preferences don’t always match what they ultimately buy, with price being a major factor in many people’s buying decisions, especially in the current climate. In practise, though, anecdotally it would seem to be further down our list of priorities.
However, too much research focuses on one issue - such as labelling - in isolation, rather than looking at it as a whole. One of my colleagues undertook research some time ago with housewives, where each was asked to compare their last supermarket shop.
With all of the produce on the table, they discussed what they had bought and why. They became quite competitive and in their efforts to win their impromptu ‘supermum’ competition, they became strong advocates for their products and the discussion was highly revealing. Health was rarely part of the argument. Price, offers, quantity, shelf-life, convenience came first.
And then even when health is considered, the consumer definition of health is still poorly defined. In recent research we undertook, mum spent far more time than you would think possible trying to decide whether potatoes counted as one of your five a day. Milk - vital for child health - is too often restricted because it is seen as a high fat food (even though full fat milk is still only 4% fat). Most of them end up aiming for a balanced plate and call it a day.
It is going to be important to ensure that the consumer is educated to understand the information behind the labelling. A knee-jerk reaction to a product with a red label on it could be counter-productive. The word ‘fat’ on a product could turn off the consumer, even though some fat in a diet is essential. Similarly, most products will contain an element of sugar, but some from natural sources like tomatoes rather than synthetic additives.
Brands are going to have to adopt a more holistic approach to health; ingredients may not be enough. Brands and retailers may have to work together to create a well-being experience which may involve the in-store experience - display, promotion, training and product presentation – as well as the brand itself.
There is evidence of this in some areas. Many multiples have revamped the way they display fresh produce so that it has a more market-like, natural feel and there has also been a move in the UK to balance the consumer’s desire for prepared meals with “semi ready-to-eat” meals. These products, with fresh ingredients that you can see when you buy them, are ready to take home and cook rather than just warm up. Tesco’s has had success with pre-prepared vegetables and meals in its Finest range as well as its City Kitchen prepared meals.
However, “Finest”, “City Kitchen” and those like them remain premium brands. So now that we are finally getting a universal and comprehensible labelling system, maybe it’s time for brands to look at the wider context of healthy eating and be able to demonstrate to consumers that you can buy and eat healthy products on a budget.
Are you in the Yuletide mood yet? Thought not.
Christmas decorations and lights have already gone up in Nottingham’s Old Market Square this week and it’s still a good fortnight until Halloween; Christmas Trees have been available in John Lewis since the start of the month, whilst the BBC will film its “Songs of Praise” Christmas special on October 24th. And if you thought that was early, they will film the Easter special the following day.
As Loudon Wainwright III sang: “Suddenly it’s Christmas, right after Halloween. Forget about Thanksgiving; It’s just a buffet in between.”
So has Christmas arrived earlier to fill the post-Jubilympic gap? Are retailers trying to keep a low level of celebratory consumption bubbling in the background with crackers & cauldrons competing?
Whether Christmas is indeed arriving earlier or not, one thing is for certain. Throughout the recession, talk of an austerity Christmas has never really come to reality as families have saved and stockpiled to ensure they have the best Yuletide season they can. The same will be the case this year. During what has been an undeniably tough few years, many people have clung like limpets to calendar staples like Christmas and Halloween as opportunities for an escape from everyday drudgery. It’s arguably one of the reasons why both the Jubilee and the Olympic Games inspired such overt public enthusiasm and excitement.
But if we have clung to such events, so have brands and retailers, placing most of their hopes on a consequent economic bounce. That may be misplaced given that any post Jubilee/Olympic lift seems to have been transitory. Alternatively we may be heading towards an economy that simply bases itself on lurching from one special occasion or set-piece event to the next and just takes the economic benefit of each as they come along.
The challenge for brands is to understand who is buying and for whom, what is influencing those purchasing decisions and to be able to respond to changing attitudes and behaviours in a way that enables them exploit whatever potential exists. This is where the use of online research and its ability to deliver insights quickly can assist brands in re-pointing activity fast, rather than having to wait ‘til the following season to implement slower moving research findings. Engage has also been creating more “experiential” qualitative research to transport consumers to a different mindset – useful for “out of season” research. Understanding how, where and why the shopper is buying is should be central to a merry Christmas for brands.
The multi-channel shopping environment, of course, could also mean that Christmas may be less evident than when we shopped in a purely bricks and mortar world. Royal Mail reports that 40 million people shop online for Christmas gifts. This, coupled with the efficiency of high street retailers in terms of getting stock into store, also means we seem more comfortable buying later in the year than ever before.
The propensity for retailers to start their January sales pre-Christmas means that more and more people are waiting as late as possible in order to bag a bargain. That also means it’s harder and harder for brands to calculate their own Christmas figures, particularly if they are forced into promotional or discounting programmes. Figures from 2009 found that nearly one fifth of Britons left at least part of their Christmas shopping until Christmas Eve, with Selfridges saying that around 80 per cent of its customers on Christmas Eve were men. So in these uncertain times it’s nice to see that some things don’t change.
In the last few months I’ve joined the Groupon crowd. I used the discount voucher site to treat my wife and daughter to a pamper day and sent my son off drift racing at Brands Hatch and all, I’m told, at a fraction of the cost of booking it independently. They were happy and so was I – enjoying the benefits of crowd purchasing or ‘crowd clout’ which delivers compelling offers to consumers on a daily basis.
It’s big business too, as the rise of rivals Living Social and Wowcher have proven. Even Amazon has now launched its own daily deal website in the UK, beginning with London, where AmazonLocal will email geographically-relevant offers to users every morning, and offer reward points to those using an Amazon credit card. What’s more interesting, though, is whether this is a passing trend or one which will redefine the way we, as consumers, begin to purchase any number of items. In this, though, the signs are not positive. To do so, the benefit has to be as evident to the supplier as it is to the consumer and the intermediary and that is where the jury remains out.
Sales at Groupon exceeded $750 million in its first two-and-half years, while the company’s activities cross four continents and reach nearly 40 million subscribers. However, after the publication of worse than expected financials recently, an analyst at Citi Investment Research suggested “a rapidly deteriorating core business - ie the daily deals business - and Groupon needs to act fast to fill up this hole with new initiatives”. The company believes that growth may come from new services including an instant mobile deal feature; Groupon Goods, for deals with national retailers; and Groupon Getaways, for high-end travel deals, but only time will tell if the model will serve vendors as well as it serves consumers.
The interesting thing about daily deal sites is the extent to which they change not just the products that we buy, but the classic decision-making processes we use. Does the increase of impulse buying of things that we hadn’t previously thought we needed, just because they are a bargain, make us more rational and careful in our regular grocery shop, to balance our frivolity; or less so, because we have developed a taste for bargain spontaneity?
What is certain is that now the initial excitement of daily deals has died down, these companies are going to have to be much smarter to survive. At the moment, they feel a bit like a particularly manic jumble sale. I saw cheap wills being offered just above bikini-line lasering the other day. That is crazy. And some things should just not be offered on a special deal. Long-term, it could impact on the service industries in particular. Services that were too expensive for the majority, pre-Groupon, have now decreased radically in price, because of the number of Groupon offers available.
Daily deals could continue to stimulate consumer spending and help businesses – but they need to start working in a more sophisticated, thought-through way, if they are to succeed. But – and it’s a big but – a study by Rice University in Houston, Texas, found that 40% of companies which had used Groupon to promote their goods or services said they would not consider using Groupon again. Presumably, although suppliers pay a significant premium for the service, they would be happy to do so if it were delivering sustainable custom.
The findings from the study are interesting. Two thirds of customers won’t buy more goods and services than are offered in the deal; only one in five Groupon users becomes a repeat buyer, and 80% of Groupon users are using the site for the first time. Like me, I’m sure, they are using it for sporadic, opportunistic purposes such as treats or gifts and thus pay little attention to the name and nature of the business they are buying the services from. I pay even less attention to the torrent of emails that rain down on me and others and which actively turn me away from becoming more engaged with the site.
All this seems to suggest a pattern of short-term relationships between the vendor and the consumer and, consequently, short-term relationships between Groupon and the vendor. And, if the old adage is correct, that it costs five times as much to win a new customer than to retain an existing one, crowdpurchasing sites like Groupon are failing to secure long-term relationships with vendors because they are not yet delivering enough repeat business for them. Increasing and broadening the opportunities for consumers, which would then in turn increase and broaden the benefits for suppliers, would likely increase sales and embed crowdpurchasing as a way of moving forward, even for opportunists like me.
Heavy vouchering and discounting have helped end 18 months of declining volumes for retailers while promotional activity has remained unchanged at 35% of FMCG sales, following continual use of money-off vouchers and coupons.
Although this is primarily a retailer-driven initiative, what are the implications for brands in being discounted? How can brands maintain perceptions of quality if they are being discounted? Is this the thin end of the wedge where the only way to sell is to be discounted?
Each of us, of course, have brands that we are likely to buy no matter what; discount or no discount, those products will continue to find their way into our baskets. But those brands are probably in the minority. We are in an economic phase where brands need a compelling proposition in order to remain at a premium within their category. But while discounting may persuade consumers to try something new, it is unlikely to lead to sustainable business unless the products offer a better experience than their competitors. The challenge for brands is to retain those consumers without retaining the price reductions.
Discounting, of course, doesn’t need to be quite so overt. There are ‘brands’ that discount more discretely but equally successfully. The secret hotels on lastminute.com, ‘shopping clubs’ or Groupon style offers can help bridge the gap between increasing sales and occupancy while avoiding brand equity erosion that accompanies continual overt promotion.
This works online too, with sites offering large discounts on higher-end fashion brands. To many, this makes premium brands more accessible without feeling like they are compromising on quality. While it doesn’t necessarily impact on how they feel about the brand, it may elevate how they feel about themselves. This can rub off on the brand by association.
There is also a more pragmatic view of discounting to consider. A brand being constantly discounted might lose its premium positioning, however it might (in the current climate) be balanced by a consumer’s delight at bagging themselves a bargain. In fact, not being discounted could be perceived as brand arrogance, as if you are out of touch with the problems of your audience. For FMCG brands, premium often equals a touch of affordable luxury – a small treat to brighten your day – so frankly the danger of undermining your quality perception through careful promotion is probably quite low. What might be an issue is who the discount is attributed to - as a brand you will be paying for the promotion, but the retailer will probably get the accolades and be seen as the shopper’s friend. So it might be important to communicate to consumers that the brand is responsible for the promotion rather than the retailer.
Brands should perhaps take note from politics - it is important to demonstrate to people how you share their pain, rather than telling them we are all in this together and retreating to your ivory tower of price premium.
Picture the scene. You’re relaxing at home, catching up with friends on Facebook, playing a game, doing your best to escape from the realities of the outside world. You need to earn a bonus to move yourself up to the next level and just as you’re about to do so, a brand pops up on screen and offers to provide it for you.
Irritating or inspired? Well, soon we may have the opportunity to find out because the move into the gaming sphere represents the latest response by advertisers to embrace new techniques to ensure that their advertisements are noticed.
Not only has Amazon announced that it is going to start creating games in a bid to earn itself a slice of the $6.2bn social gaming sector, but one of its competitors in the field, King, is to introduce a new in-game ad format that will allow brands to pay to associate themselves with boosts or extra lives.
It is easy to see why this could be tempting for brands. King claims that advertising across its gaming network could help brands reach over 30 million, predominantly female game players across Europe and the United States. But how will we, as consumers, feel towards this latest potential move by brands into another area of our private lives and leisure time?
We have become accustomed to using technology to bypass advertisements and sponsorship messages, most obviously through the ability to digitally record television and then fast forward. However, when it comes to television or radio, consumers are generally passive, compared to gaming, when they are arguably at their most active.
The key, I suspect, will be in the role played by the brand in-game and how heavy-handed that branding might be. Relevant in-game branding - for example a sports brand being represented within a sports stadium environment would seem to be a pertinent even subliminal fit (though the advertiser may argue “too subliminal”). With exposure this subtle and fitting, we would anticipate that it would enhance consumer perceptions of the brand.
Research has, in the past, supported this view. An IAB survey in 2007 found that 86% of gamers were happy to see ads placed within games if it brought down the prices they had to pay, whilst a third said they would be either quite likely or very likely to buy a product they had seen advertised while playing.Only 14% said that ads ruined the gaming experience. Interestingly, 40% said that ads in games made them more realistic while 27% said that interacting with a brand during the game, such as gaining more energy by drinking a can of an energy drink, did not constitute advertising.
However, if the brand is repeatedly associated with an event within the game that itself becomes frustrating, the player’s perception of the brand is likely to suffer by association. If in-game advertising is realistic, contextual and non-intrusive, it offers great potential to brands. But, beware, because if you get the context wrong, the downside for the brand could be significant.
Tell the truth. You must have taken a step away from your work for a few minutes at some point over the past week to cheer on Bradley Wiggins, Chris Hoy, Mo Farrah, Jessica Ennis or – perhaps just as importantly – any of the athletes who may have missed out on medals but achieved personal bests.
But can and should these Olympic feats inspire us in our business lives and – if so – are we harnessing it to best effect?
It’s clearly worked for one of my colleagues at Engage Research, who admitted having Wiggins in mind as she pushed herself to cycle to work faster, knocking a couple of minutes off of her usual commuting time.
This got me thinking about the lessons we can learn from Olympians to help us do our jobs better.
- Leave no stone unturned in your preparation. Research is critical to the way brands and businesses function. As the saying goes: if you fail to prepare, you prepare to fail. Securing the customer insights your brand or business needs will be central to your chances of success.
- Take a risk. Great athletes, like the most successful businesses, take calculated risks. They know the importance of spotting their chance when it presents itself and going for it.
- Relentless self-belief and enthusiasm. Top athletes won’t allow themselves to be battered by negativity. So if we don’t believe in our brands, nobody else will either.
- A desire to stand out from the crowd. Nothing will undermine your brand more than becoming ‘wallpaper’. Creating a distinctive identity with which your market can relate is crucial.
- Agility. There is ample evidence of successful brands recognising early that something isn’t working and then changing their strategy accordingly.
- Being part of a team. You only need to watch a successful relay or rowing team to see the importance of assembling the right team and then playing to the strengths of each of the members.
- Get used to disappointment. Whether you’re an athlete or a brand, get used to the ups and downs and learn how to ride both to stay ahead of the competition.
The times “are a-changing”, as Bob Dylan once sang. Retail industry bible The Grocer reports that, bouyed by the success of their ‘click-and-collect’ services, supermarkets are looking at extending this sales channel to non-food items. The publication suggests this could herald the dawn of the grocery drive-thru.
The implications for brands are significant. If there is a steady move away from in-store shopping towards click-and-collect, product packaging may need to be adjusted. Implicit in packaging design currently is the combination of front of pack short-cuts with more detail on the side and back of pack for those who want to know more. If you are not physically seeing the product and picking it up, you will not have access to this greater detail, the absence of which could influence your choice of brand.
Big-name brands (e.g. Kit Kats, Whiskas, Tiger beer) might not need to worry as they can continue to rely on strong brand recognition to shift units. However, transfer this to a pro-biotic yogurt or a cholesterol-reducing low fat spread, where the choice may require more active thought, then the way the product is presented online versus on-shelf may well impact on how people shop in these categories.
More often than not, all you get is a picture of the front of pack. The lack of product shots is a missed opportunity when you are dealing with consumers conditioned by Amazon and eBay shopping to expect photographs of every single product component from every conceivable angle. We constantly hear from consumers that they like see-through packaging because they like to see what they buy. And often clients can’t deliver that because of the cost and technological constraints of making that sort of pack. Online they could do it every single time. Yet few do.
And then there’s the unpredictable way products are described. A search of salad dressings produces this enticing product description for a Mary Berry product : “While every care has been taken to ensure this information is correct, food products are constantly being reformulated and nutrition content may change. We would therefore recommend that you do not rely solely on this information and always check products labels.”
So brands will need to give active consideration to how their products are being represented in the online shopping environment (size of the image, product details, juxtapositions) as new rules will emerge about how consumers’ respond to new brands or even brand extensions.
There’s no denying it: we’re getting older as a society. Figures released last week by the Office for National Statistics showed that the number of people in the UK working beyond the state pension age has almost doubled since 1993, to stand at 1.41 million in 2011.
Of course, this growing and ageing population not only puts pressure on more people to work longer, it will put pressure on brands to give greater consideration to how they address and exploit this fast growing demographic. After all, not only are older people likely to be the ones with most readily disposable income, they can be key influencers on both the choices made by their grown-up children and grandchildren.
Key to brands could be our changing aspirations and expectations as we get older, as well as our income. Those of us who will work some way into our previously planned retirement because our pensions or our savings had turned out to be inadequate may become miserable and reactive against spending money for fear of running out. This group could end up being of little value to anyone outside of the alcoholic drinks sector.
But there will also be those – and hopefully more of them – who do have enough money for themselves, but who will either have to or choose to stay at work because of their children. We know that children are living at home for longer and more children are staying in education, so a lot of parents are having to support them long after they should have flown the nest. It is interesting to note, though, that while the concept of an extended family all in one home is seen as a negative here, in some cultures, like Italy, for example it is more of a norm. Arguably this leads to less stigmatisation of those in old age. These developments have placed an added burden on people as they reach their 50s and beyond while some may also be having to support even older parents of their own. What makes this group interesting to brands is the enormous breadth of categories they either spend on or act as gatekeepers for.
The economic situation is behind much of these newer developments. The Daily Mail recently reported on the rise of “helicopter parents”, who having paid of the education of their children and now making a greater financial contribution to their further education, feel they have a right as well as a responsibility to “hover” in their kids’ lives and be part of their decision making processes.
Many of these “pensioners” will still be “young”, or at least younger than they used to be in terms of health and outlook. Their need to continue in work may well turn out to be a good thing as it minimises the risk of becoming lost in retirement, which in turn will maintain their desire and ability to exercise their purchasing power. This could be good news for travel, lifestyle, automotive and food and drinks brands for a start. The key, though, may be for brands to recognise these developments more overtly than they have to date and be less focused on the young and beautiful demographic. The figures suggest it could be time for brands to focus their messaging more clearly on the over 50s and not restrict it so obviously to age-related products, like healthcare, insurance or – dare i say it – funeral plans. Where’s the fun in that?
Value is centre stage again and Tesco’s recent replacement of its iconic blue and white striped range as a more comfortingly retro-packaged Everyday Value range has changed the rules. But how? We decided to dig deeper, by applying a semiotic eye to the way that the major supermarkets package their “value” ranges.
The first thing that even a cursory semiotic skim tells us is all these ranges are missing the customary “brand adornment” (photography, benefits, serving suggestions, extensive colour palettes...); we see a plethora of products with white backgrounds, simple retail master brand colourways, “handwritten” script fonts, line drawings of products. So one of the key rules of value range packaging – it is all about absence. The “conventional” meaning of this is that no money has been spent on anything other than hygienic containment of the product and basic information – stripped down to give you, the customer, best value.
But Tesco’s decision to break the rules and opt for a “de-stigmatised” design quietly breaks this rule. It reminds us that being able to afford the unnecessary adornment of branded packaging is central to the pleasure of consumption, of buying what I “want” rather than what I “need”. So, in contrast to Sainsbury and Asda who remain loyal to the puritanically stripped down approach, Tesco has decided that its value shoppers can have their Everyday Value cake and eat it, without being seen as “too poor to choose”. But (like the playfully redesigned M-Savers from Morrisons) it remains, recognisably, a value range.
The Tesco range also breaks the “standardisation” rule. Products in the Everyday Value range do not carry exactly the same livery – yes, they are recognisably of the same stable but use different colours, have different product shapes. This provides just enough of a sense of visual variety for the products to provide some of that “unnecessary” adornment needed for proper consumption. What’s more the visual style and the product shapes have a loosely retro style and so connote a bang-on-trend simpler time of housewifely thrift.
At the other end of the value market Waitrose essentials range conforms to many classic value codes. However its minimalist white “essentials” pack is dressed in picture-book-retro product drawings which connote an idea of lashings of ginger beer & a simple & more reassuring time. M&S reinterprets the value range rules in another way, principally through the motif of the “torn from a note pad and handwritten” label. Again the overt absence of “design” here says what all other value ranges say, (no wasted money), but behind the casual “notepad” motif, it is hard not to paint a picture of the surrounding domestic scene (a well stocked and well appointed middle-class kitchen or shopping basket carried from store to store collecting provisions).
So below the surface these ranges play with cultural narratives of need vs want, conspicuous consumption & cultural capital, puritanical rejection of adornment, the aesthetics of the Protestant work ethic and ideas of thrift & nostalgia...there is so much more going on here than value !
Tesco & Morrisons have shifted subtly away from the classic codes of value of Sainsbury and Asda. Time will tell which is the best approach, but Tesco’s move has implications for brands not just their retail competitors. The introduction of more visually (and thus socially) acceptable value ranges can only mean more private label competition for them. In belt-tightened-Britain brands should at least be aware that even retailer value ranges are now offering some aspects of the “consumption experience” that brands offer to their consumers, but at half the price. And that should be cause for concern.