PICK N PAY: WILL THE PROFITS STICK?
As retailers fight for market share, Pick n Pay recently introduced a seemingly insignificant marketing tool – Stikeez. Shoppers receive these small plastic figurines as reward for every R150 worth of purchase. The real reward, however, is a
believed surge in the retailer’s sales figures.
No one saw it coming. The promotion was off to an unpromising start, with many shoppers expressing i rritation and confusion about the unwanted tat in their shopping bags.
Then came Pick n Pay’s heavyhanded attempts to censor a lighthearted blog by an exasperated mother who wished “drug-resistant chlamydia” on those responsible for introducing her kids to Stikeez. But those only turned out to be temporary hitches in what is emerging as one of the most effective promotional campaigns in local retail history.
Soon the critics accusing Pick n Pay of cynically marketing to children were drowned out by other complaints: Why can’t I buy Stikeez at the till? How come alcohol purchases don’t qualify for Stikeez? Why doesn’t my nearest store have the penguin one? Suddenly, they were everywhere. Stikeez swept through schools, t urning playgrounds into sophisticated trading f loors as children swapped their f igurines to amass complete sets with all 24 characters.
Often, transactions turned nasty and some schools started banning Stikeez, only fuelling their allure. Stores were suddenly full of children, egging their parents on to buy just a little bit more so their purchases would amount to another R150 at the till, to qualify for
another free figurine.
Adults also took an interest, and across the country wine glasses and computers were soon decorated with the suction-cupped stuff. Online buying and selling f lourished, with fans setting up Facebook groups to swap figurines. Some Pick n Pay stores have experienced shortages and many have seemingly sold out of Stikeez display albums.
“It has been phenomenal,” says Chris Gilmour, retail analyst at Absa Wealth and Investment Management. “A quite incredible and very clever campaign, which has taken everyone by surprise.” He couldn’t recall a previous retail promotion that captured the public’s imagination in this way.
“You have no idea how big this is,” a slightly harassed-looking manager of a large Pick n Pay store told Finweek, as he watched children in Stikeezcostumes pose with adoring fans.
“Where a shopper would normally spend R90 on a basket, we are seeing parents adding items to reach R150. And when they have more than one child, the R90 basket becomes a R300 shop.” Given that the wholesale price of a Stikeez figure is in the region of 40c, this is an almighty cost-effective sales bump.
Pick n Pay isn’t the first retailer to use Stikeez, but in some countries the German discount giant Lidl – which ran similar campaigns in a number of European markets – also allowed shoppers to buy the figurines separately at the til l, potentially muting the leveraged impact on sales. (Pick n Pay has in recent days given in to pressure, and will start selling individual units for R4.95 each.)
Why have South Africans fallen so hard for the odd-looking characters? The country’s demographics – almost 30% of the population is younger than 15 – mean that any youth-based marketing campaign will have much greater success than in more mature countries, says Gilmour. Stikeez benefits from ‘pester power’, a marketing term coined in the late 1970s describing how children can inf luence their parents’ shopping choices using one of the most powerful forces in the known universe: constant nagging. In the past decades, parents have become much more obsessed with the happiness of their children than those of previous generations – while at the same time having less time to spend with them, as now both parents are often working. This has given children i ncreased emotional leverage and inf luence over their parents’ spending decisions.
But what really set the Stikeez campaign apart was its unexpectedly broad appeal among other age segments as well, says Sane Mdlalose, senior associate consultant at Aperio, a fastmoving consumer goods consultancy. It was exceptionally popular among young adults, right through to older people who used them as small gifts for grandchildren.
Contributing to the success of Stikeez compared to collectable campaigns in the past are the many more channels available to marketers, says Gilmour. Social media, the internet, apps (Stikeez now also has its own game) have all strengthened the onslaught.
Pick n Pay also made effective use of AdLites, internally i l luminated street signs which were located at key intersections in close proximity to its shops, says Mdlalose.
The success of Stikeez compared to other promotional campaigns is also due to the instant gratif ication and certainty of receiving a physical reward, says Mdlalose. The shopper doesn’t have to take chance on a scratch card, build up credits towards some prize or enter a draw.
Pick n Pay has been lagging with promotions, with Shoprite and Checkers for example running much more effective bulk promotion (two-for-the-price-ofone type) campaigns, says Mdlalose. “But with Stikeez, its campaign execution was exceptional, with stocks mostly replenished in time and staff engaging with clients at the tills.”
In addition, Pick n Pay – probably inadvertently – picked a perfect time to introduce a new craze after the allconsuming loom band phenomenon petered out in recent months.
It may all seem like a bit of fun, but for Pick n Pay the stakes are deadly serious.