Own-label... The new brand?

An ad caught my attention lately, for Aldi, I found it simplistically funny. We see an elderly lady sitting at her dining table who says “My husband likes these tea bags” (shows PG Tips) “And he also likes these tea bags” (shows Aldi Red Label) “I don’t like tea... I like gin”. In taste tests 133 liked PG Tips and 77% of them also liked Aldi.

I know economising is Aldi’s whole premise, but I also found this ad particularly apt in the current consumer climate. The purchase of own-label products is seen by consumers as a good way of saving money. We are all questioning which brands we really value, and we are starting to be honest with ourselves about which brands we can replace with cheaper and own-label substitutes. There is a push- and pull-effect here, with supermarkets investing in their own-label portfolios and consumers becoming increasingly accepting of these cheaper alternatives, reinforcing the competition between own-label and brands.

By providing a full range of values for their products, supermarkets are providing options so consumers can premiumise their “valuables” and can down-grade items they value less. This is done on an individual level, because as one man buys economy eggs and premium tissues, another will buy premium eggs and value tissues. Supermarkets recognise this – with their value ranges spanning the full scope of consumer products – fresh produce to household cleaning products to white-goods, and are increasing their ranges of retailer premium own-label with organic and Fairtrade extensions.There is only so much shelf-space so with supermarkets extending their own-label lines, other manufacturer brands are being pushed out.

The popularity of own-label has intensified. People are now, more than ever, less convinced that well-known brands are better than own-label, with more than half of consumers considering own-label to be as good as manufacturer brands. As consumers are more willing to switch between own-label and manufacturer brands, brand loyalty is becoming harder to achieve. 

So how can brands fight back?

• It is becoming increasingly important to develop distinctive brands that establish customer loyalty and compete effectively on factors other than price. Identify what brand essence the consumer bonds with and enhance this, keep brand promises, provide outstanding customer service, and develop websites and online purchasing opportunities. Make the customer feel valued by ensuring all contact points are first-rate. ABs and people in the pre-family lifestage are the most averse to own-label, so invest in the brands that target these audiences to take advantage of this connection.
• Alternatively, offer low-cost versions of key brands, particularly for targeting families and those on lower incomes. However, to avoid risk to long-term equity, ensure your company has the resources to develop these new lines clearly and separately.

The Importance of Perspective

I was talking to a friend of mine about his recent work trip to Moscow. His trip was a business one, designed to train the team in their communications and advertising processes moving forward. At dinner the night before the workshop, my friend was talking to the team leader who was a bit anxious about how successful the workshop would be. Upon inquiring further, he learned that Muscovites don’t like being told what to do. Then the penny dropped, these businessmen and women in their mid- to late-30s have experienced Soviet Russia. They, as children, queued in separate queues for each food-type: bread, sugar, rancid butter, while their parents queued for other items. Comparing that day to now is a stark contrast, and this generation has experienced such a difference in lifestyle over a couple of decades. The team leader simply said: “As a race we don’t like being told what to do. We have experienced so many bad decisions that have been forced upon us”. Naturally my friend used this insight to adapt the tone of the workshop.

It is so important not to assume we all think in the same way. When you step back, this seems like an obvious point, but there are many times we rush in with our opinions and judgements without really understanding alternative perspectives. In the book What the Dog Saw, Gladwell gives many interesting examples of looking at the same information in a different way.

Last week, in Stylist magazine, I read, ‘Recent national statistics show that only 14% of German mothers return to full-time work once they have had a child, and of mothers with two children only 6% return. In the UK, by comparison, two-thirds of working age women with dependent children are in employment.’ Now, I wasn’t surprised by these statistics, because I have recently conducted a study into mothers of young children. We found that in Germany, mothers view having children as a privilege, something to be cherished. And German mothers are more likely to change their lifestyle and behaviours to mould around the child compared to other countries, where the child is seen more as “an addition to MY life”. Taking this insight in hand, when the European commission expressed concern over the lack of mothers returning to work, stating “Germany must better integrate women into the labour market” with recommendations for more childcare facilities, I disagreed. Yes, I believe childcare facilities should be increased, but it won’t drive German mothers back to work, not if it’s not within their set of values. If you want to drive German mothers back to work, you need to change their belief-system, which is a very hard task.

It is not enough to take your perspective and then add to it what you think might be another’s perspective (although this is a start) you have to ask them. Ask them “What?” and ask them “Why?” then you might glean some insight.

Spoiled for Choice

People are prone to embracing choice, and why not? It is intuitional to think that the greater the choice a person has, the greater their happiness. But are we truly satisfied with having a plethora of options?

There are psychological factors associated with choice that have a negative effect on both consumers and advertisers. If these dynamics are addressed, it should be possible to increase sales and satisfaction levels.

Although consumers demand choice, is it beneficial for advertisers to provide it? Not necessarily. A study set in a real-life context of sampling demonstrated that the more choices people are given, the less likely they are to make a purchase. Two tables were set up, one with 30 jams and the other with six. The shoppers were offered a sample and a discount coupon for their next purchase of jam. Of those who had more choice, only 3% actually bought jam, yet of the consumers with less choice, 30% purchased jam.

Having a choice can also increase the dissatisfaction with a purchase. People feel negative emotions when having chosen from a large selection of products, because they worry they have made a poor decision, which harbours cognitive dissonance. The newer theories in psychology, such as Behavioural Decision Theory, claim that people do not really have preferences. Instead, consumers create their preferences after the event in order to appear rational; and to ease the dissonance of the possibility of having made the wrong choice.

Having an excess of options makes it increasingly difficult for the consumer to make each choice through logic and rationality; there is only so much the human brain can process. Assessing choice takes time and energy and consumers claim these two resources as increasingly important yet deteriorating from their lives. In addition to this, brand and product choices are usually prone to advertiser influence and the average person will be exposed to over 16,000 messages a day. The mind cannot process all of these messages equally, so it is vital for advertisers to stand out.

In this world of consumerism, it is unlikely that advertisers will stop providing choice – there will always be a lead brand with multiple product lines and variants as well as numerous competitors. So companies need to assess how best to connect with their consumers and cut through the choice on offer.

A good strategy for achieving this cut-through is to target your product lines to niche audiences. If you can engage a concentrated, focused and listening group with your single solution, you will eliminate the element of choice. If your product lives up to its promises, competing messages will be deterred. This will ultimately encourage your consumer to seek out, repurchase and recommend your product and brand.

Check out Seth Godin’s tips for artificially limiting your choices: http://sethgodin.typepad.com/seths_blog/2010/04/the-paralysis-of-unlimited-opportunity.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2Fsethsmainblog+%28Seth%27s+Blog%29&utm_content=Yahoo%21+Mail

Geek Chic

For decades now, geeks have been the driving force behind the first world. New developments in consumer technology, data systems and computer networks all have geeks at the reigns. These dedicated and intelligent beings are no longer behind the scenes and we’re now celebrating these hidden gems and coaxing them from behind their screens and out of their bedrooms into the limelight.

Marketing has been leaning on the expertise of geeks for a long time now. Analysis techniques are developing faster than all the data can be analysed, we’re now being recorded and analysed on which websites we look at, what we buy in the supermarket, and how we behave at work. Take Tesco Clubcard for example, one of the most powerful data collection sources in the marketing world, where behavioural data on consumers are constantly being collected and analysed; and not only for its promise of providing consumers with discounts in exchange for their loyalty, but also to monitor how people spend their money and fluctuations in how much is spent. Search analysts provide data sets upon which to invest millions of advertising pounds. Google is the leader in this field, not only for collecting data, but interpreting it, and developing innovative products, which are tested by more geeks.

So who are these geeks? Well, they have a tendency towards intelligence and individuality, with an obsession about the things they love, both work and play. It is not only analysts that are covered by the geek umbrella; they are thriving in a wide range of creative pursuits. The independent film movement was invigorated by self confessed geeks Kevin Smith, the Coen Brothers, and Quentin Tarantino. DJs and other music artists, including Fatboy Slim, Moby, Aphex Twin and John Digweed, are making a fortune without help from the big record labels, radio stations or MTV. Tony Hawk, the champion skateboarder, hails clean living and has worked hard to be involved with the X games, and has developed one of the bestselling video games: Tony Hawk’s Pro Skater.
There has never been a better time to be a geek. They’re gracing the covers of magazines, giving talks at prestigious events, and getting the girl. Consider Peter Orszag. As director of the US Office of Management and Budget, he is the nation’s most powerful pencil-pusher and was recently named one of the hunks of Washington DC. “He’s made nerdy sexy,” Barack Obama’s chief of staff, Rahm Emanuel, said of the 40-year-old, glasses-wearing son of a maths professor.

The geekdom is unlikely to diminish with the likes of Gen Y reaching adulthood and entering the workforce, and bringing their innate understanding of technology into the mainstream. As geeks become more openly successful and publicly celebrated, they are sure to inspire others. There are even inspirations for old-school studs to enhance their geek chic, such as an online style magazine called www.thechicgeek.co.uk.

But who will be the next to emerge into popular culture? Will we be following the nerd herd? I wouldn’t be too surprised with Belle Du Jour revealing herself as a college scientist, and Victoria Beckham’s latest collection at New York fashion week being dubbed ‘Nerd Chic’.

Repeats on TV

An interesting development in entertainment this year has been the turnaround of consumers’ perceptions towards watching programme repeats. Running repeats on TV has a history of making channels look cheap. However, times have changed and not only are the number of TV channels increasing, but more consumers than ever have digital TV and personal video recorders (PVRs). There is not enough new programming to fill the schedule, so programmers have had to strategically place repeats to ensure 24 hour viewing on most channels, yet retain high viewing figures. Repeats are now so successful, that there are several successful channels that are dedicated to them.

Advances in technology that allow consumers to customise their viewing, have also helped to turnaround consumer perceptions of repeated programming. The introduction of PVRs to the UK in 2006 certainly altered consumers’ viewing behaviour, with programmes now being selected by these consumers as ‘to view’ or ‘not to view’. BBC iPlayer, which launched at the end of 2007, has proved tremendously successful, pumping out 12GB of data every second at peak times (around 10pm). With consumers pre- and post-programming their own schedules, repeats are no longer seen as a nuisance at a time when viewers want to watch something else, they are instead slotted into either their ‘to view’ schedule or are disregarded and allotted as ‘not to view’ programmes. iPlayer 3.0 this year will enable further personalisation and will probably include pre-programming, which could increase the reach of these ‘customised viewers’.

It is fortunate timing for production houses, although I am unsure whether there is any cause or effect involved, that this flip has happened during the recession. During hard times it is important for producers to be cautious with their choice of investment and create a balance between cutting costs in programming (ABC cut wardrobe costs for shows including Desperate Housewives and Dirty Sexy Money, with the cost of a pair of ladies shoes being capped at $250), creating new shows that follow an already successful formula (such as Law & Order UK), and running repeats.

In the future however, it will be necessary for programmers to refrain from flooding schedules with repeats, because a lot of different channels are now showing the same material. Once the recession starts to ease, consumers will once again expect large investments in new programming, particularly as they have demonstrated patience during these hard economic times. It is possible that consumers will tire of repetition; but it is just as easy to foresee that the Digital Switchover and increasing penetration of TV personalisation could see longevity in this trend.

Cocooning

Cocooning is a trend that has been gathering momentum for a while. I remember hearing about some of the following elements before I left for Australia. The recession has certainly put the fundamentals into a greater arena, causing the trend to become more noticeable.

People are creating self-sufficiency in their homes, meaning that there is less of a need to venture to the outside world. The availability of technology, professional systems and appliances are making it easier for Cocooners to help themselves. Technology has enabled the average citizen to create their own hi-tech entertainment, whether through purchasing HD televisions, Blu-Ray players and PVRs, to watching 20 hours of extras on The Lord of The Rings, to subscribing to Lovefilm.com. All of these have spiked in sales and memberships, thereby creating a reason to stay at home. This isn’t to say people are becoming more anti-social: online gaming is increasing with World of Warcraft now counting 11.5 million subscribers worldwide; and playing Nintendo Wii, and social technology games such as Guitar Hero and Sing Star after a dinner party are not uncommon.

Dinner parties themselves have upped the ante. With Jamie Oliver and Gordon Ramsey gracing our screens on what seems to be a weekly basis, cooking at home is becoming increasingly gourmet. Simple yet impressive dishes are being introduced to families and entertainers alike; fresh ingredients and British produce are infiltrating modern households. Although, having said that, supermarkets are cashing in on the gourmet ready meal sector (although this has become a little up and down during the recession). It has been predicted that the ready meal market will continue to increase over the next few years, with the main area of growth being in the healthy ‘gourmet’ sector. Small kitchen appliances are also on the up. People are now able to provide their families with homemade produce, including bread, juices and ice-cream.

Supermarket shopping online is a small sector, but total online shopping is big business and I expect this to rise. Many people still have concerns about shopping in the comfort of their own home, with identity fraud playing a big part in this. Also, people still want to go to shops in person, in order to touch the produce and to try on clothes and shoes before buying (the senses are key in modern consumerism). However, most supermarkets will now provide an online order and delivery service, some claiming to ensure they pick the best produce available – so that you don’t get a rotten plum that you would never have picked out yourself. There are also apparel shops that have little or no high-street presence, such as Coco Ribbon, My Wardrobe, ASOS, and Net-a-porter, who all provide a source of selective fashion with robust return policies.

“So close it will not light an early light,
Keeping its life so close and out of sight
No one for hours has set a foot outdoors
So much as to take care of evening chores.”
This is an extract from a poem by Robert Frost written in 1928. The essence of the poem tells us about people wasting their lives in their homes, not doing anything outside. They don’t even know the cocoon is shutting them out permanently. This may be a possible outcome for the current trend of cocooning, but I certainly disagree that with the assistance of technology of today, it would be hard for Cocooners to be “wasting their lives”.