Retailers' loyalty programmes indicate consumer fickleness
The latest Roots 2013 research sheds new light on retailers and how they are increasingly turning to crucial loyalty schemes to try to keep their existing customers and capture the attention of potential consumers. That is why the market has witnessed the escalation in these schemes over the past few years.
How do retailers and shopping centres try to encourage repeat business? "The increase in loyalty programmes, as is proven by the number of loyalty cards available to consumers has escalated," says Gill Randall, joint MD of the Newspaper Advertising Bureau (NAB).
She explains that according to the research, 50% of purchase decision makers (PDM) have a loyalty card, but that this differs from area to area. For example, 53% of PDMs in Milnerton have a Clicks Club Card, compared to the average of 25% for a Clicks Card across the country.
The question to ask is whether PDMs are loyal to loyalty cards. According to the research, consumers are flirtatious with brands. Of those PDMs with a Woolworths loyalty card, 54% also have a Clicks Club Card, 20% have a Dischem Loyalty card, 35% have an Edgars Thank-U card, 2% have a Fanatics (Exclusive Books) card, 8% have a Jet Club card and 53% have a Pick n Pay Smart Shopper card.
"Based on the above, it is clear that consumers are not loyal to one store or brand and thus when deciding on marketing and communication strategies, you're bound by some serious fundamentals and buyer behaviour characteristics," says Randall.
For instance, markets are thin and buying behaviour is random. "Consumers cross shop (all retailers and brands share the same customers), they shop locally and they pre-plan their shopping, meaning that retailers need to do their research."
She explains that of all PDMs who shopped at Woolworths (692 536) for food and groceries, 54% also visited Pick n Pay, 21% visited Shoprite, 38% visited Checkers and 32% visited Spar. Numerous PDMs also visited other stores as well.
Target areas
So what is the solution? "It is certainly not to target one demographic. This could be lethal as there is no typical retailer profile and brand profiles differ by area.
"As shopper profiles closely match the area profile - not some idealised description of a brand profile - it stands to reason that brand usage will follow the same pattern. The simple truth is that people shop close to home so you need to offer them more choice so that they don't have to travel."
That is why many retailers utilise community newspapers as their media platform of choice. They achieve the maximum reach of consumers in all shopping categories. According to the research, inserts are 'studied' while shoppers are going through their planning process.
"The research confirms that in the LSM 4-7 category, 61% (1.4 million PDMs) are reading their local paper versus all weekly papers (combined), which only reach 23% of these PDMs. It also confirms that in the LSM 8-10, 71% (2.2 million PDMs) are reading a local paper versus all dailies (combined) which only reach 35% of all these PDMs."
From the above, it is evident that community press meets all retail and brand communication objectives.
Income and shopping stats
The average household income by area definitely plays a part in the amount of disposable income that PDMs have available to spend.
Across the survey Ruimsig (Johannesburg) was the area with the highest average household income (R42,103), followed by Sandton (R41,682); compared to the two lowest which are Riverlea (South West) with R11,083 and Standerton with R10,808.
The survey has over 900 shopping centres on its database. Those with the most PDM visits are Mapyona Mall (437,000), Jabulani Mall (385,000), Southgate Mall (237,000), The Pavilion (260,000), Westgate Mall (241,000), Gateway (235,000), Vaal Mall (231,000), Menlyn Park (224,000), Canal Walk (206,000) and East Rand Mall (202,000).
This picture, however, changes by province, by area and by suburb. For example, in Pretoria, the majority of PDMs visit Menlyn Park (41%), Kolonnade Centre (17%), Brooklyn Mall (16%), Centurion Mall (16%), Wonderpark (12%).
In the Vaal, PDMs prefer shopping at Vaal Mall (56%), Evaton Plaza (39%), Sebokeng Plaza (32%), Markpark (26%) and River Square (19%); whilst in Durban the top mall is The Pavilion (45%), followed by Westville Mall (33%), Westwood Mall (30%), Pine Crest Centre (28%) and Hillcrest Centre (26%).
"While national or even provincial averages tell a story, the real story is told at local level and can possibly fly in the face of national/provincial averages. Geographical relevance is key for anyone conveying a message," Randall concludes.
For more information, go to www.nab.co.za.
