“As the rising cost of transport begins to factor, consumers are likely to cut down on their ‘top-up' shopping trips and are less likely to succumb to impulse buying,” he says.
“Consumers, however, will probably show an increased weight of purchase during their ‘Planned Shop', looking to cover their monthly needs at the best price.”
Mawby notes that many consumers will also begin to ‘downgrade' on their repertoire of retail brands. “Consumers who might have typically popped into a convenience or a high-end brand store for a quick fix dinner, treat or special occasion purchase will now reconsider as the cost impact is felt.”
Eden Lanser, brand director of the consultancy Added Value, says that brands face more than just the till-affected challenge of tighter belts. “Consumers will be looking for alternatives to brands that they perceive to be expensive. Challenger brands have an increased opportunity to promote trial and value brands have the opportunity to cement loyalty.”
Brand value will come under scrutiny as people focus more on a brand's intrinsic value, rather than its perceived value. “Brands who don't deliver in this kind of environment are going to be hard pressed to hang on to their market share.”
Lanser points out that retailers might use this opportunity to hone their positioning. Pick n Pay's current cost cutting campaign as a good example of how a retailer has picked up the 'Consumer Champion' role, focussing their messaging on value and using heritage cues of well loved jingles from older campaigns to reinforce that they've helped consumers through tough times before.
FNB has also adapted its “how can we help you” messaging in response to leaner times, not only offering a new cap on bank charges, but also highlighting the upside of higher interest rates through savings account offers with higher earnings, capitalising on one of the ‘silver linings' available to consumers.
Lanser adds that FMCG brands might also need to be more critical of their portfolios, using the stress-test of a difficult market to wean weaker performers from their stable and streamline their offer.
Mawby predicts that most retailers will probably cut the bottom out of commodities and will also try to sell more bulk and multipacks. But both he and Lanser say there is a lot more retail brands can do to win shoppers, noting that leaner times are often ideal for building consumer loyalty:
Purely price driven value is harder to sustain in the long term and sets a precedent for the future. Rather, consider how to add value to the shopper experience. Think big and small; value packs as well as smaller versions of luxuries both help consumers feel like they are tightening their belts without sacrificing their little indulgences.
With consumers spending more time in store on more considered shops, there is an opportunity to really deliver brand value through the experience and service. Find ways to make the shopper's experience enjoyable through the brand. South Africans are good at finding humour in adversity, so there might be a gap to lighten up and entertain them. Eg. offer brands the opportunity to provide brand experiences in store, rather than the more standard in-store demos. Story layout can also play a huge role in up-weighting a value message to consumers and in driving cross category promotions.
