Never Knowingly Downloaded

The announcement by John Lewis that it has extended its range of services to customers, by launching its first own-branded broadband service, marks yet another stage in the delivery of multi-service retailing by the multiples. In one sense it is nothing new. The retail multiples have been diversifying into financial services, mobile phones and broadband for years and, indeed, this latest move broadens John Lewis Partnership’s existing range of services following the launch of John Lewis Insurance in 2010. It also takes over from the existing Waitrose and Greenbee broadband services whilst broadband has become a commodity purchase in its own right over the last two years, more in keeping with the supermarket shelf than anywhere else. But aside from selling us consumer electronics, most of which would have a wi-fi functionality, what track record or expertise does John Lewis Partnership have in the sector that would make us lean towards them as opposed to another, apparently more specialist provider? And does that matter anyway? The answer is all in the brand. The reputations of some of the pure broadband providers seem to have become tarnished by perceptions of being fly-by-night, offering higher downloads speeds than in reality they deliver, farming consumers out to distant call centres or providing questionable levels of customer service. Although the actual broadband may be being provided wholesale to the multiples via one of the mainstream providers anyway, there seems to be greater reassurance from buying our broadband from a reliable and trusted source. And they don’t come more trusted than John Lewis. In the UK Customer Satisfaction Awards 2011 John Lewis was named as Britain’s Most Trusted Organisation whilst also being voted Britain's favourite retailer for the 4th consecutive year. But herein could also lie a potential pitfall. Whilst the John Lewis brand is already fluid and inherently encapsulates service in its retail promise plus the financial services they offer, how will their service guarantee work when they are reliant on a third party delivering the broadband infrastructure? If they are not completely in control over what they are delivering to people and something were to go awry, would this match consumers’ existing expectations of a John Lewis service? And if it did, would this undermine perceptions of the John Lewis brand across its portfolio? They start from a strong position, though. Already they have consumer trust and the belief among their target base that they are not going to be ripped off by a John Lewis proposition. All they need to do is carry across their “Never Knowingly Undersold” price promise, make sure the speed is good, the customer service up to scratch and they could be onto a winner. One suspects if they didn’t think they could deliver that, they wouldn’t have taken the plunge in the first place.

Waste not, want not...convert waste food to an economic success story

In austerity Britain, where value ranges and price drops have become the norm on our supermarket shelves, everyone seems to be doing all that they can to make ends meet within constrained household budgets.

It was all the more surprising, therefore, to read on the BBC’s website recently that British households throw away 4.4 million tonnes of edible food a year.

According to figures published by the Department for Environment, Food and Rural Affairs almost a third of all bread purchased by UK households is dumped when it could be eaten; add to this around a quarter of all vegetables and potatoes, a fifth of all fruit and even 6.3% of all alcoholic drinks.

The Flour Advisory Bureau states that bread remains one of the UK’s favourite foods, with 99% of households buying bread and the equivalent of nearly 12 million loaves are sold each day. That’s 4.38 billion loaves of bread a year at a conservative average price of, say, 90p per loaf, that equates to £3.9 billion a year on bread. Using DEFRA’s figures, this means we are wasting approximately £1.3 billion a year in thrown-away bread. And that’s before you factor in any other products

It all sounds shocking, doesn’t it?

Even more so when you consider statistics released by food redistribution charity FareShare which reveal a sharp rise in demand on charities for food as people all over Britain struggle to put dinner on the table. 42% of charities surveyed reported an increase in demand for food in the past year as food prices soar and the recession bites, putting additional strain on families and people on low incomes.

So behind that stats lies the scope for a campaign for any socially responsible brand willing to take it on that could reduce our waste food mountain whilst at the same time help inject much needed impetus into the economy.

In a similar vein to Persil’s Dirt is Good campaign, who would launch a Waste for Britain campaign?

Sainsbury have recently encouraged people to freeze food rather than throw away; Pret does it Charity Run where it donates unsold produce to homeless shelters at the end of each day; Waitrose supports the “Love food, hate waste” campaign... But the figures suggest that there is plenty of room for other brands to get involved. Their campaigns could focus making consumers aware of the food they are wasting and how much this is costing them – creating new habits to reduce this whilst encouraging them to spend their money elsewhere on enjoyable things. Or providing some means by which people who have a surplus could donate or redirect it to those in greatest need, e.g. through charities like FoodShare.

And it could be bigger than food – we are a nation drowning in “stuff”, but also with a strong urge to give. TK Maxx’s current “Give up Clothes for Good” campaign with Cancer Research UK brings these two themes together – don’t hoard your stuff, don’t chuck it, donate it.

So come on brands of Britain, who will take this on?

Consumers follow the crowd...even to the petrol pump

In the last few days, we have been witness to an extraordinary phenomenon: the herd mentality of the British consumer.

We are at least seven days away from any potential industrial action by tanker drivers which could upset the availability of petrol and yet, following government advice to top up our tanks or hoard small supplies, we set off in our droves to forecourts this week demonstrating almost Blitz-like resolve. As a consequence, the independent retailers' group RMI Petrol reported that demand for petrol rose 172% on a single day, while diesel was up 77%. Halford’s similarly reported a staggering 500% rise in sales of jerry cans.

Some have suggested that the panic-buying is a direct result of the government ‘nudging’ people towards specific outcomes. Perhaps, it has been said, the government needed this to happen for political reasons, as a distraction from the economy, the cash for dinner scandal, to back Labour into a corner over union funding or even to generate a short term petrol duty bonanza to offset the prospect of a double dip recession.

But that would be to suggest that the response has been unusual for British consumers. And that’s plainly not true. British consumers have been in thrall to the ‘Delia Effect’ for the last few years. In 2009 her Christmas television series sparked a rush for cinnamon sticks, Marsala wine and other more obscure ingredients for her chestnut cupcakes. Sainsbury's reported sales of cinnamon sticks up 200 per cent on the same time the previous year, while Marsala wine - an ingredient in Delia's panettone trifle - was up 300 per cent. Sales of pickled walnuts, which Delia teamed with braised venison, doubled.

Delia had a similar impact in 2011 when Waitrose boxed up all of the ingredients you needed to make her traditional Christmas cake. The supermarket even suggested that they expected to see neighbours and friends competing over the most creatively decorated cake.

And it’s not only food. Earlier this year Amazon reported sales of telescopes were up 491% in the three hours after the transmission of BBC2's Stargazing Live, presented by Professor Brian Cox.

Whether it is rushing to fill up your car when there is no shortage of petrol, or racing to get the last cinnamon stick for a cup cake recipe, some would say this is irrational consumer behaviour. But then the advent of behavioural economics has shown that, whilst many marketing strategies are based on the notion that consumers make rational purchasing decisions, study after study have shown that this is not the case.

Simply defining your target audience through conventional and established techniques is no longer enough. Now, marketers must understand a potential customer's likely behaviour. Behavioural economics shoots holes in this by demonstrating how our behaviour is, to a large extent, unconscious, irrational and socially driven. However, whilst we may be dealing with the irrational it can also be predictable.

And one of the key findings of behavioural economics is that we are heavily influenced by other people. We tend to observe and copy what others do and, generally, like conforming. When sponsoring someone the amount you give will be heavily influenced by what other people have already put down. So, if everyone else is making Delia’s cake or looking for Brian’s planets, we don’t want to be out of the loop. And with that, I’m off to fill up the car.

Time for brands to get sweet on diabetics

There’s something of a diabetic epidemic taking place in the UK at the moment. The number of people diagnosed with the disease has risen by nearly 130,000 in the past year to 2.9 million, according to Diabetes UK, and there are now 50% more Britons with diabetes than when GP data on the disease was first published in 2005. The rise is mainly due to a surge in type-2 diabetes, which accounts for 90% of all cases.

Symptoms of diabetes include frequent urination, especially at night, increased thirst, extreme tiredness, unexplained weight loss, slow healing of cuts and wounds, and blurred vision. Left uncontrolled it can take between 10 and 15 years off of a person’s life expectancy.

Often the first reaction on being told you have the disease is that cutting out chocolates and biscuits and then the occasional walk or jog round the block should have the condition licked. But it’s more complicated than that, and this is where brands are missing out both on a potential new revenue stream and a valuable piece of cause related marketing.

Managing diabetes isn’t only about the refined sugar – the chocolates, biscuits and cakes. It’s about managing all sugar. That means taking care when you’re eating fruit, only eating certain fruits, avoiding most processed or ready meals and giving a wide berth to most if not all carbohydrates. White bread, pasta, potatoes, rice all turn to sugar almost as soon as they’ve been consumed. At the moment, a diabetic diet pretty much requires you to start every meal from scratch. And herein lies the opportunity.

When you next stroll around your nearest supermarket, you’ll find next to nothing available to cater for the diabetic market. There may be the odd product – though you’ll have to have the powers of a super detective to find them – but nothing that screams out “we know diabetes is a growing problem and we’re here to cash in on it.” There are plenty of products that proclaim themselves as “low fat”, though these are often high in sugar, and products which are perceived as healthy may be too high in sugar because of the inclusion of dried fruits and the like.

Contrast this, for example, with gluten. Most of the major supermarkets now have a dedicated area for products free from gluten, yet coeliac’s disease, which requires a gluten-free diet, accounts for only 150,000 people in the UK, just 5% of the people who suffer from diabetes.

And don’t restrict your thinking to just the diabetics. The change in diet required can impact on the whole family, which means although as a brand your “universe” of diabetics may be 3 million, in reality by factoring in family eating habits, it could be as much as 12 million, not far short of one fifth of the population, let alone the health conscious non-diabetics, who may just gravitate towards sugar-free products anyway.

Brands that operate across the food spectrum from yoghurt to breakfast cereals, from confectionary to cakes and biscuits all have an opportunity to open up new revenue streams by developing a range of genuinely sugar-free products. This would extend the reach of established brands, open the brands back up to people who otherwise would not be able to buy them and by linking the products with a synergistic charity like Diabetes UK the brand could tap into the established principle that consumers are more pre-disposed to ethical, socially responsible brands.

All this AND Britain’s three million diabetics could have a biscuit with their coffee again. Who could ask for anything more?

Does my bum look big on Facebook?

It’s not a ground-breaking statement to say that the Internet is continuing its advance into most areas of our lives, but the extent to which brands are using online to engage with consumers – almost at the expense of bricks and mortar – appears to be gathering pace.

In the last few weeks chocolatier Thorntons has announced it is to use its website as a “testing ground” for the introduction of new products across the business this Autumn, whilst Shop Direct is unveiling a virtual changing room so that customers can “try on clothes” online. And they are not the first. Tesco has a new virtual fitting-room, which it has launched for women only on Facebook for a two-month trial, sounds like a great idea. You upload a couple of photographs to create a 3D version of yourself and try on items from the supermarket’s F&F clothing range.

But is this move really going to satisfy the consumer’s emotional needs to engage with a brand or a product? Surely, when you start to take away the experience, which for many consumers has always been a part of the whole purchase activity, even an idea which in research looks good will fall over. Last year Polo Ralph Lauren had a touch screen in the window of its high street shops, which you could use to pick the item, size etc and order it through the window whilst window shopping. Despite positive research findings the actual usage was minimal; it was a good idea, but come the crunch, behaviourally, people like the touch and feel as well as the look of trying on clothes and of course in premium brand stores you get well informed and attentive staff. For others it is a social event in itself as well.

There are people, though, for whom clothes shopping is one of their least favourite activities. For them, the online experience is something of a godsend. With Marks & Spencer running videos of walking and moving in each item of clothing on the site, can get a feel for the way the clothing looks on a real person and which can aid decision making without the hassle of the high street or the shopping mall. Moreover, reviews online from other shoppers – good and bad – provide a guide to purchasing that you just wouldn’t get if you wandered around in-store. For these shoppers, where it is being done well, the online experience helps consumers make good rather than poor purchasing decisions.

The web is clearly more cost and time effective than doing everything manually. But at the moment, convenience is ruling the day. Flip the coin, if you will, to the brand or the retailer’s perspective, and you can see how online could give you access to a growing, almost global customer base that you simply would not be able to access from a small store or stores. Who knows, perhaps in ten years’ time, we will be talking about a new concept called ‘offline stores’ where you can actually go and touch and try on the clothes in dedicated retail outlets, rather than having to get them online. There is a fine line behaviourally to online transition; how far can it go before ‘enough is enough’ and customers push back?

The answer at the moment is that brands and retailers probably have to do both really well to cater for all consumer mindsets, considering those shopping online are either less concerned, or have already been in-store and made up their minds. But, whilst there is clearly a place for a very integrated online shopping experience, for some categories the experience counts for just as much. Buying some weekly food shopping or a DVD, going online is almost a given. Buying yourself a new suit, would you really want to put your trust in an online cartoon avatar, or does Mr Smith who has been in the business for 40 years count for so much more?

Brands that get it right by “doing it for charity”

If ever there was such a thing as a win-win situation surely it is the advent of cause-related marketing; the notion of buying a product or service whilst making a donation to a charity at the same time. It is something that has not only become a staple of the set piece charity events of the year – Sport Relief, Comic Relief and Children In Need – but is increasingly finding its way into the mainstream marketing activity of many brands.
And it should come as no surprise why. The Pink Ribbon Foundation quotes a study of 2,000 people, which revealed that 81% would be more likely to buy a product that was linked with a cause and 85% said that they would also have a more positive image of a company that was linked with a cause. Two thirds said they thought more companies should be linked with a cause, whilst eight out of ten consumers said that if price and quality were equal, supporting a cause made a difference to them.
The upshot of this is that consumers seem to be looking for more from the brands with which they engage. The latest to do this is Fairshare Music (www.fairsharemusic.com) which enables you to download the music of your choice and half of the profits from the download will be given to your choice of one of 18 charity partners, which stretch broadly across a wide range of organizations and causes. They are not alone. DKNY, which gets the vanilla for its fragrances from Uganda, supports the work of CARE with vanilla bean farmers in the country (www.dknyfragrances.co.uk/pure/charity.php) whilst running equipment retailer Sweatshop is throwing its weight behind the Microloan Foundation, to provide training and loans to women in Africa to help lift them out of poverty.
In an article in the FT some time ago Tim Harford explained that there were broadly two types of giver: those who donate out of pure altruism and those who give to get the “warm glow” from having donated to charity. Harford explained that these weren’t necessarily two sides of the same coin. Warm-glow givers, he wrote, don’t think too much about whether the money they give is going to be effective whereas the altruist needs to know their donation is going to be effective. “While the altruist would want the evidence, the warm-glow giver just wants to feel the connection”, he said. The third motivation, Harford identified, was social pressure: the act of giving because we think that’s what others expect of us.
In terms of the way brands and consumers act from a cause-related marketing standpoint in an economic downturn, this distinction can be critical. There is an increase in people donating their time rather than their money as a way of making a contribution, though altruists and warm glow givers alike may be more tempted by the brand charity link. Altruists might give more in a recession because they can see the poor getting poorer and will see that more could be achieved with their donation. Those who seek the rosy glow, however, but are themselves under pressure may well metaphorically rather hide behind the sofa than be pressured into donating beyond their means. And that’s why the link between brands and causes can be so effective, because the choice is entirely in the hands of the consumer without pressure from external sources
In balancing the need to create value for consumers whilst at the same time offering an outlet for our ethical and charitable needs at a time when money is tight, some brands may just have created a win-win giving model for the recession.

www.engage-research.com

The "his & hers" ad campaign is upon us

Fast food chain KFC has announced its intention to roll out its first 'his and hers' TV advertising campaign to support the release of its 'healthy' non-fried BBQ Rancher burger. But is it really important for brands to target men and women separately to achieve coverage or can marketing to both sexes be less gender specific?

KFC is not an obvious candidate for gender bending, so will assume that this is a straightforward male vs female perspective on the same proposition. Makes sense given the wealth of evidence suggesting that men and women are, in fact, different and might have a different perspective on food. Contrast this with the approach of Lynx who, launching their female range, have chosen to stress the shared territory of youthful sexual attraction for their “Unleash the Chaos” TV ad.

This all introduces a really interesting and conceptually simple way of targeting. For example, many grocery brands are now bought by men rather than just “housewives”, but I wonder whether advertising has really kept up with this in anything other than token ways. Yes advertising might focus on a gender-less product truth or human insight that the brand addresses, but developing comms which address only a predominantly female or male or mono-gender audience must be a compromise.

However, given that KFC is embarking on two separate advertising campaigns, what happens if I as a bloke watching "women's TV" I see the women's version first and vice versa? Might this give me the impression that I believe the product is aimed at women, which influences my behaviour towards the product moving forward. 

This in turn could affect potential reach. One of my colleagues did some exploratory work on this for a beer brand in the US where they would shift advertising around states. Normally they would assume reach is a combination of spend versus ability to find a target population. Given the chances of a woman and a man seeing a single advertisement are about the same, a brand would have to spend twice as much (or something similar) to achieve the same level of reach as a traditional, more generic ad, although the impact you would expect would be greater as the ad is targeted. The big question is whether the impact advantage outweighs the extra cost of advertising to reach your total target.

Which brands would be ripe for this double-gender approach? First of all let’s re-imagine classically but perhaps mistakenly gendered categories and see what we can do with those – “male” categories like cars, technology, finance and “female” categories like food, laundry and household cleaning. Would a more overt and genuine addressing of the female perspective on cars break the stranglehold of the “metal porn” and twisty mountain road formula? And would an authentically male perspective on household cleaning do better than resort to tired stereotypes of modern “life juggling” but still caring housewifery? Or is this an old fashioned stereotype of what advertising is like?

So things have changed somewhat since the 70s, but actually a lot of the modern gender-neutral advertising seems to ignore the gender angle on brands and products. Lots of products that are used in different ways by men and women (mobile phones for example) often feature non-gendered people of generally trendy man-woman appearance/persuasion communicating and connecting...but in identical ways.

Perhaps we should call for a refreshingly adult approach to gender, as KFC seems to be adopting. Whether because of nature or nurture, men and women ARE different, whilst they increasingly use and buy the same products and brands, they use those products differently, they respond to those brands differently, they respond to emotional and rational messages differently, they like and engage with different styles of media, advertising, content. And so maybe the age of the “his and hers” ad is upon us.