What's more: three of the brands in the Top Ten of Yellowwood's annual South African Engager survey were retail brands - Pick n Pay, Shoprite and Woolworths. The Engager survey aims to assess consumer perception of brand value. This, together with anecdotal evidence such as the kilometre-long queues seen for the opening of a new Makro store in October 2011 demonstrates that South Africans are indeed a nation that loves to shop.
So, what themes emerge when considering how to penetrate markets and retain market share? What is the recipe for success for current and potential retail brands in South Africa?
Value can trump price - even in a recession.
Woolworths is a high-end brand. However, in a recession, Woolworths needed to find an intelligent way to offer value to cash-strapped customers without compromising their premium position. Therefore, understanding that their shoppers interpret value 'as good quality at an affordable price'; Woolworths successfully marketed their "Eat in for 4 under R100" campaign -driving business through the door and enhancing their reputation as a quality brand.
The lesson: Retail strategy requires constant revision. Develop a clear understanding of how your market understands 'value' in order to negotiate a market offering that is relevant to clients. For example: does the market 'value': quality, quantity, add-ons, choice or simply price - and then consider how to balance these variables at different stages of the retail cycle.
Can a retailer be all things to all people?
Yes, but only within a strong brand architecture. A brilliant example of this is Truworths. Through diverse retail brands such as YDE, LTD, Uzzi, In-Wear and Daniel Hechter (each with its unique brand identity, merchandising and price points), Truworths appeals to a wide range of market segments. The brand architecture allows each brand to cater to its unique segment but also ensures that the brands don't contradict and undermine each other.
The Lesson: Diversification into different market segments under the guidance of a powerful brand architecture allows each brand to thrive. So, one stop shops can survive if they can create an experience of 'individualism.'
Customer customised
Pick n Pay has come a long way since opening shop 40 years ago. The retailer now offers financial services, clothing and even an in-house travel offering. With the launch of the 'Smart Shopper' card earlier this year and the back-end database that will accompany it, Pick n Pay can now personalise and target communications to specific markets.
The Lesson: A customised experience requires information. Find innovative ways to gather insightful information about customer behaviour and use it to devise service offerings and reward customers in ways that they find valuable.
Customer experience is king
The retail landscape has evolved from a highly commoditised category to one where the 'staging' of an experience and engaging customers is key. American retailers like Toys R Us and M&M's World transport you to a world of sensory indulgence. At M&M World, there is everything from customised M&M flavours to M&M boxer shorts! Locally, Cape Union Mart with outdoors-inspired stores and climbing walls are making the retail experience fun, exciting and most importantly...interactive.
The Lesson: The way in which we shop is changing. As a society we've moved from the personal touch that came with the corner cafe to the convenience of the supermarket and now, we want the corner cafe in the supermarket. Giving customers ways to express themselves; ways to gain fresh experiences and even enabling them to co-create product offerings translates to a competitive advantage.
South Africans are becoming increasingly demanding. Marketers not only need to monitor customer behaviour far more frequently but find ways to gather that information and be creative in developing cutting edge concepts and business models that will do three things: be relevant to the individual consumer; add value in a way that the market segment understands 'value' and hold the attention of a fast-moving market through responsive brand engagement. Only the strong will survive to reap the rewards from those who shop till they drop!
