The Nielsen Global Liquor Symposium and Global Wine Forum

Last week, the Liquor Merchants Association of Australia (LMAA) in association with Nielsen presented the inaugural Nielsen Global Liquor Symposium and Global Wine Forum at Doltone House in Pyrmont, Sydney.

With key liquor industry representatives from Australia, New Zealand, the UK and America, it was a great opportunity for Shopaholic to gain some valuable market intelligence about the current state of play and emerging trends in the liquor industry.

Highlighted are a few key points worth pondering for any liquor marketer.

Consumer spending habits
“While alcohol beverages are sometimes thought to be ‘recession proof’, we’re seeing significant evidence of changes in consumers’ dining and buying habits,” said Danny Brager, Nielsen Beverage Alcohol Team US. As a marketer, we need to understand those changes.

Job security is still a concern looming over most consumers’ heads, and they are changing their purchasing behaviour accordingly. 30% of those surveyed by Nielsen claimed to have cut down on purchases of alcohol, and almost half have cut back on nights out. This trend was visible across all four markets represented at the Symposium.

Why then do Australian consumers continue to ‘trade up’? BarScan data indicates that the average price per serve has grown in the last year across all categories. Off premise also experienced much stronger growth in the categories of premium spirits, RTDs and beers than in their standard counterparts.

Perhaps more important than price to a shopper, is perceived value. With alcohol there is a degree of status consumption involved, and so shoppers are more open to paying a premium for something they perceive to completely meet their needs. With the strong shift to off premise, retail media has never been better placed to influence shoppers at the point of sale.

Promotional reliance
Overseas shoppers have become conditioned to buy only on price promotion. While price promotion accounts for over half of Australia’s beer and wine sales, this rises to close to 80% in New Zealand. In Australia, while most categories have experienced an increased reliance on promotion for sales, beer has actually experienced a slight decrease. With beer claiming over half of the past year’s new product development sales in Australia, it would seem that shoppers are willing to pay a premium for innovation. Brands should take care to avoid the pitfalls of relying solely on price promotion and consider other activation strategies such as in-store advertising.

Government
Although RTDs now look to be back on track for growth, the 30% short-term decline in the category value (post-excise increase) illustrates how the Australian Government can be a real driver of structural change. Of significance is the current call for the ban of broadcast advertising of alcohol. A ban on television and radio advertising could lead to retail media becoming an even more integral part of the marketing mix.

Wine
The majority of consumers have a real lack of knowledge on wine, but are thirsty to learn. A lot of wine shoppers buy the brand, or the packaging. With the extraordinary success of NZ Sauvignon Blanc worldwide, the question was raised at the Symposium whether the comparative decline of Australian wines was down to the product, or the marketing.

A 2009 report by Miller Zell on effective in-store triggers found that 43% of shoppers want more information on product details. A similar percentage of shoppers want product comparisons. Tesco in the UK provided this in the form of an online wine selector, advising consumers which wines went with which meals. This type of communication needs to be followed through in-store to speak to these consumers as shoppers.

Guest Post: Understanding shopper behaviour

By Shopportunity.

http://www..sh-opportunity.com.au/

Shopportunity are specialists in shopper research and behaviour. They provide Shopper, FMCG and Retail intelligence, strategies and training for major clients including Foster’s Group, Nestle, Sony and Coca Cola. Shopportunity works closely with TorchMedia, providing channel intelligence and shopper behaviour insights to underpin effective retail media solutions.

A shopper is not a consumer is not a shopper.

‘Consumer Marketing’, the traditional approaches associated with brand campaigns and driving demand, are still as important as ever in the Retail & FMCG marketing mix.

But are consumers the same as shoppers? And is ‘Shopper Marketing’ different?

Often consumers and shoppers are not the same. Basic examples such as pet food and children’s products demonstrate this point, as well as the concept of the ‘main grocery buyer’ buying for the whole family.

Whilst not always so clear cut, in can be helpful to think of Consumer Marketing as ‘before store’ and Shopper Marketing as ‘in store’.

Consumer Marketing is about building awareness and demand. Shopper Marketing is about converting the sale once you’re in store.

Understanding and communicating with shoppers can be broken down in to three key points:

1. Solve their Problem
2. Make it Easy for them
3. Make it nice (or even FUN, if your category allows

Let’s look at each.

Solve Their Problem
Shoppers are most often trying to solve a problem, as quickly as possible. ‘What will we have for dinner tonight?’, ‘How can I feed the family economically for a week’, ‘What will we get John for his birthday’, ‘I’m thirsty’, etc.

Key points to remember in shopper marketing:

• Know what primary shopper problem you are solving
  
• Communicate how you solve that problem simply at point of purchase e.g. ‘Healthy dinner in ten minutes!
  
• Think about the kind of shopper that has this problem you help them solve. Who are they? Who are they buying for (the consumer)? Make up a consumer profile and a shopper profile to really understand the differences in how you need to communicate before store versus in store.

Make it Easy
Your average supermarket has about 40,000 different product lines. It’s a minefield, and it can be confusing and annoying trying to find what you want as a shopper.

Some key points:

• Use retail media for directional assistance to help them find your product / brand quickly and easily, and again communicate the problem you are solving.
  
• This goes with that: think carefully about the locations and category adjacencies for your product. Does where you are in the store actually make sense from a shopper perspective? Are you where people would expect to find you? If not, conduct some research to back up your case to the retailer about where you think your product should be in the store, what secondary locations you should be in etc. Some retailers are ‘getting with the program’ about occasion-based in store areas (such as ‘dinner tonight’), which more truly reflects how shoppers shop.
  
• Keep your packaging and point of sale marketing pieces SIMPLE. Focus on your primary selling proposition (how you solve their problem better than anyone else). Most point of sale should have no more than four words on it. Just a picture is even better.

Make it Nice
Whilst some shopping (such as fashion) can be a recreational activity, the majority of day-to-day shopping such as groceries are essentially a GRUDGE task. People don’t actually enjoy it. Shopping for things is often nowhere near as much fun as consuming them.

How to make it nicer for them:

• Within the parameters of your retailer store policies, think about how you can introduce theatre, entertainment and sensory experience to the shopper experience of your product. Make it fun!
  
• Reward your shoppers. An extra 25% free, loyalty programs, gift with purchase, competitions with meaningful prizes – it all helps take the drudgery out of shopping.

So in summary, the key to successful shopper marketing is MAKING SHOPPERS' LIVES EASIER, BETTER AND MORE FUN. It’s not rocket science – but far too easily (and frequently) forgotten!

We hope this article has been useful. Feedback and questions are welcome: enquiries@sh-opportunity.com.au

Costco: Hot or Not?

Once a quarter, research firm Synovate Aztec presents an in depth Grocery overview – “What’s Hot?” - to all TorchMedia staff.

Last week Shopperholic sat in on the presentation, which included some interesting discussion points concerning the latest global retail player to enter Australia – Costco. The opening of Costco’s first store in Melbourne certainly created a huge amount of hype with thousands of bargain hunters visiting the store on the first morning. Not even the 50 plus checkouts could cope with the demand.

Costco President and CEO, Jim Sinegal, explains the company’s success to date.

“Costco is able to offer lower prices and better value by eliminating virtually all the fills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing and accounts receivable”.

Perhaps one of the most interesting facts about Costco is its impressive MAT (moving annual turnover) compared to the number of stores it has. Costco sits at number 9 on the list of Global Retailers with a MAT of $78,750 million gained from only 559 stores. The highest number of stores in the list of top 10 global retailers is Sven & I, Japan with 25,137 stores while the Metro Group in Germany has the second least number of outlets after Costco with 2,334 stores. This statistic shows just how big and successful each individual store has been overseas.

But will the chain be a success in Australia and break the market dominance of Woolworths and Coles?
There will certainly be shoppers attracted to the low price brand and private label SKUs that Costco offer. However, there are clearly some barriers to success if the retail giant want to steal market share away from the likes of Coles and Woolworths.

Finding locations for the stores is a major issue likely to prohibit expansion. The stores need to be close enough to major cities to be accessible to its middle income family target market, but finding sites big enough is causing huge headaches. Unlike shoppers overseas, Australian’s do not traditionally travel far for their grocery shopping. Having stores too far out of traditional suburban suburbs is likely to limit long term success, with shoppers eventually choosing convenience over price.
Suppliers' relationships with Costco will also be an interesting determinant on the prices Costco will be able to offer and the range of branded SKUs available in the long term. The larger specific pack sizes required by Costco may add considerable costs to suppliers business which may prove difficult to absorb.
Finally it should also be interesting to see how Australians adapt to shopping membership fees, which is a foreign concept in Australia.
While Costco’s arrival may add an extra choice for some Australian shoppers, only time will tell whether the company is a real threat to Woolworths and Coles grocery supremacy.

To delete or not delete?

Each day Shopaholic’s inbox gets filled with dozens of emails from marketing industry association’s spruiking the latest research results. Most days they get sent straight to the recycle bin but every now and then a worthwhile study stands out and catches Shopaholic’s attention.

One such study was conducted by Arbitron Inc., a New York media and market research firm.

Compared to markets in America and Europe, retail media is in its infancy in Australia and therefore Shopaholic often looks upon overseas studies with a comparable interest. It is always fascinating to gauge the level of success and popularity certain types of media have in other markets.

The Arbitron study, which interviewed a total of 1,666 people to investigate experiences with different forms of media and advertising, reveals that two-thirds (67%) of US residents aged 18 or older have seen an Out-of-Home digital video display in the last month.
The study also found that digital video displays in retail locations alone reach over half (53%) of American adults in an average month. The study found that the general audience for OOH digital video displays represents a cross section of American consumers, and closely mirrors the average U.S population.

These statistics are quite impressive and provide a real indication of the traction OOH digital screens have in the U.S. Other studies have found the public’s reaction to place based TV networks to be extremely positive.

The penetration of OOH digital screens in overseas markets is definitely encouraging for the media here in Australia.

Guest Post: How to leverage the in-store opportunity.

By Shopportunity.

www.sh-opportunity.com.au

Shopportunity are specialists in shopper research and behaviour. They provide Shopper, FMCG and Retail intelligence, strategies and training for major clients including Foster’s Group, Nestle, Sony and Coca Cola. Shopportunity works closely with TorchMedia, providing channel intelligence and shopper behaviour insights to underpin effective retail media solutions.

In-store promotion is a different beast than before-store. Why? How do we get the most out of it?

Contrary to marketing’s greatest sacred cow: beware the ‘integrated’ campaign (read: rolling out the same concept in store as you put on the telly). Unless ‘integrated’ means significantly morphed for the retail environment, your classic ‘fluffy brand campaign’ simply won’t work in store.

Why? For starters, the shopper and the consumer are not always the same person, television advertising campaigns don’t require the sort of retailer buy-in that in-store promotion does, and the role of in-store promotion is conversion not awareness-building.

The ‘holy trinity’ of promotional bang-for-buck:

1. Retail-Ability
2. Knowledge-Ability
3. Shop-Ability

Let’s look at each.

RetailAbility

The Retail-ability of your promotion is about your retail rationale. What is the business case for the retailer to get on board your promotion? How is it going to meet their objectives as well as yours? Without retailer buy in, you don’t have an in-store promotion. Here’s how to get it:

· Have a clearly developed retailer business case for the promotion

· Demonstrate a vision for growing the whole category (and therefore their whole store), not just your brand (switch alone to your brand offers no incentive to the retailer to get on board, it doesn’t necessarily increase their profit)

· Tailor your promotional offer for the channel and specifically for their chain or store. Retailers always prefer exclusive promotions, why should they get behind you if you’re doing exactly the same promotion in their competition?

· Add value to the retailer by offering insight about shopper behaviour in your category and channel, and why the promotion will work based on this (see point 2: knowledge-ability)

· Be aware of retailer policies (such as ‘clean store) and match your recommendations to them

· Link your promotional mechanic and ‘big idea’ clearly to retailer objectives. For example, is this promotion designed to increase frequency of purchase within the category? Or grow average weight of purchase? If you’re not clear on what retailer objectives are visit http://www.sh-opportunity.com.au/2009/leveraging-retail-objectives-to-drive-growth-frequency-and-inter-purchase-interval/

KnowledgeAbility

The Knowledge-ability of your promotion is about the depth of insight that underpins it. Promotions that really deliver at the cash register are in-store focussed rather than ‘extensions’ of broader branding campaigns. Some key points:
· Differentiate between the roles of mainstream media and the in-store marketing opportunity. In-store is about conversion not about awareness. Before-store promotion is about awareness. If your campaign is not designed specifically and compellingly to encourage shoppers to pick that item up and put it in their shopping basket, it’s a waste of your money.

· Understand shoppers vs consumers, missions vs occasions. This is the great divide between consumer brand marketing and shopper in-store marketing. Consumption occasions differ from shopper missions – the mission is the kind of shopping trip the shopper is on. It affects all their behaviour in-store, in particular shopper movement, which is critical when designing your retail promotion. There is a tome to be written here in itself, but for a snapshot of shopper trip types visit http://www.sh-opportunity.com.au/2008/its-a-trip/

· Know your category. What is the role of the category? Destination? Impulse? What is the purchase decision hierarchy – how important is quality versus price versus ‘newness’ versus other factors? If you are in a category where price is nowhere near as important as quality and ‘newness’ or ‘buzz’ factor, you wouldn’t run a price promotion, for example. There is also a tome to be written on ‘don’t drop your pants on price because the retailer tells you it’s ALWAYS the most important thing’. It’s not, always. Knowing shopper behaviour in your category also affects the logical locations and adjancencies for your promotions in store.

ShopAbility

This part is where the rubber hits the road: how your promotion is received by shoppers in store. Key things to remember:

· Activate appropriately for the channel. Back to point 1 ‘Retail-ability’. Grocery is different to pharmacy is different to liquor is different to convenience. Shoppers behave differently in each channel. Make sure your promotion demonstrates this knowledge. TorchMedia have been working with Shopportunity for many years on channel intelligence – it’s a key point of difference for their promotions. Ensure your other point of purchase applications are also channel specific.

· Clear messaging. Good point of purchase promotions have a clear and compelling offer, an obvious call to action and ideally a focus on the occasion to establish relevance to the shopper (e.g. ‘dinner tonight’ or ‘entertaining’ or ‘gifting’ etc).

· Placement - Right things for right channels in right places. Again this is about relevance to the shopper. You will need to prioritise; where your product is is most important? You may not be able to have a presence on every step of the shopper’s path to purchase, but at a minimum you do need to be where the key decision is made. Most often that is exactly where your product is located in store.Keep it fresh. Most shoppers visit the same store at least every 2 – 4 weeks depending on the channel. Avoid becoming ‘wallpaper’ – stay visible by changing your promotions frequently.

So in summary, by improving your Retail-Ability, Knowledge-Ability and Shop-Ability, you can expect your next promotion to deliver Profit-Ability at the register! We hope this article has been useful. Feedback and questions are welcome: enquiries@sh-opportunity.com.au or illuminate@torchmedia.com.au

Shopper Marketing: A big elephant.

What the hell is shopper marketing anyway? Whatever you think it is, I can garauntee you someone else is thinking something completely different.

Maybe comparing those of us in the industry to blind men groping around at the various body parts of an elephant is a little harsh, but nevertheless Chris Hoyt speaks the truth in this article.

Hoyt uses the following activities to describe what shopper marketing consists of:

1) Making it easy for the mutual shopper to find and buy one's brand

2) Extending the equity of one's brands through the door of the store straight up to the point-of-sale (Shopaholic's favourite...)

3) Providing a source of differentiation for both sponsoring brands and participating retailers

4) Activating purchase at the point-of-sale by delighting, engaging and motivating the shopper (like this one too...)

5) Tailoring the above activities to align with the objectives, strategies, platforms and protocols (do’s and don’ts) of different channels, formats and retailers.

Hoyt also provides an interesting analysis of the various "blind men", each with their own skewed perception on what shopper marketing is, or what it means to them. Media agencies, consultants, retailers, marketing departments and sales teams all come under the microscope.

If you fall into any of these categories then it's definitely worth reading the full article. Especially if you find yourself occasionally mistaking an elephants tail for something entirely different.

RTD Tax... Answer to binge drinking or political spin?

Shopaholic has been out and about of late, schmoozing at industry events and listening to discussions on the latest in industry news.

The latest Liquor Merchants Association of Australia breakfast last week provided an avenue for discussion on the topical problem of binge drinking and the governments “answer” - a tax on RTDs.

Being the newest member of the LMAA, it is only fitting that Shopaholic expresses opinion on these issues.

The lack of personal responsibility in regard to binge drinking was a major issue of conjecture at the breakfast forum. The onus of putting responsibility to the individual has been lost in this debate.

One only has to look at the successful transformation of attitudes for cigarettes and drink driving as evidence. In both these cases the onus was on the individual to take responsibility for their behaviour.

In regard to binge drinking, the government seems to be putting a larger onus on alcohol manufacturers than they are on the individuals who drink to excess.

Sure alcohol marketers have a role to play. They need to ensure they promote responsible service of alcohol and never promote excessive drinking. Marketers need to make sure this is communicated in advertisements and never be open to misinterpretation. But to excessively tax a single product type, certainly does little more than encourage product substitution. It is not helping get to the bottom of this issue.

Until a larger responsibility is placed on the individual and it is an offence to be drunk in a public place, a tax on RTDs is little more than political spin.

P.S Watch out for the June edition of National Liquor News for analysis on how wine marketers can target the next generation of drinkers – the 18 - 25s.