From The Grocer, 21st January 2012
The one hard question that grocery brands should be asking themselves is, ‘how do I get my brand back onto the shopping list?’
Let’s face it, the average grocery experience is woefully inadequate. We have created a world of indifference where brand loyalty has been replaced by the best promotion that will guarantee an EDLP. Consumers have been conditioned to hunt down the best price regardless of the numbing experience that this has created and now we even have apps to further exasperate the situation.
The grocery world has depended upon ‘trade budgets’, since the beginning of time. But, in this extraordinary economy every day low pricess are simply not sustainable: the quality of the product is at its highest but the margins down to the wire - manufacturers simply cannot afford to erode their prices and nor should they have to. But how do they get a good price for the products they provide?
In this ‘promotion driven world’ the majority of shoppers will happily switch from one brand to another because of a special offer. Shoppers simply expect to be swayed by the latest BOGOF.
We recently did a survey asking shoppers to name a brand that they could honestly say they were loyal to and could not do without. The results were surprising. Beyond Apple and health and beauty products, there were very few brands that customers could not be swayed away from by a promotion.This is a problem.
Retailers simply cannot continue to price compete with their rivals and rely on their margins to be supported by manufacturers. Manufacturers could be a lot more creative with their ideas to maintain rsp and inspire the shopper. There is a solution, which leads us to our second hard question: ‘how can the retailers and manufacturers create a more inspiring shopping experience?’
We have to be realistic - we need price promotions - they are a necessary part of the equation, but perhaps not ALL the time. The trade spend should not just be spent on buying shelf space, but rather put against strong, innovative ideas that will inspire the customer to make the shopping experience enjoyable. Retailers could develop exclusive brands in partnership with manufacturers to overcome basket comparison squabbles and create truly innovative NPD.
The good news is that people love to shop, they like to be inspired and when they are they become loyal advocates. Waitrose and John Lewis have proven this. So, with the second hard question worked out, the solution is all about innovation, great design and teamwork to make the experience special and memorable. This in turn will make the retailer a destination and put the brands back on the shopping list.
Given the opportunity, which manufacturer would not be delighted to channel a part of their trade spend into a strategic and integrated creative approach that would influence both the shopper and the category and increase purchasing behaviour?
There will always be price promotions, but if retailers and manufactures begin to treat consumer’s time in stores as a below-the-line media opportunity, they can begin to inspire customers. Perhaps that will help drive ritualistic behaviour and put their brands back on shopping lists.