Friday, 28 October 2011

Connecting with Consumers on Smartphones - Now Key to Business Success

“A nation addicted to smartphones” is how Ofcom summarises its findings from a recent piece of research, saying that 27% of all adults and almost half of teenagers now own a smartphone (a mobile which connects to the internet). Smartphone owning numbers have exploded in the past year, and are set to rise further as annual sales of smartphones are now higher than those for the standard version.

More internet users connect to the web via their mobile than a laptop (45% versus 38%), and the number is even higher among 16-24 yearold where 71% access the internet via phone.
Smartphone usage is definitely here to stay and businesses are thinking through how they tap into the trend, whether it be for advertising their products, providing information, or directly selling goods online.

At the very least, websites must be simple enough to be quickly accessed. Consumers will rapidly lose patience if they have to wait for information to be downloaded. This means either having a site tailored to mobile usage, which automatically comes up when searched via phone, or having a link redirecting users from the main site to a mobile friendly one. Amazon and Tesco are good examples of a speedy tailored link. Asda’s site take an age to download.
The other option is to provide an app, or application, which sits permanently on the phone for easy access to a specific activity.

Although most usage is still for socialising, downloading music,  gaming, and searching for information,  the IGD reckons that smartphones are starting to change the way groceries are bought online. According to their research, 1 in 10 online shoppers are using smartphones to shop. Ocado claims that 15% of customer checkouts during the first half of the year came via their smartphone app. Tesco has a handy app which allows shoppers to scan the barcode of a product on their phone whereupon it is automatically added to their online shopping basket.

As to future developments, the IGD predicts that tailored apps which build a relationship with individual consumers are the way to go.
The time has probably come to view selling and marketing via the mobile phone as a crucial part of any business plan.  The research finds that 81% of smartphone users never switch them off, even when they go to bed, and that huge numbers are happy to use the phone whilst socialising, at the meal table, and even in the bathroom.

Smartphone usage is now a part of life. Those businesses without a smartphone presence may find themselves competitively disadvantaged.  


Wednesday, 12 October 2011

The Top Four Issues Worrying Food Shoppers Struggling with Austerity

According to the Institute of Grocery Distribution’s Shopper Track research the top four areas where cash strapped consumers are seeking help are:

1.       Sticking to a budget

2.      Reducing waste

3.      Making shopping a less tedious experience

4.      Understanding enough about product provenance to make the ethical choice

Joanne Denney-Finch, from IGD, speaking at their annual convention went on to explain what the frustrations are.

What shoppers do not want to see as they grapple with budgets is tinkering around with a product to hit a price point. So reducing weights or quality is a no no.

They are not happy with offers which encourage multiple purchase such as 3 for the price of two, or two for a discounted price.

What they do want are straight price reductions, and more advance notice of offers to enable them to plan better. They would also like to be able to keep a running total of spend as they go round the store to avoid the shock that can often come when the final bill is presented at the checkout.

Shoppers also say that branded budget ranges would be welcome as an alternative to buying a retailer’s own brand.

On the subject of waste, shoppers would like to see re-sealable packs, and a longer shelf life on products, as well as a reduction in the number of multi buy offers which they feel encourage over-purchase and often result in product being thrown away.

Food shopping remains a harassing experience for most, with crowds and a bewildering choice being the main sources of angst. This should point to an opportunity for online shopping but it seems that a half of all online shoppers have stopped buying this way, with a third of those finding the whole experience too tedious.

And so to provenance. Denney-Smith does not actually say that consumers will walk away from a product if they do not understand where it has come from. Rather, that giving information about provenance is a vital way of encouraging brand loyalty. She cites the Patagonia clothing website as a good example of how to do this.

So how much of this shopper wish list are we likely to see during our forthcoming supermarket trips?

It would be a brave supermarket that stopped multi- buy promotions in favour of straight money off, because the multi-buy means that shoppers spend more money in the store which helps boost turnover. This in turn boosts market share, and makes a contribution to covering overheads. Equally, anything which means shoppers limit the number of trips they make to a store is bad news as once in, many shoppers are likely to be tempted to buy something which could be classed as unnecessary.

Shoppers’ requests for budget brands are admirably served by Aldi whose whole reason for being rests on just that, but it is unlikely that major branded manufacturers will move this way. It is too costly to build a separate brand, particularly one with a low price.

The ability to keep a running total of the bill whilst going round the store is already available through Waitrose.

So far no supermarket has cracked the code to a pleasurable food shopping experience despite much effort being put in. In fact Sainsbury and Tesco with their emphasis on self serve checkouts and consequent reduction in checkout operators are merely adding to the stress of shopping.

 I have a feeling that communicating provenance will become more widespread. Certainly the technology is available for consumers to find out where there item has come from, whether through a company  websites, or social media like Facebook, or an app on their smartphone, or even through good old fashioned wording on the pack.

The thrust of Joanne Denney-Finch’s speech was that in an age of austerity which shows signs of being around for years, the winners will be those who listen hard to their customers and who are brave enough to pursue radical innovation in response to their customers’ needs. Quite right.

Tuesday, 4 October 2011

Being Creative with a Commodity - How Meat Marketers are Adding Value

These beefburgers, with their reference to breed and Britishness  neatly capture some of the ways that marketers are adding value to meat. The British reference is important as consumers continue to seek reassurance about where their food comes from, and buying British becomes more of a consideration.

Breed is increasingly being used as a value adding tool. Aberdeen Angus has for a long time been seen by consumers as a quality breed. McDonalds sells an Angus burger costing more than the standard variant, and Waitrose emphasises meat from Angus as well as Hereford cattle. Now Morrisons are embracing breed differentiation, selling beef from Shorthorns (and paying producers a premium in the process).

At the other end of the breed spectrum Kobe beef from Waygu cattle is gaining a reputation for quality, so much so that at the request of a Japanese chef, an Australian farmer is feeding his Waygus a litre of wine every day.

Making meat meals more convenient to prepare and serve also adds value as many consumers are nervous about cooking meat, and, given its price they want to be reassured that the end product will taste great. Hence the rise of "foolproof" products such as Simply Cook where all ingredients are available in one pack, the size of portion is strictly controlled, and the food just has to be flung into the oven for the specified time.

These cook in the bag products from Maggi are a cheaper solution, but offer the same benefits.

Value can be added through packaging innovation. Some consumers do not like to handle meat, so Tesco's meatballs are packed individually, in a tray like an egg carton so that the product does not have to be touched, and Waitrose sells their roasting chickens in a hard case rather than film for the same reason. Note the saltire and reference to Scotch on the pack to reinforce where the meat came from.

All this innovation notwithstanding, price remains a key part of the value equation. It is no accident that all of the above featured products from Tesco came with a promotional offer - mostly two for a discounted price. It is a sobering reminder that people will not pay if they do not think a product is worth the money.