#MRW: Hyper-relevant future • SA shoppers • Creative effectiveness
Cheryl Hunter (research at marklives.com)’s weekly wrap of the latest market and consumer research:
- Relevance the new loyalty
- SA shoppers drop the basket
- Effectiveness trends
Accenture’s hyper-relevant future
New research released last night, Wednesday, 1 August 2018, by the Accenture Interactive Africa, the digital practice of the management consultancy, reveals that established South African companies not meeting their customers’ needs ‘in the moment’ are risking their bottom line because they’ve not switched from the loyalty era to usher in the relevance era.
According to Accenture’s 2017 Global Consumer Pulse research, in the SA market alone, companies lost R663bn last year in potential revenue due to customer switching, with a lack of relevance driving 66% of switching.
Wayne Hull, head of Accenture Interactive Africa, says nearly three-quarters of consumer switching is driven by a lack of relevance, putting R438bn of potential annual revenue in jeopardy: “In South Africa — and throughout much of the world — the era of loyalty marketing is waning. Businesses can no longer expect their customers to be motivated by incentives such as points or miles to purchase goods and services. The era of relevance is dawning and it requires a major mindshift.”
Today, customers demand personalisation in everything. They want companies to evolve with their needs, to move beyond traditional offerings and make it easier for them to do the things that their activities connect to — becoming not just relevant to them but hyper-relevant.
To identify a clear path forward for today’s large organisations, Accenture undertook a major research initiative in 2018, The Hyper-Relevance Era, to determine how leaders in sustainable growth are different from their peers.
It found that these companies:
- Understand the changing digital needs of customers.
- Pivot growth strategies to profitable areas beyond the core.
- Fund new growth by optimising costs elsewhere.
Additionally, the findings indicate that the path to continuous growth depends on developing five interdependent sets of capabilities:
- Target core- and disruptive-growth initiatives
- Design products and services as hyper-relevant platforms
- Build prototypes and scale new and innovative experiences
- Scale by cultivating a broad and essential set of ecosystem partners
- Rewire the organisation’s culture and workforce by embedding and powering a mindset that keeps customers at the core
“Relevance” is the new benchmark for success. To close this growing gap, SA business leaders must create new advantages before their current strengths fade.
Hull says now, more than ever, there’s a need for a strategic rethink. For CMOs in particular, the new consumer landscape calls for an expansion and realignment of the marketing framework: “Fortunately, with advancements in data analytics, companies now have the ability to see and react to consumer fluctuations in the moment. Moreover, every transaction or engagement can be tapped, yielding the key data needed to personalise future experiences.”
The age of hyper-relevance is upon us. The message: adapt, or your customers will switch to your competitors, and soon.
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Consumers under pressure in Nielsen’s Shoppergraphics Report
The latest Nielsen Shoppergraphics Report — which looks at shifts in consumer-purchasing behaviour within 4 000 representative households across the country on a quarterly basis — reveals local consumers have dropped an unprecedented three grocery categories from their shopping basket.
It’s no secret that SA shoppers are beset by a storm of rising prices and it seems their shopping baskets are definitely feeling the pain, with the average consumer now hyper-aware of what they’re purchasing.
Says Kelly Arnold, Nielsen CPG client service director, “South African consumers are experiencing a severe wallet-squeeze, thanks to a raft of rising costs including spiraling petrol and electricity prices, the implementation of sugar tax and a VAT increase to 15%. The effect that this has had on consumer behaviour is profound and we’re now clearly seeing shoppers jumping out of some categories and consolidating their spend. As the household basket has become more expensive, we have also seen consumers limiting the number of trips, to 60 trips a year on average, and the top up shop that used to be twice or three times a week has dropped to once every two weeks, with spend per trip now averaging at R210.”
“Interestingly, the repertoire or number of stores that consumers visit has increased to 4.9 retailers a year. This is as extremely price-conscious consumers seek out deals, and are more prepared to shop around.”
There’s a move towards consumers spending more on dry groceries and perishables, with staples remaining stable. The highest amount of spend is happening in frozen chicken and ready-to-eat cereals, sugar and UHT milk (a long-term trend) and canned meat. The biggest declines were experienced by household/cleaning goods, which are no longer seen as a necessity, dropping by 6% and beverages by 6%, with carbonated soft drinks (CSDs) experiencing particularly negative performance.
To counter these trying times, retailers need to ensure they have the right composition of goods for their shoppers, at the right price. given that positive price perception is extremely important for future success.
• • •
WARC insights from Cannes Lions
Global marketing intelligence for advertising and media effectiveness, WARC, has released the results of its analysis of the 169 campaigns entered into the Cannes Creative Effectiveness Lions this year, highlighting four major trends.
The report analyses factors such as the lead media, media mix, creative strategy and metrics of the entries and winners of the Cannes Creative Effectiveness Lions, which rewards highly creative work, which drives commercial outcomes. Trends highlighted in this year’s report are:
- Solutions not campaigns: Judges rewarded initiatives by brands that solved specific problem.
- Emotion and humour: Emotion and humour were key drivers using emotional storytelling
- The growing need for online conversion: Web traffic as a metric for shortlisted papers more than doubled since 2017, from 7% to 15%, demonstrating the increasing demands on marketing to link to brands’ ecommerce-based objectives
- Purpose with PR achieves results: Brand purpose took a different tone, with fewer tear-jerking videos; instead, there was a greater emphasis on highly creative, original ideas, with PR embedded upfront
WARC’s “Insights from the Cannes Creative Effectiveness winners” report includes in-depth analysis, lessons from the winners and winning case studies; access it here.
Cheryl Hunter (@cherylhunter) has written for the South African media, marketing and advertising industries for more than 15 years. A former editor of M&M in Independent Newspapers and contributor to Bizcommunity, AdFocus, AdReview and the Ad Annual, she has also produced for various television networks and currently consults on communication strategy and media liaison. She now does the new weekly “Market Research Wrap” column for MarkLives.com.
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