Market Research Wrap: Private labels grab 21% of SA retail

by MarkLives (@marklives) Our weekly wrap of the latest market and consumer research:

• SA private labels worth R49bn
• 2019 media predictions
• #1 reason for buyers talking to sales teams

Private labels continue to grow in SA

Private label products in South Africa now equate to R49.3bn annually, commanding a 21.1% share of the South African retail sector, up from 20% in 2017 and ahead of branded product growth in the country. This is according to the latest 2018 Nielsen report, “State of Private Label in South Africa”. [Cheryl Hunter]

The private label research — products sold exclusively by a specific retailer or chain of stores, including store brands — covered 155 categories, within eight supergroups and across a range of leading local retail groups within SA.

Says Gareth Paterson, Nielsen South Africa retail lead, “Recent years have shown an upward trend in the private label category, with improving consumer perceptions around their quality and value, driven by a greater focus from retailers to develop value for money offerings resulting in increased innovation and differentiation within this space.”

Overall, the top private label category remains long-life milk, with fresh chicken in second place. One of the biggest movers has been prepared foods, which has jumped from no. 12 to the third position, in line with a big move in SA towards convenience options and the desire to reduce food-preparation times.

“We are seeing previously smaller supergroups in private label like baby care, personal care and confectionary achieving double digit growth, which is well ahead of branded product growth,” he adds.

Currently, 55% of sales come from LSM 7-10 but the growth driver in 2018 has been the middle LSMs, which have contributed approximately 30% of sales: “Lower LSMs have also shown that they are now willing to try private label within certain staple categories like maize, compared to years gone by, when trusted brands were preferred and making the switch was not an option,” says Paterson.

Looking ahead, the expectation is that private label will continue to carve out a healthy share of retail sales within the next five years, with SA poised to benefit from a growing middle class and urbanisation and increasing modern trade access.

• For more, go to Nielsen.

Media transformation

Kantar has released its perspective of the major trends that will shape the media landscape for brand owners, agencies and media platforms in 2019. [Cheryl Hunter]

• Advanced analytics and artificial intelligence (AI) will resolve the integrated online/offline return on marketing investment dilemma
• Voice technology will break through in creative planning and the marketing mix
• Chinese leadership in social media and social media analytics will be ‘fast-followed’ by the west
• The emergence of the ‘branded experience network’ will transform media management in to ‘internet of everything’ management
• Brands will start to take the portrayal of women in advertising seriously
• Amazon will emerge from the advertising world ‘shadows’ to make the duopoly a triopoly
• Vertical video will lead the way in creativity
• The big screen will make a comeback, bigger and better than before
• Attitudinal insights, combined with predictive modelling, will make programmatic buying more agile and accurate
• Influencer marketing strategies will pivot to prioritise credibility ahead of reach
• GDPR compliance will drive more sophistication in brand data strategies
• Augmented reality (AR) will start to shape both the consumer journey and customer experience.

• Download the full report at Kantar (registration required).

The Eardley Analysis

The State of Sales 2018
LinkedIn Sales Solutions

by Mark Eardley. “The influence of a strong brand increased by 37% since last year and is the No. 1 factor cited by decision makers when choosing to engage with sales.” If you’re a B2B marketer, that will be music to your ears. Strong brands trigger sales. Not only that, when companies are deciding what they’re going to buy and who they’ll buy it from, brand influence is getting even stronger.

Fairly obviously, the report goes on to say that a strong brand needs to be backed up by a strong sales team. The brand might open the ‘doors of consideration’ but once opened — and to move deals forwards — here’s what buying-decision influencers say they expect from sales people:

• 96%: a clear understanding of their business needs, and of their role (94%)
• 93%: sharing content that’s relevant to their role
• 93%: providing personalised communications
• 92%: targeting the appropriate people at their company for initial discussions

Switching from what buyers’ want to what sales professional must do, the report emphasises that winning decision-influencers’ trust is vitally important — and it’s a two-way street: “Without trust, fewer deals close. Sales professionals rank trust as the No. 1 factor in closing deals (40%) — above ROI and price — and 51% of decision makers rank trust as the top factor they desire in a salesperson.”

On the subject of closing deals, in comparison to their peers, top performers (who exceed targets by at least 25%) see a combination of sales-enabling technologies as either “very important” or “important”.

Conducted in the US, the survey covered 507 professionals who primarily work in B2B sales, plus 502 business decision-makers who have influence over B2B purchasing decisions. The report offers relevant insights for both sales and marketing, and encourages the two disciplines to collaborate more closely to achieve their shared goals. In itself, that’s a really sound idea.

Mark’s mark out of ten (is it worth reading?): 8/10
How long: 30 mins

“Market Research Wrap” offers readers a weekly overview and critique of the latest market and industry research.

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.

Mark Eardley (@mdeardley) advises B2B companies on how to govern their marketing to attract and retain profitable customers; several of his clients have grown to become market leaders. His monthly “Back2Basics” column covers how B2B companies and their agencies should manage their marketing.

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