Wednesday 29 May 2013

Welcome to the age of the bargain-hunting, time-poor consumer

The annual Grocery Retail Structure (GRS), compiled by William Reed Business Media and IGD is always a source of interesting insights, though we can’t be certain if it reflects consumer trends or anticipates them.

This year’s report reveals three key areas that should be of interest to brand marketers.

First, the seemingly unstoppable rise of convenience shopping. Our current fast paced lifestyle suggests that many of us are putting together our weekday meal options on the go, as we leave work, as we get out of the station and rush for those last minute pieces to our Tesco Express or Sainsbury’s Local. Although the GRS reports that the sector grew only slightly, much of this growth is accounted for by the multiples with the number of independent stores falling by 260 in the year. This reinforces the growing hold that the multiples have over our shopping destinations and why brands need to factor this in to their market planning.

Second, as many of the multiples continue to bring previously independent high street “staples” in-house, the number of independent off-licences, butchers, greengrocers and are all down. But, there are some anomalies. The report suggests that the success of the BBC's The Great British Bake Off could be behind a 4.4% increase in the number of bakers, whilst with provenance increasingly important, the number of farm shops has also increased. It should come as no surprise therefore that so many of the multiples are working overtime to promote the provenance of their fresh produce.

Third, many of the discounters have grown by double-digit percentages in the past year. The report cites B&M Bargains, Heron Foods, Aldi and Frozen Value as the biggest movers.

It may not be scientific, but what we get is a picture of a time-poor consumer, keen to keep costs down and shop for a bargain, but frequently without the time to do it. It certainly sounds as if it was written with me in mind. There is a dichotomy, of course, between the way we are embracing convenience, which carries an inevitable premium, and our drive towards discounters. Perhaps we are looking towards the latter for our bigger shops and convenience for the everyday essentials.

However, the same consumer wants to know the provenance of the fresh produce they are buying and, given the right vehicle, would be interested in supporting some independent retailers.

Given this steer, brands would be well advised to get closer to and better understand the behaviour of their customers because understanding customer behaviour is the greatest currency available to brands today. This means there is real potential for brands to benefit from an ethnographic approach to their research. Observing and discussing the ordinary activities of people in their naturally occurring settings can uncover more insightful information about what people do, rather than what they say they actually do; this might not sound much but the impact can be significant. It allows for a more personal and in-depth view of the participants, their behaviour and choices in order to provide valuable insights about how, why and when customers might choose brands or new products and the role that these will play within the consumer’s life.

Monday 20 May 2013

Ronald McDonald had a farm and he used it for brand advantage

At first glance, the decision by McDonald’s to open up some of the British and Irish farms that supply beef and eggs to its UK restaurants to selected consumers appears to be a clever, carefully crafted PR exercise to take advantage of the horsemeat debacle.

Except, of course, it’s not the first time McDonald’s has taken this step; it did so in 2010 as part of a PR campaign in the run up to the London Olympic Games. For this reason, it is too easy to merely dismiss the move as a PR stunt. As a brand McDonald’s has worked consistently to promote health and the provenance of its ingredients. If it is a PR stunt at least it appears to be one with substance; an effort by McDonald’s to walk the walk as well as talk the talk.

But there are some interesting elements to the move. For a company that is renowned for exercising close control over the way its brand is managed and perceived, allowing consumers to roam around farms suggests an apparent surrender of control even though the initiative is almost certainly being managed in a very controlled manner. But perhaps the balance is that it may contribute significantly to McDonald’s ability to modify perceptions of what fast food is all about. In this sense, by focusing on provenance McDonald’s has put itself in a space you might more likely expect to be occupied by a Waitrose or a Morrison’s.

It is not unreasonable, though, to believe that McDonald’s would only have taken this step if it felt it was commercially the right thing to do. Could it be that the ethical thing has now also become the commercially best thing to do? If that’s the case, this could represent something of a sea change for brands. Will it make us feel better about McDonald’s if we are users, or reappraise McDonald’s if we are not? And how do you measure that?

Understanding the impact on the target audience from this kind of campaign is important. If you don’t get insights from it that can be fed back into the business, you have to question whether the bulk of the value is being missed. Experiential marketing like this can, and should, go hand in glove with experiential research. By using the farms, McDonald’s is giving its consumers an experience of its business they wouldn’t otherwise have gained. They will be immersed in the brand and encouraged to re-evaluate the way they think about it, offering unique and fertile ground for researchers to till. Indeed, conducted effectively, research at this stage will enhance consumer engagement still further and produce a better level of insight than would otherwise be obtained from more classic research techniques. This adds depth to an initiative that might otherwise be dismissed as a stunt. It creates a “co-creative” attitude amongst all stakeholders – tell consumers what the issues are so that they can help address them. By using the farms, they have an unusual venue that will help create more theatre and experience. They could optimise the events by enabling direct interaction between client teams and consumers, which is great for client teams because they get to ask questions immediately, observe people up close and personal and also answer questions to move the process along; great for consumers because they feel valued and included and their curiosity about who is behind their favourite products is satisfied.

The company's confidence in its proposition is such that McDonald’s is going even further and giving its consumers a broader experience to secure more detailed insights. Why stop at the farm? It's quality scouts initiative is now leading it from field to box with a group of consumers observing the chain from the farm through production all the way to the restaurant