Shopper Marketing: The Next Stage In Africa’s Retail Development?

This week’s obituary for Theo Albrecht, the reclusive co-founder of Germany’s hugely successful store chain Aldi, proves there’s money in retail if you get it right. His estate is valued at $16.7 billion.

Theo and his brother Karl returned to a devastated Essen at the end of the Second World War, and were surprised to find their mother’s shop untouched by the bombing. They worked to develop a low cost, self-service model for a grocery store. A store based on a limited stock offering, consistently and efficiently delivered. Germany, indeed Europe, was in the grip of a rigorous austerity culture. Within a decade they had 100 stores. Today there are 8000.

Here in Africa, retail brands are gaining prominence in the brandscape. The South African chains Pick ‘n Pay and Shoprite have advanced northwards. With greater success in Southern Africa so far, but West and East Africa are in their sights. Tanzania, in some ways an economic satellite of the Beloved Country, has been a harder nut to crack. The idea of a retail offering more complex than a small ‘duka’ was very alien indeed. And in this environment Shoprite initially tried to replicate a South African supermarket. Wary Tanzanians walked past its shining glass frontage, and stole a look in. But few dared enter; perhaps they feared abduction to another planet. I met the two gentlemen charged with this retail innovation, and they themselves were refugees from a very specific part of South Africa. They were pale and Dutch, wore branded shirts, and appeared to have cut their own hair. In conversation they admitted to being puzzled by Tanzanian rejection of such a perfect retail model.

That was a decade ago, and I’m not sure they have fared any better since. But in the interim we have seen strong branded retail chains of African origin. ‘Shoppers’ in Tanzania. In Botswana, ‘Choppies’ . In Kenya the behemoth ‘Nakumatt’ ; the cleverly turned-around ‘Uchumi’; and now ‘Tusky’s’.

Last week I shopped in brand new 24-hour Tusky’s store at Mtwapa on Kenya’s Coast. It was clean; the service was slick, and the product range in its three stories impressive. We’re now becoming so used to in-store bakeries that we hardly notice them. But producing that enticing fresh bread smell was certainly an innovation in Mtwapa. And it’s a good example of the emerging discipline of Shopper Marketing.

Global research group TNS estimates that companies will spend US$25billion on this marketing specialisation in 2010. Multinationals like P&G are leading the way with their ‘Store back’ strategy, which obliges their brand teams and Agencies to start their planning at the grocery shelf and work back from there. A reversal of the century-old habit of beginning with mass communication and then ending up at the point of purchase. A change made possible by retail chains doing much of the awareness and demand creation by their very existence.

Shopper Marketing encourages retailers and manufacturers to communicate more directly with consumers. Much effort is now being put into being more helpful to shoppers. Guiding their choices, and acknowledging their different moods. Rushed office workers. Guilty time-poor mums. Bewildered bachelors. Demonstrating that a brand fits your present emotional needs is a new way of defining value for money. Relevance commands a price point.
One of the biggest insights from the new retail environment is that shopping frequency in increasing. More visits per week, and a slowing interest in the big weekly shop (such a shock to the wallet).

So food brands are beginning to suggest ‘ideas for dinner tonight’ rather than just ‘ideas for dinner’. Retailers are creating visual prompts for the staples you forget… like milk. The new mobile technology spreading through Africa will soon offer apps for recipes and shopping list planners.

Market research now has a more important role to play than quantifying retail space and validating product presence. That new task is to paint an opportunity picture for retail marketers.

Leading UK retailer Sainsbury’s used research to discover that most of its customers ‘sleep shop’ through the aisles, making habitual purchases. It decided to break this habit, using celebrity chef Jamie Oliver in a campaign to encourage people to ‘try something new today’. Jamie’s entreaty was supported by simple recipe materials. And directional point of sale material – making it easy to assemble new menus from the shelves. In its IPA effectiveness submission Sainsbury claimed an additional 550 million Sterling Pounds of incremental sales were generated over 2 years.

Shopper marketing uses insights about the consumer in her retail environment, and not in her daily life. Look out for it, at a store near you … soon.

Chris Harrison is Chairman of Young & Rubicam Brands, Africa. This article has been republished with his kind permission

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