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Pick ‘n Pay in R110M major brand, product change and innovation

Nick Badminton, CEO, says “We're going to show Pick ‘n Pay in a new dress” and the “new dress”, even though it will not entail renaming the group, will entail the rebranding of 400 stores, the phasing in of more than 450 new or repackaged lines, and the employment of global and local experts to drive the whole exercise. The aim to ensure the brand is world class.
New logo
New logo
Old logo
Old logo
Changing its brand identity and introducing and repackaging a large number of product lines will cost in the region of R110 million, one of the largest such exercises in SA to date. Funding will be a combination of new investment and allocated refurbishment costs. Expenditure will be over two financial years.

One of the factors influencing the rebranding is the fact that over many years, as its house brands and associated brands have burgeoned, the brand Pick ‘n Pay has tended to almost become part of the background. The new exercise is aimed at putting the brand right back at the top.

The new visual identity will see the first 30 corporate stores – all flagship or high-volume stores – and 25 franchise stores being transformed before February 2008, with all stores in the group set to be completed during 2009.

Central to the rebranding is, of course, the new logo, which is quite different from the original, but retains key features that have made the brand distinctive in the retail environment.

Commitment to communication

Allied to the exercise is a substantial change in the way the group communicates to its customers. Already one of South Africa's most significant advertisers, Pick ‘n Pay will increase its spend on electronic media in a bid to enhance and consolidate its reach, and changing the way in which it communicates to consumers to increase and entrench differentiation. The company will also be launching a new customer magazine, Fresh Living, designed to talk directly to a broad cross-section of their customers. To promote general merchandise in its 18 hypermarkets, Pick ‘n Pay is also producing a new, regular, 64-page lifestyle catalogue with an initial print run of one million.

Pick ‘n Pay in R110M major brand, product change and innovation
In a move designed to strengthen its position in the LSM 8-10 market, the company would also be launching over 450 new and repackaged lines in its “Fresh” range. This includes over 300 ready-to-eat (convenience) meals, over 80 fresh produce lines, and more than 50 new meat products.

And organics have not been forgotten: following quickly on the “Fresh” range, will be a range of more than 50 organic products to complement its organics range, which in the last financial year grew some 60%. These products will all be launched under the Pick ‘n Pay brand, replacing the existing Choice and Foodhall brands. All these products will be phased into stores over the next six weeks. South Africa's biggest private label, No Name, would also undergo brand enhancement, but will retain its name.

Badminton says, “We have undertaken an extensive strategy realignment process over the past nine months, of which our brand was a key component. During this time, we have listened to nearly 4,000 customers in a large-scale research and consultation exercise.

“This process, together with a detailed assessment of our store performance, has resulted in a renewed focus on improving our customers' shopping experience at Pick ‘n Pay, particularly the quality and consistency of our fresh offer. This move is the first of many customers can expect to see over the coming 12-18 months.”

Huge task

Said Badminton: “In assessing our brand change, we needed to be mindful of the fact that we provide over 22,000 stock keeping units in our typical supermarkets and more than 40,000 in a hypermarket, while our stores cover a total of 1.4 million square metres, equivalent to more than 250 rugby fields. We also generate about 30 million till receipts a month,” adding that that means management is very aware of the scale of the task they face.

“Altogether, over the next two years, the new brand will be effected to 450 stores, 1,200 product lines, well over 40,000 uniforms and name badges and a range of other applications.” The new uniforms, for example, will two colours for the staff, and a different one for management.

Pick ‘n Pay in R110M major brand, product change and innovation
Consumer commitment will also receive a boost, with the company committing itself to some bold new promises to its customers. The first of these is that if there is more than one person in front of a customer in a queue, the store will always aim to open another until all tills are open. Toll free customer lines will be advertised in-store to aid delivery on this commitment.

Placing a premium on the value of the “fresh” in fresh food, the group is to also promise customers that if any customer finds any expired product on any shelf in store, he or she will receive a fresh one free.

Enhancing the strength of its senior management team, the company also confirmed that it had secured a number of highly experienced experts to join the company. Steve Hoban, currently Director of Global Procurement at the world's largest retailer, Walmart, will join early next year to bolster Pick ‘n Pay's trading team. Malcolm Green, who previously headed up distribution for a South African retail chain, will lead Pick ‘n Pay's supply chain, a key development area in the company. Cobus Barnard, also a retail specialist, will shortly join the company to further the company's convenience strategy.

These developments come two weeks after Pick ‘n Pay announced that it would convert 80 of Score stores to Pick ‘n Pay franchises; a move that will create 80 black entrepreneurs over the next three years.

Three months ago, the company opened its new distribution facility at Longmeadow in Johannesburg, the first major move away from its direct to store delivery model. Pick ‘n Pay is already seeing substantial improvements in the quality of its fresh produce through better quality control procedures.

Good, but can still be better, was the message

“Pick ‘n Pay has built its reputation on consumer sovereignty. We record over 350 million consumer transactions every year across 6,722 till points. That means 350 million times we engage directly with our customers and a lot of opportunity to make a difference.

Pick ‘n Pay in R110M major brand, product change and innovation
“While customers made it known that we were one of the most trusted brands in South Africa, the message was clear: we must set itself new standards if it is to remain a fresh, vibrant company, and South Africa's number one retailer. All of what we are doing addresses their demands very directly and it is appropriate then, that our new tagline is “Inspired by You”.

“The changes we're making are recognition that to remain on top in an increasingly competitive retail environment, we have to do what we already do well, but much better. In summary, we need to innovate constantly.”

“One thing that will not change, however, is what Pick ‘n Pay stands for. We have always taken the role of consumer champion and we will continue to do so, understanding that customer trust is our most critical asset.”

One of the new devices in the advertising material is a frame that focuses the attention and allows for flexibility in the design of individual advertisements; in some cases, the subject is confined within the frame, in others, it seems to burst out of it.

There is also a new emphasis in natural colour… fresh colour - so what you see is what you get. Yossi Schwartz, CEO of Y&R SA, said the greatest challenge in designing the new material was in taking 40 years of success by a much loved brand, and then combining all the components that now make up the Pick ‘n Pay group into one strategy.

“We also had to differentiate between each brand, and also differentiate Pick ‘n Pay from the competition,” he says.

Hence, a new range of material and a new strategy that puts Pick ‘n Pay, the brand, very much at the forefront.

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