With Woolworths, Coles and ALDI all playing the “we’re cheapest” card some have questioned whether the campaigns themselves have been cheapened to match the low prices.
Woolworths’ latest campaign by Leo Burnett, featuring reality TV pop star Samantha Jade and two singing animated green birds, arguably the final straw for some.
One industry heavyweight, who spoke to B&T with the guarantee of anonymity, questioned why the supermarket behemoth would “walk away from ‘the fresh food people’ to ‘cheap cheap’”. He added, “it’s an utter travesty really”.
However, he lauded BMF’s creative for budget grocer ALDI. “You only need to look at ALDI’s growth and its store openings to see how well they’re doing and I think it’s becoming a bit of a race to the bottom for the other two. I think Coles and Woolies need to build some more value into their strategy because you can only take ‘down down’ and ‘cheap cheap’ so far.”
He added that Coles’ and Woolworths’ race for the cheapest prices meant suppliers’ margins were being squeezed and it was having an adverse effect on creative budgets .
“I think it (squeezing suppliers) is bad for Woolworths and Coles, it’s bad for all the suppliers and therefore all the vertically integrated suppliers that supply to the suppliers and it’s fucking our industry and it’s going to screw a lot of brands and businesses,” he added.
Adam Ferrier, Cummins&Partners chief strategy officer and consumer psychologist, agreed that Coles had been playing the “cheap card” for some time, while it was relatively new turf for Woolies who typically went for the “fresh” approach.
“If you sell on low price of course you’ll get more sales through the door,” Ferrier told B&T. “It’s also a very highly visible thing to measure against. Consumers and even competitive retailers can measure price against each other and therefore it’s a very tangible message to communicate. Nobody’s ever going to get fired for yelling out a value message because they know consumers will respond.”
Ferrier cites IKEA and clothing chain Zara – both budget brands – that successfully market themselves beyond just being value for money. He says they’ve worked long and hard to build both the emotion around the brand as well as the value message.
“To do that takes long term brand building and consistency and potentially a bit of steel and backbone. It takes time because consumers may not instantly react the way they would do to a brand screaming out low prices with big red starbursts at the end. Do you want to build a brand with emotional value in it over time or do you just want to yell out ‘we’re cheap’?” Ferrier said.
The Monkeys MD Mark Green agreed playing the price card can only get you so far. Green cites The Monkey’s work with IKEA as a budget brand that’s been hugely successful at marketing itself beyond just price.
“IKEA’s all about great design at an affordable price and if you apply that to their communication they actually live that. Their communication is always highly creative and highly interesting and they know what they want to be,” Green said.