Is three a crowd in the home improvement market?

Two-thirds of the Australian population buying something every year from home-improvement market leader Bunnings, and the introduction of Woolworths-owned Masters Home Improvement has apparently done little to eat into the market share of rival chains.

But the new kid on the home improvement superstore block is slowly growing in popularity  with the latest figures from Roy Morgan Research indicating that Masters has been increasing its customer base consistently over the last year, with 8% of Australians aged 14 or over having bought something there, which is up 3% from a year ago.

The affects of the new store aren’t being felt too deeply by main competitor Bunnings, with consumers paying an average of seven visits to the store per year, compared to just three by Masters shoppers.

Fellow competitor Mitre 10 hasn’t seen much change over the last year,  with 17% of the population buying something there each year and averaging five trips to the store annually.

Industry communications director at Roy Morgan Research, Norman Morris, says on the research results, “Since opening nearly two years ago, Masters has almost 30 stores and is now trading in most Australian states. Its association with the reality TV program House Rules would also be boosting its profile. However, its lack of impact on customers at Bunnings and Mitre 10 suggests shoppers have added Masters to their retail repertoire rather than stopped shopping at its competitors.

“With the increased level of competition in the hardware field, it’s no longer just about wheelbarrows, nails and power tools. Masters is appealing to customers who want to change or improve their home décor as well, with a large range of decorating products on offer and even a section dedicated to ‘Ideas & Inspiration’ on their website,” he says.

 

You beauty, Woolworths is getting a makeover

Woolworths has unveiled a new beauty retail format to be situated at Woolworths Town Hall supermarket in Sydney’s CBD.

Claiming to be a first for Australian supermarkets, Woolworths Beauty will feature beauty bars with dedicated beauty consultants offering treatments, tips, advice and samples, as well as LED screens and beauty TV to create an integrated and experiential consumer destination.

“We wanted the design to be much like a destination, creating not only an enjoyable physical experience with beautiful products to match, but one that informs shoppers,” says Jaid Hulsbosch, director at Hulsbosch, the communications firm that designed the format.

Woolworths Beauty

 

A strategic departure from the grocery sector’s more traditional model of hair and beauty, this move looks to “respect not only Woolworths as a brand – its values, personality and proposition – but the consumer experience,” adds Hulsbosch.

Woolworths enters the premium beauty market on the back of encouragement from the trend in Asia Pacific that is forecast to generate an extra US$5 billion worth of premium sales by 2016.

A departure from the norm for supermarkets, Hulsbosch believes the interactivity, and ability to engage consumers through a “sense of drama”, will reinforce Woolworths as a leader in its category.

 

Woolworths’ ‘Happy Feaster’ outdoor ads are on the nose

Woolworths has launched its Easter lead-up outdoor ads with a unique twist: they emit the odour of hot cross buns.

With a series of hot cross bun-scented displays on show as part of Woolworths’ ‘Happy Feaster’ campaign, the aroma of freshly-baked Easter treats is wafting from the ad unit courtesy of a ‘push-to-smell’ mechanism devised by JC Decaux.

The campaign comes on the back of 2012′s Woolworths/Reed Pacific/News Limited scented full page advertisements in the mX Sydney newspaper, including a scented strawberries and cream flavour ad.

Another Woolworths ad that featured in mX late last year also carried a Christmas cake scent, so it’s clear that Woolworths is keen to pursue this line of customer attraction and drive them in-store.

“Everyone loves the smell of hot cross buns, so it’s a real treat to bring the aroma to life for Woolworths’ Happy Feaster campaign,” says Doug McNamee, marketing manager at Reed Pacific.

 

Shop A Docket moves to monthly schedule boosting timeliness

Shop A Docket will switch its metro advertising media schedule from a six-week cycle to monthly distributions in the hope of giving consumers greater access to a wide range of offers. The shift in timings will also allow advertisers to vary their offers more frequently.

National sales manager of Shop A Docket, Tim Wingrove, explains the current six-week cycle for advertising in metropolitan regions has “outlasted its use-by-date”, been “complicated and confusing for advertisers and consumers”, and failed to “match up with standard industry advertising practices”.

The first monthly offers will be introduced to Coles, Woolworths, Big W, Target, Kmart, Bi-Lo, IGA stores and online on 1 April.

“This is one of the most significant changes in Shop A Docket’s 25-year history,” says Wingrove. “Logistically it means an additional three print runs a year, and the added transportation and delivery of thousands of rolls to supermarkets and variety stores across the country.”

Benefits for advertisers include shorter lead time to market, the ability to change offers more frequently, and prepare advertising campaigns around seasonal aspects of their business. Yet according to Wingrove, those who will capitalise most will be consumers.

“The major winners will be consumers, who will start to see more offers on their shopping receipts and online, more often,” informs Wingrove.

With the current national offer count approaching the 3000 mark, and with Shop A Docket’s business model continually evolving, predominantly in regard to promoting advertisers through digital campaign, Wingrove embraces the changing of the guard.

“Our success has been built around the printed medium, but in the next few months we’ll be announcing some exciting changes to our online marketing initiatives that will really change the face of Shop A Docket,” he says.

 

 

Woolies tries ‘NewsScent Technology’ in scented cake ads

Woolworths has turned to scented ads to stimulate sales in the lead up to Christmas, using News Ltd’s ‘NewsScent Technology’.

The campaign involves two executions – one that carries the scent of strawberries and cream and another the scent of a Christmas cake – in a bid to stimulate the senses and get people shopping for the festive season.

The first execution ran in yesterday’s mX Sydney, as a full page ad of a strawberries and cream scented pavlova to link with a similarly scented wall at Sydney’s Town Hall.

The second will run mX Sydney’s annual Christmas issue on Wednesday, carrying a Christmas cake scent.

General manager of sales at News Australia Sales, Neil Robinson, says Woolworths worked closely with News’ production team and Reed Pacific Media to create the scents. “With Woolworths, we are showcasing another new dimension to advertising in print as well as a new multi-sensory experience for consumers, which can only aid impact and recall,” Robinson says.

Marketing manager at Reed Pacific Media (RPM), Doug McNamee, claims NewsScent will revolutionise the use of print media in Australia and add a dynamic element for advertisers. “RPM is extremely excited to have partnered with News and Woolworths to bring this to the market.”

Private label falters for first time in 5 years, erodes store loyalty

Private label supermarket brands have faltered for the first time in five years, with shoppers reverting back to branded goods putting private labels’ growth rate into decline.

The finding from Nielsen’s private label study show that while the majority of households buy private labels from Coles and Woolworths, its penetration dropped from 95.5% to 94.8% year on year for the July to September quarter.

The drop is believed to be due to the reduction in price of many branded goods as the price war in the supermarkets heats up, causing consumers to switch back from private labels to now-cheaper branded offers.

It’s been seen most markedly is the biscuit, canned fruit/ fruit snacks and cake/ pies and fresh pastries categories, which fell by 4.6%, 3.9% and 3.1% respectively, according to the researcher.

“There has been a closing of price gaps between branded and private label products recently which is being largely driven by retailer price wars,” Nielsen’s retail industry group executive director Kosta Conomos says.

The findings follow a report from IBISWorld in July which claimed private label sales had surged, particularly in some categories. However, a report from TNS earlier in the year warned of growing annoyance among consumers at Coles and Woolworths for pushing branded products off the shelves to make way for their own brands. Nielsen believes this backlash may also be a factor behind the decline.

The report also found years of battling for market share through private labels had also made Coles and Woolworths shoppers more price conscious and eroded loyalty to the stores themselves.

Consumers now see less price differentiation between Coles and Woolworths, according to the report, but instead viewed lower shelf prices, reward cards and private labels as a given.

“Shoppers are now seeing zero differentiation between pricing in Coles and Woolworths compared to three years ago when Woolworths was largely given credit for lower prices,” Conomos adds.

The proportion of consumers who shop between both Coles and Woolworths have risen to 88.1% in 2012, from 87.9% in 2011, Nielsen said.

 

Woolworths Ltd snares Tesco Lotus marketing guru for new group marketing role

Woolworths Limited has created a marketing directorship for the company, in what seems a clear indication of a coming group-level, aggressive marketing stance for the publicly-listed company, with Tesco Lotus CMO Kurt Kamp joining the company later this month.

The newly-created role will see Kamp head up marketing for Woolworths supermarkets, Big W, BWS, Dan Murphy’s, Masters Home Improvement and the company’s hotel and petrol station assets.

Kamp has previously held senior marketing roles with Pepsi, Hero and Danone, and most recently was CMO of Tesco Lotus, the Asian hypermarket chain based in Thailand.

Reporting to Woolworths Limited managing director and CEO, Grant O’Brien, Kamp will be more senior than group general manager of consumer and corporate marketing Luke Dunkerley, although it’s not yet know whether Dunkerley will report to Kamp or O’Brien.

 

Women drawn to Woolies, Amazon and lifestyle: Nielsen Online Ratings

In the lucrative digitally-active female segment, Woolworths and Amazon are the most visited retails sites, Disney Online and kidspot.com.au win out in the family and lifestyle category and taste.com.au is winning the battle of the food websites.

Nielsen’s Online Ratings found that the highly engaged 25-54 year old female group accounted for 30% of the total online population in June, 33% of the total audience for mass merchandiser retail sites and 45% of all page views on Big W, Amazon and Kmart sites.

An average member of the group, which accounts for around 4.6 million Australians, spent 89 hours online for the month, viewing more than 3000 web pages across 86 sessions. Shopping is one of their favourite activities; they access Australian retail sites most frequently and have a strong relationship with online auction sites, being 11% more likely than the general online population to use eBay.

The major discount department stores all feature in the group’s most visited retail sites along with DealsDirect.com.au, Westfield, Coles, JB Hi-Fi and MYER. The Iconic also featured as one of their most visited sites, giving the Sydney-based online fashion site the lead in the pure-play fashion category, with 308,000 unique visitors in June.

According to Nielsen, the vast majority of women in this market segment regularly access major Australian publisher sites, such as Google, Yahoo!7 and Facebook.

In the overall rankings, Google held on to its position as the most visited site, followed closely by Facebook which still dominates the field for time on site. NineMSN’s group of sites retained third spot, followed by YouTube, Microsoft and Yahoo!7.

Small declines in page views were recorded across the board due to one day less of tracking for June than in May, however unique audience sizes for many of the top ten most visited websites dipped slightly.

 

Study: In Woolworths and health and chocolate brands we trust

Dettol is Australiaʼs most trusted brand and Bunnings was named Australia’s most trusted icon in a study that found health and chocolate brands generate the greatest trust.

Brands that are perceived as good for our health, like Band-Aid and Panadol, or that make us feel better, cue chocolate brands Cadbury and Lindt, dominated the top 10 of Readerʼs Digest’s Most Trusted Brands 2012 study.

Breakfast food brands Uncle Toby’s and Kellogg’s, oral hygiene market leader Colgate and health brands Betadine and Elastoplast also featured in the top 10.

“In uncertain times, itʼs the brands which continue to offer quality and substance that hold our trust,” notes Australian Readerʼs Digest editor, Sue Carney. “They have a long history of being steadfast and safe, which makes them a hot property in modern day Australia.”

Readerʼs Digest’s study, conducted by Catalyst Research among a nationally representative sample of more than 2400 Australians, also broke down trust in brands across a range of fast-moving consumer goods and other strongly brand driven categories.

Bunnings topped the ʻAustralian Iconʼ category, edging out Vegemite and Dick Smith, and also outperformed Big W and Target in the non-supermarket retail category. Woolworths came out on top of arch-nemesis Coles as the most trusted supermarket, while Sony edged out rivals Panasonic and Samsung as the most trusted TV and home entertainment brand.

The Commonwealth Bank emerged as the most trusted bank ahead of ING Direct and Bendigo Bank. Dove performed well across multiple categories, while Toyota topped car brands, Dyson was most trusted among vacuum cleaners, Pedigree was favoured for feeding pets and Breville took top honours in the kitchen.

The study was conducted in January 2012, with an initial qualitative phase conducted to develop a list of brands to prompt respondents and eliminate the tendency for brands that may be top of mind due to recent marketing pushes being favoured in the results.

 

SurfStitch, Woolies, Sneaking Duck dominate online retail awards

SurfStitch was the star of last night’s Online Retail Industry Awards (ORIAs) taking out Online Retailer of the Year as well as two other gongs in a night which also saw Woolworths and Sneaking Duck pick up multiple awards.

The online-only surfwear retailer also claimed Best Pureplay Retailer and Best Site Optimisation beating an array of big name competitors including The Iconic and CatchOfTheDay in the Pureplay category, and Appliances Online and brandsExclusive in the Site Optimisation category.

Woolworths won for Best Online Retail Marketing Initiative and Best Multichannnel Retailer, in a night where mobile commerce was emphasised for its crucial role in today’s retail model.

Chair of the judging panel, Forrester Research’s Steven Noble, said mobile was never far from the minds of the panel, regardless of the category that was being judged. “When we were judging whether a site was usable, then that included judging whether it was usable on mobile devices,” Noble told attendees at the awards dinner. “If we were judging whether a retailer was innovative, then that included judging whether they were innovating around mobile. If Australian online retailers want to succeed in 2013 and beyond, then it should never be far from their minds too.”

Sneaking Duck, an online-only eyewear retailer from the founders of Shoes of Prey, was the other player to pick up multiple gongs on the night, winning for Most Innovative Online Retailer and Best Customer Experience. It was a successful night for co-founder of the businesses Michael Fox who picked up Best Use of Technology for Shoes of Prey as well as the Industry Recognition Award for his thought leadership in the space and lobbying of government to reform the local payment processing and postal industries.

Best New Online Retailer was awarded to pure-play online fashion house The Iconic, who beat out Harvey Norman’s foray into online, CatchOfTheDay Group’s wine site Vinomofo, Sneaking Duck, The Men’s Shop and Ozmattress.

The awards dinner capped off this week’s Online Retailer Conference & eCommerce Expo, which also took a heavy focus on mobile as research revealed 55% of retailers now use m-commerce and 49% said that mobile sites were a top investment priority for the year ahead.

Online fashion retailer brandsExclusive was deemed the best example of mobile in action, winning the Best Mobile Commerce award. The full list of winners includes:

Best Pureplay Retailer – SurfStitch

Best Multichannel Retailer – Woolworths

Best New Online Retailer – The Iconic

Best Use of Technology – Shoes of Prey

Most Innovative Online Retailer – Sneaking Duck

Best Online Retail Marketing Initiative – Woolworths

Best Customer Experience – Sneaking Duck

Best Aggregation Channel – GetPrice

Best Site Optimisation and Design – SurfStitch

Best Mobile Commerce – brandsExclusive

Online Retailer of the Year – SurfStitch

Industry Recognition Award – Michael Fox, Shoes of Prey

 

Private label surges again, claims two thirds of some categories

Private label products continue to surge, hitting a quarter of supermarket sales for the first time, but in some categories its share is as high as two thirds of the market according to IBISWorld.

Butter, sugar, bread and milk ranked as the most dominant for private label, with supermarket-owned products commanding 68%, 67%, 56% and 55% of sales in these categories respectively. And according to IBISWorld’s forecasts, the dominance of the usually cheaper alternative is set to grow to 30% of overall supermarket sales within the next five years.

IBISWorld General Manager the researcher’s Australian operation, Karen Dobie, says the private label march continues to be driven by cost of living concerns, and with the introduction of the carbon tax, more Australians are expected to turn to away from brands.

“In 2007-08, private label accounted for just 13.5% of total supermarket sales meaning the segment has grown by more than 85% over the past five years”, Dobie says.

In dollar terms, Australians are expected to spend $85.9 billion on groceries in 2012-13, with IBISWorld tipping $21.6 billion of this will be spent on private-label products, up from $19.7 billion in 2011-12 and $9.96 billion five years ago.

Looking forward, this figure is expected hit $31.8 billion by 2017-18, representing growth of nearly 50% between then and now.

Private label’s growth is influenced by the strength of supplier brands and the nature of product differentiation within categories, Dobie adds. “Dry grocery items and chilled packaged food categories have been the strongest performers for private-label products – although alcohol has also been a strong contender for Woolworths and Coles.”

However, private label isn’t having it all its own way in every category. Branded products have staged a fight back in egg sales with private-label declining from 61% to 53% of market share in the past ten years as free-range products gain popularity. Chocolate, confectionery, soft drinks, cosmetics and sanitary products remained strongholds for branded offers, with consumers opting for trusted, quality brands when purchasing these products.

While private label is most popular with Australia’s low-income families (those earning less than $44,000 per annum), accounting for over 40% of their total grocery bill, families in higher income brackets (those earning above $75,000 per annum) have been turning in increasing numbers. Private label currently accounts for about 15% of groceries among this income bracket.

Growth in premium private-label products is also expected to impact on the market, blurring the line between home brands and branded products and leading to more aggressive competition across the grocery industry.