FROMTHE CONSUMER... Fromthe consumer...


Every issue,Danielle Pinnington from Shoppercentric tells us howthe consumer is spending to help you stay competitive


Hi readers! Januarywas certainly a bigmonth for retail news stories,with almost daily updates on thewinners and losers at Christmas.


W


hatwas interesting for us however,was not the specifics of thewinners


and losers, but the interesting debate around the Tesco results – was this Christmas all about price or promotions? This is a particularly important


debate formanufacturerswho are supplying branded or own label goods into the supermarkets, as they are essentially the ammunition that the bigmultiples are using in the current pricewar.


Manufacturers have a very clear viewon their recommended price point, and have probably invested a lot of business time and energy in choosing the price that they feel is appropriate for their product. Yet the fact is that if a retailer chooses to sell that product at a reduced price, or a promotion, there is little the manufacturer can do. This powerlessness can have a


real business impact – who could have failed to notice the promotions on tins of Christmas chocolate back in 2010? Shoppers couldn’t believe their luck when they found tins at £5 – effectively half price. And yet the manufacturers felt the effects of


How does it compare to prices


elsewhere?


“Manufacturers have a very clear viewon their recommended price point, and have probably invested a lot of business time and energy in choosing that price. Yet if a retailer chooses to sell that product at a reduced price, there is little the manufacturer can do”


the hangover this Christmas when shoppers had £5 fixed in their minds and wouldn’t buy tins until that promotion was repeated. Suddenly 50 per cent of the value of the segment had been wiped out, because as far as shoppers are now concerned the price for tins is now £5. Whether such price deflation


Do I really need it?


comes through swinging promotions, or price reductions, the risk is obvious. Andwewould argue such deflation ismisguided. Not all shoppers are after the lowest price – if theywere, they would all be ignoring the likes of Waitrose and crowding into the discounters. The key issue,we believe, is around value. Shoppers are looking tomake themost out of themoney they spend,whether they need to because of pay cuts or salary freezes, or because they nowrecognise itmakes sense to. What does this actuallymean


What am I


comfortable paying?


Am I getting the most out of my


money?


formanufacturers?Well, itmeans pushing back against your products being price cut or heavily promoted, and arguing for or creatingmore value based messages. Perhaps solutions promotions that bundle products together, like the Dine in for £10 campaigns inM&S andWaitrose. Or using value based communication, similar to the Fairy Lasts Longer campaign of the 70’s/80’s. These are the kinds of campaigns that resonate with themore prudent and considered shoppers of 2012. The bottom line is that the


shopper’s mind-set has shifted from ‘I want it now’ to ‘do I need it?’. Given the continuing economic situation, this is becoming a permanent shift and is directly impacting on shoppers


According to Danielle, the value judgement has changed as a result of the economic situation - it is more complex than price and results in more considered purchasing


Is it worth it?


Is that what I came for?


value calculations. 


Danielle Pinnington is the founder & owner of Shoppercentric, specialists in shopper insight and trends research. For more information, visit www.shoppercentric.com.


FMCGNews.co.uk | FMCG News | 17


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