Watch your flirtatious customers in a ‘recession'

Dr Azar Jammine of Econometrix was a co-presenter at the road shows, which aimed to “get to grips with what lies ahead for retailers in 2009 and beyond”, according to John Bowles, joint MD of NAB.

Number of sources

Coburn drew on a number of international and domestic sources to set the background of his discussion, with particular reference to the Ehrenburg Bass Institute, located in Australia. The institute has 50 years of buyer behaviour data including insights into the first six months of the current global downturn, as well as other interesting times during the 20th century - both good and bad.

Coburn says the obvious highlight from decades of buyer behaviour data is how habitual buyers are and that it's the non-regular behaviour in these times that changes. Regular behaviour, like shopping at your favourite store, drinking coffee and entertaining at home continues, although possibly at a reduced frequency or expenditure level. Buying a new appliance, redecorating the home and other irregular purchasing decisions are postponed or even discarded in these negative conditions.

Markets don't stop

However, claims Coburn, even in recessionary times, markets don't stop and South Africa in particular is still going to show small GDP growth this year. The real implications lie in the fact that markets get thinner - there are fewer people buying, they buy less, they buy less frequently and they are value conscious.

The usual concerns for marketers, says Coburn, is that generally marketing budgets are reduced but this is not quite as dramatic as the marketer would believe, as long as your share of voice (SOV) is maintained. If marketers increase SOV, they are more than likely to improve their market share.

The issue that retailers face is that buyers have become so used to top class destinations, with amazing in-store design and qualitative merchandise at great prices, that the buyers themselves 'love them all'. Buyers shop around and are less loyal than they've ever been to retail brands because they all offer the same great reasons to buy. Coburn calls these buyers and browsers 'flirtatious', as they shop at all the category destinations.

Commercial suicide

“But they're loyal and love all of them,” explained Coburn. He warned marketers and retailers that they must be very careful not to define their target markets too tightly, because if they focus too much on the core of their customers, it could be commercial suicide.

As we head into uncertain times, Coburn advises that there must be focus on the entire category of buyers, not segments within it. He explained, “If you're a retailer selling TVs, your aim is to reach all buyers looking for a TV that week, within the catchment area of your store. Your target market is not just your regular shoppers - it's all the buyers in the category. Aim too low and your ads won't be seen by large groups of flirtatious customers!”

Ended with a warning

Coburn ended his presentation with a warning to retailers heading into tighter conditions. He reminded the audience that, as markets get thinner, reach becomes critical because the pool of buyers is smaller than before, yet the retailer's costs remain the same. Not only do they need high reach, but he says, the media budget must spread itself across as many weeks as possible.

For this to happen, he says, high frequency, say an opportunity to see of three times, needs to be cut to one, and the budget spread over as many weeks as possible with the same budget.

In recessionary times he says, purchases are more random and therefore you must spread your message for as long as possible to stand a chance of being the destination of the 'flirtatious' buyer.