Experts in translating shopper insights into growth strategies.

How to reach and engage

shoppers in Township stores

TOPIC

• How to relate to lifestyle realities of the target LSM groupings?

• How important is brand loyalty?

• How do we engage them?

• Promotions and activations most likely to succeed?

INPERSPECTIVE INSIGHTS CONSULTANCY

We are Shopper Marketing experts, translating insights

into Shopper Marketing strategies that deliver platforms

for sustainable growth.

We enable you to connect with your shopper and

influence their buying behaviour to drive bigger, more

profitable baskets.

We measure activation effectiveness in order to optimise

ROI.

We make a fundamental difference to our client‟s

commercial success.

Our expertise is built from local and global experience in

delivering „best in class‟ Shopper Marketing Strategies.

Our innovative suite of tools sets us apart from the rest.

We are the leading Shopper Marketing Insights

Consultancy in South Africa.

SHOPPER DIARY

Inperspective’s syndicated

shopper survey designed to develop

Shopper Strategies differentiated by

Customer & Channel

1. Putting Shoppers In Perspective.mov

Who are our target shoppers in Townships?

Some of the biggest mistakes we make is that we lump Township consumers

together and assume they have lower levels of affluence and are of the same

mind-set

More than ¼ of Township shoppers are LSM A!

29% 32%

44% 43%

27% 25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Market Size Spend Contribution

LSM 3 to 4 LSM 5 to 7 LSM 8 to 10

9% 9%

38% 38%

44% 46%

9% 8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Market Size Spend Contribution

20 – 24 25 – 34 35 – 49 50 – 60

LSM Profile Age Profile

Informal Stores in Townships: Demographic Profiles

The challenge facing Township Retailers is how to cater for the diverse profile of shoppers

in their catchment area

Our shopper profiles highlight these differences

Contented Copers Sunny Strivers Stylish Selectors

STYLISH SELECTOR.movCONTENTED COPER.movSUNNY STRIVER.mov

Where are they shopping?

What are the implications for Township Retailers?

50%

4%

5%

26%

67%

3%

6%

8%

0% 20% 40% 60% 80% 100%

2012

Over the past few years we have seen significant declines in terms of share of

spend in informal stores (General Dealers, Spazas etc). Shoppers are choosing

to shop elsewhere because of the range, price and shopping experience

50%

2%

5%

33%

63%

1%

5%

19%

MAJORS

FORECOURTS

PHARMACY / HEALTH

INFORMAL MARKET

0%20%40%60%80%100%

2008

Share of Trip

Share of Spend

CHAINS – 2012 (TOTAL GROCER, 4 WEEK PERIOD)

Other retailers are fulfilling more of their needs. As a result shoppers are spending

less in Informal Market stores (driven by lower average basket spends). The biggest

opportunity for Township Stores will be to increase basket size and spend

101.3

45.4

121.4

28.7

20%

-37% -40%

-20%

0%

20%

40%

60%

80%

R 0

R 20

R 40

R 60

R 80

R 100

R 120

R 140

MAJORS INFORMAL MARKET

2008 2012 % change

AVE BASKET SPEND (4 weeks)

Shoppers typically only buy 2-3 items in local Township stores (informal trade)

and typically go there for bread & airtime.

BASKET PROFILE: INFORMAL TRADE 2012

48%

18%

13%

11%

10%

4%

3%

3%

3%

2%

2%

2%

2%

2%

2%

1%

1%

1%

1%

1%

1%

0% 20% 40% 60% 80% 100%

BREAD & ROLLS

CELL AIR TIME

MILK

FRESH FRUIT & VEG

CSDS

CHIPS

EGGS

CONFECTIONERY

CIGARETTES

DAIRY BY PRODUCTS

MAIZE

SUGAR

POULTRY

NEWSPAPERS

SEASONINGS

CAN VEGETABLE

TAKEAWAY FOOD

LONG LIFE MILK

CAN FISH

WASHING POWDER

VALUE ADDED MEATS

LSM 5-7 continue to shop at Informal Market stores but when they shop there, they

spend less. One of the biggest shifts is that LSM 5-7 shoppers are now shopping in

premium stores. Nearly a ¼ of LSM 5-7 shoppers now shop in Woolworths.

HOUSEHOLD PENETRATION (4 weeks)

LSM 5-7

66.8%

34.6%

64.7%

52.7%

9.4%

23.0%

43.8%

93.6%

83.1%

33.8%

73.1%

64.2%

23.6%

33.2%

58.1%

91.3%

0% 25% 50% 75% 100%

SHOPRITE RETAIL

CHECKERS RETAIL

PnP RETAIL

SPAR RETAIL

WOOLWORTHS RETAIL

FORECOURTS

PHARMACY / HEALTH

INFORMAL MARKET

2008

2012

These shoppers are going to Woolworths to buy fresh produce and snacking /

treat items

32% 17%

16% 15% 14% 14% 14% 13%

9% 8%

7% 7% 7% 6% 5% 5% 5% 5%

4% 3% 3% 3% 3% 3% 2% 2% 2% 2% 2% 2%

0% 20% 40% 60% 80% 100%

FRESH FRUIT & VEG

CONFECTIONERY

CELL AIR TIME

FRUIT JUICES

RED MEAT

CSDS

BREAD & ROLLS

BAKERY TREATS

DAIRY BY PRODUCTS

MILK

GENERAL HOUSEHOLD ACCESSORIES

MINERAL /SPRING WATERS

POULTRY

CHIPS

CHEESE

SWEET BISCUITS

TAKEAWAY FOOD

VALUE ADDED MEATS

EGGS

PASTA

EDIBLE FATS

BAKERY UNSPECIFIED

SANDWICHES

NEWSPAPERS

LONG LIFE MILK

CORDIALS/SQUASHES/CONCENTRATES

ENERGY SPORTS

SAVOURY BISCUITS

ACCESSORIES

READY MEALS

BASKET PROFILE: WOOLWORTHS

(Black Shoppers LSM 3-7)

The experience in other retailers has raised shoppers’ expectations

Shoppers have become more discerning, they now have the power to choose

… Retailers are going to have to

focus on meeting shoppers

needs beyond availability…

How do we engage them?

We need to meet shoppers needs in order to get a larger share of their wallet

1. RANGE

2. PRICE & PROMO

3. POP COMMUNICATION

4. STORE ENVIRONMENT / LAYOUT

Getting the range right in Township stores is critical to driving traffic to the store

• Identify priority categories to extend depth of

range (e.g. snacking, cold beverages etc.)

• Range to include premium, value and economy

lines (but this will vary by category).

– Particularly in food lines, premium ranges

need to be culturally relevant.

• Limited range on household essentials

Brand loyalty is not what is used to be in Townships;

• Brands count… Shoppers are still very brand conscious but not necessarily brand loyal

• The extensive range is Majors has given Shoppers more to choose from

• While many shoppers want brand leaders in some categories, in others they have

discovered that value brands are „good enough‟

• When funds are limited, this enables shoppers to trade down and save so that they can

invest in categories and brands that they believe are worth paying more for

• We need to give shoppers a REASON to buy into our brands

(beyond the brand name)

While Brand experience is important, heritage will be less of a driver in future

• Brand Image continues to be important

(in many categories confidence is determined

by peer group choices rather than heritage)

• Shoppers will look for innovation that is relevant

to them.

– This is likely to be a threat to existing /

established brands who have taken brand

loyalty for granted in the past.

Consumers use heritage as a reference when they don‟t have a reason to buy into a

brand or understand the benefits (functionally or emotionally)…

…Therefore once they understand BRAND BENEFITS, heritage is no longer

enough…

Food for thought

• Township shoppers have traditionally been perceived as risk adverse and entrenched in

their behaviour

• BUT they have become quick adopters to change …

… if we handle this cleverly we can leverage this for our brands

We need to meet shoppers needs in order to get a larger share of their wallet

1. RANGE

2. PRICE & PROMO

3. POP COMMUNICATION

4. STORE ENVIRONMENT / LAYOUT

They know what things cost and will shop around to get good prices

13% 12%

21% 22%

11% 10%

53% 53%

0%

20%

40%

60%

80%

100%

Market Size Contribution to Spend

Economy Premiums Price Value

Grouped Shopper Segment Profile

Informal Stores Demographic Profiles

• Many shoppers are looking for value,

not just the cheapest.

• They actively look out for promotions

in order to get good value on trusted

brands.

Use promotional activity to drive conversion in-store

• Use promotions more effectively to encourage bigger baskets e.g. combo deals

• The Informal Trade should look to the success of Forecourts in the suburbs to

understand how to engage their shoppers more effectively

We need to meet shoppers needs in order to get a larger share of their wallet

1. RANGE

2. PRICE & PROMO

3. POP COMMUNICATION

4. STORE ENVIRONMENT / LAYOUT

Apart from ensuring availability of

the right range, we need

compelling POP communication

that talks to the needs of these

shoppers and gives them

a reason to buy

Brands that are relevant have a better chance of getting in the basket.

Understanding cultural nuances is fundamental to creating relevance.

• Some of the biggest marketing mistakes we make are that we use global insights and

communication to engage these shoppers …

• We need to be culturally relevant to consumers (particularly on food products, but also in

terms of how we communicate… humour can be very different across the globe…)

Doughnuts don’t appeal to British

consumers for breakfast

Snowmen are not relevant

to SA consumers

Buy your cough, colds and flu medicine here

What do retailers and manufacturers need to do to make their offer relevant to

these shoppers?

• Understand your shoppers needs

and why they use your category

• Use this understanding to

influence and change behaviour by

tapping into existing habits

Cultural relevance is key to conversion

Weetabix: „Teach a market to love your product‟

It is important to understand local culture in different markets!

UK marketing: “In the UK, our Fuel for a Big Day campaign is based on an

insight. It is based on an emotional positioning and it‟s talking about how it

can help families through a busy day.”

In less developed markets, the message is more functional. “We will have

to talk more about the benefits of what the brand does - whole grain,

energy, low fat, low sugar, high fibre,” says Giles Turrell, CEO

Use Township Stores to leverage the cultural experience

• Leverage community based programs.

• Grown by this community: Range of culturally relevant fresh produce (mdumbis).

Mobile will be an important medium to target Township consumers & shoppers

• Carling Black Label used mobile voting to allow supporters to select the team and make live

substitutions in a huge South African soccer game. “Be the Coach” picked up Best mobile advertising

and marketing campaign at the GSMA Global Mobile Awards 2012

• Carling Black Label understands that men are passionate about soccer, and that every fan believes

his sporting expertise, shouted from couches and the stands, goes unheard to the detriment of the

game

http://mobithinking.com/mobile-awards/gsma-global-mobile-awards

We need to meet shoppers needs in order to get a larger share of their wallet

1. RANGE

2. PRICE & PROMO

3. POP COMMUNICATION

4. STORE ENVIRONMENT / LAYOUT

The introduction of Majors into Townships has raised the bar. With the

increased footprint of many retailers Shoppers now have the power to choose

– Cleaner and neater

– More upmarket

– Enjoyable and engaging

Township stores can become the face of the brand. In these smaller

environments, shoppers are more likely to notice brand communication and will

take the time to read it

What could a Township Store of the Future look like?

• More upmarket & trendy

• Place to connect (fundamental to culture)

• Value add services to drive traffic e.g. Free WIFi

=

• Hybrid Coffee shop / news agent / Convenience / Forecourt store

IN SUMMARY ENGAGE TOWNSHIP SHOPPERS THROUGH

• PRICE & PROMO

– Competitive pricing on a limited number of key essentials

– More promotions, designed to drive up basket size and spend e.g. combo deals

• RANGE

– Deliver on freshness (beyond fresh produce)

– Depth of range (more sku‟s)

• POP COMMUNICATION

– Be culturally relevant

– Give them a reason to buy

• STORE ENVIRONMENT / LAYOUT

– More upmarket

– Social

– Enjoyable and engaging

End

Thank You

Address: Unit 45 Thembi Place, Calderwood Road, Lonehill

Inperspective Research Consultancy

P.O. Box 2351, Sunninghill, 2157

Tel: 011 467 0012

Fax: 011 467 8536

Email: jacqui@inperspective.co.za

URL: www.inperspective.co.za

mailto:jacqui@inperspective.co.zahttp://www.inperspective.co.za

We are Shopper Marketing experts, translating insights

into Shopper Marketing strategies that deliver platforms for

sustainable growth.

We enable you to connect with your shopper and influence

their buying behaviour to drive bigger, more profitable baskets.

We measure activation effectiveness in order to optimise ROI.

We make a fundamental difference to our client‟s

commercial success.

Our expertise is built from local and global experience in

delivering „best in class‟ Shopper Marketing Strategies.

Our innovative suite of tools sets us apart from the rest.

We are the leading Shopper Marketing Insights Consultancy

in South Africa.

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