PICK N PAY: WILL THE PROF­ITS STICK?

Finweek English Edition - - FRONT PAGE - BY THE FIN­WEEK TEAM

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.)

KID­DIE POWER

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.

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