Business 30.7.2016 09:32 am

How the Little Shop is helping Checkers’ big shop

The retailer seems to be winning the supermarket battle of the freebies hands down.

The last thing I ever thought I’d be writing about is miniature grocery items. Toys. Then again, the last thing I ever thought I’d be discussing with friends (and seeing plastered all over social media) is exactly that! It’s quite remarkable just how much mindshare Checkers has captured this month with its Little Shop promotion that sees shoppers “rewarded” with a collectible every time they spend R150.

The model isn’t exactly new. Trading cards, toys, games, figurines. All designed to drive more visits, bigger shops, perhaps a trip to a store you don’t normally buy from and lots (!) of nagging. Supermarkets spend (“invest”) some money to make (more) money. Or, to shore up sales in a tough economic environment like this where consumers are under immense pressure.

Last year, Pick n Pay’s Stikeez promotion captured a significant share of mindshare (hype?) in the market with shoppers obsessively collecting the strange figurines. In its financial results, the group described the promotion “as a fun thank you to Pick n Pay customers for their custom and loyalty”.

Fast-forward nine months, and we seem to be at peak pester promotion.

Pick n Pay is back with “Super Animals”, a trading card (“Sound Card”) promotion, Spar is offering shoppers Angry Birds-themed cards (“lenticulars”) and Checkers seems to be way out in front with its Little Shop Mini Collectibles. Judging the success of these types of promotions is difficult without hard sales data (which the retailers will obviously not publish), but judging purely from anecdotal evidence and the sheer number of swap groups and posts that have sprung up on social media, Checkers has won this battle hands down.

The “Little Shop” isn’t new. It might be novel in this market, but has had two relatively high-profile executions in New Zealand and Switzerland. Kiwi chain New World has run the campaign, called Little Shop, for three years running since 2013. Checkers’ promotion is practically identical to New World’s (right down to the mini basket, trolley and store front) and one can assume the intellectual property was licensed to the Shoprite Holdings-owned group.

Loyalty specialist UNGA is the brains behind the campaign and it has run in “more than seven countries”. Agency 99, responsible for implementing the New World Little Shop (and follow-up Little Kitchen promotion), says the campaign was designed to “drive incremental sales, increase basket size and encourage grocery shoppers to switch their shop”.

In Switzerland, agency Boost ran MiniMania for retailer Migros. It described it as “the most successful Boost collectibles promotion” for the supermarket group, and cited a 3.2% increase in cumulative sales revenue, 0.5% uplift in traffic and 3.8% jump in average spend.

Given the very strong brand tie-in, and the additional publicity from the ongoing promotion of the mini collectibles, I’d bet that suppliers are paying for the privilege. This might not be a direct payment, but possibly through additional rebates or discounts or marketing “co-investment”.

The companies involved (and their brands) are the big gorillas of the industry: Tiger Brands (All Gold, Beacon, Enterprise, Tastic), Clover (branded milk, yogurt, juice), Pioneer Foods (Albany, Bokomo, Liqui Fruit) and all three global consumer products giants: Unilever (Dove, Flora, Handy Andy, Omo, Robertsons, Shield, Sunlight, Vaseline), PG (Head & Shoulders, Pampers) and Colgate Palmolive (Colgate, Sta-soft). The “outliers” are Simba (Pepsico) and Tru-Cape, with a single product each.

Any collectibles campaign requires investment from the retailer: there is additional advertising and promotion, the cost of producing the collectibles and, almost always, the intellectual property rights. That Checkers chose to run this promotion above others speaks to the shrewdness and ruthlessness executive management have managed to inculcate in the organisation.

Checkers-Little-Shop-4-400x320

A little birdie tells me the promotion is performing very well indeed. Of course, it’s easy to spot the fuller baskets (and kids commandeering their parents’ shop) in Checkers stores. A cashier or two have told me they’ve dispensed boxes and boxes of collectibles in a morning.

In the past few days, according to its online stock guide, its gone from nearly a dozen stores “running out” as at Monday to around 10 out of stock and 60 (!) described as “running out” by midweek. On social  media platforms, Checkers is telling customers that the “popularity of Checkers Little Shop collectables has exceeded our expectations and we did not expect stock to run out so soon”.

The “National Swap Day” slated for Saturday will mark the peak of the campaign, and you can be sure the number of stores out of stock will increase dramatically from next week.

We won’t be able to see the impact of this promotion until at least October when Shoprite Holdings publishes an operational update (for the first quarter) ahead of its annual general meeting. The detail, however, will only really be visible in its results for the six months to December 2016, which will be out in February next year.

That said, anyone want to bet that Checkers won’t make a tidy profit from its Little Shop?

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