There will be no return to normal for grocery (or anything else)
Australia’s buying habits have been in such a shit state for the past three years that we invited a bunch of our clients to a slap up lunch late last year.
Tim Haymes from Haymes Paint is our wine expert and for those of you in the grip of the grape the 2012 Hutton Vale Riesling from the Eden Valley (around $20) and the Gomersal Barossa Shiraz (around $50) really had our clients (and ourselves) firing on all eight cylinders.
To cheer them up further we invited social researcher David Chalke from Australia Scan to tell them that maybe things would return to normal soon -after all, through Australia Scan David has his finger more firmly on the pulse of the nation than anyone else we know.
And he delivered some messages only made palatable by Tim’s selected wines.
Far from ‘returning to normal’, David advised, we should get used to ‘normal being what we have right now.’ Several people got up to leave at this point but fortunately the wine had them firmly in its grip.
According to Chalke, Australians currently have more cash than ever, but they’re saving not spending. The GFC has created a ‘return to prudence’ with more people haggling over price (pity the poor Merc salesman), having things repaired (cobblers rejoice), doing stuff themselves (pity the poor pool guy), giving up luxuries (pity the poor Merc salesman again), and even buying less-expensive foods (house brands rejoice).
You might think the post-GFC grocery shopping behavior of ‘always looking for specials’ and being ‘happy to consider private label alternatives’ receiving higher scores than ‘stay with one preferred, known brand’, would cause real concerns for grocery brands.
You might fear that this frugal behavior runs the risk of sending us into a ‘1984′ type scenario of a supermarket full of private label brands that commoditise everyday lives and make peoples’ pantries look like something from The Truman Show.
Don’t worry – brands still wield massive power. Almost three quarters of people believing brands are useful in helping them judge quality and value. They are the benchmark for every home brand and private label.
And according to Chalky’s take, almost 80% of people say that although they try to save money on day-to-day groceries, they always buy the best quality -no matter what!
But the judgment of today’s Aussie consumer is that big brands better live up to the promises they make. Otherwise, more of them than ever are happy to consider private label alternatives because more of them than ever are actively looking for ‘specials’.
If you’re a big global brand you pump the heck out of your advertising above, below and on the line and drive brand engagement – easy.
But if you don’t have megabucks to spend, it’s obviously a harder solve.
A couple of David’s key themes were to ‘mine the niches’ and ‘nurture your existing fans’. This takes a real shift in thinking for brands that, for the past few decades, have been about mass marketing. But it has to happen if they are to survive, because now the private label brands are becoming the mass marketers.
For me this comes down to delivering better value, not price, than the private label brand. Adding information, service or advice that assists customers in using your product. Refining the product to be less generic and cater more for specific needs or usage.
Like sugar did. Remember when it came as white as snow in big paper bags? No longer ‘white death’, sugar has evolved through careful innovation to consumer-friendly brown, raw, demerara, logicane, palm or coconut, date sugar, jaggery, muscovado, Barbados, organic, panela, pearl sugar, sulcanet, turbinado… and the list grows every day.
Have a look at the sexy packaging next time you’re lost in Coles or Woolies. Stop for a latté and fondle the café-style, infinite variety, one-teaspoon sugar sticks – the pariah has turned into a paragon!
Try evolving your product to be a bit more special – but still affordable for regular use – like Tim Tam did. Alcohol-based flavours like Kaluha, Tia Maria and Rum and Raisin make them sexier, yet still an everyday supermarket item.
Evolution is critical to your brand’s survival in this market.
Because things are not going to return to normal, as David quotes The Economist journo Domenic Cadbury: “The mistake people make is to assume things will return to normal. Normal is what we have right now.”
Chalky is a fabulous presenter and in complete control his audience, his material and the minds of the Aussie electorate. If you ever get a chance to hear him on his hind legs, don’t miss it. Our clients wouldn’t.