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
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
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
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: [email protected]
URL: 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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