Seeking opportunities as marketing stalls

FMCG campaigns have been a casualty of the COVID-19 pandemic, with research showing the extent of damage to the retail marketing sector. Where to from here?

By Shop! ANZ General Manager Carla Bridge.

Carla Bridge

Retail, and supermarkets in particular, have been the subject of much prominent coverage in the past few months but with little focus on the marketing that goes on behind the scenes to make it all happen.

For retail marketers across Australia and New Zealand, the impact of the pandemic has been profound. This is supported by research conducted in the second half of April by Shop! ANZ.

We asked brands, retailers, POP producers and retail marketing agencies how they were faring throughout the COVID-19 restrictions. What we found was that most businesses across the sector have been hit pretty hard.

More than 30 per cent say they are severely suffering, with 45 per cent indicating the impact has been less severe but are still not faring well.

There are a few lucky ones. Just over 10 per cent of those surveyed have seen a positive impact from COVID-19 restrictions. Around nine per cent say it’s too early to call.

When it comes to the effect of cancellations and deferments of planned business on finances, 39.7 per cent say these have been serious but manageable, and a further 27 per cent say this is a very serious issue for their business. Nineteen per cent indicate there will be no future impact on finances, with the balance saying it’s too early to tell.

Business drop infographic

So, just how many FMCG campaigns and how much business has been lost in the past six weeks? The average drop in business activities in retail marketing in Australia and New Zealand has been 41 per cent, according to the research, with around 43 per cent of business campaigns postponed or deferred.

At this stage, we’re seeing that most of these activities have been tentatively placed on hold, with the bulk of those planned set to be gearing back up around September, although it’s much harder to plan when not knowing how shoppers may be thinking and behaving following COVID-19.

How are shoppers responding?

According to the Toluna and Harris Interactive COVID-19 Barometer, in the first two weeks of May, 79 per cent of surveyed Australians shopped in a grocery store, and just 20 per cent shopped online.

Deferments finance chart

Once they were in stores, when it came to items such as toilet paper, 45 per cent of shoppers said they were willing to buy a brand different to their regular choice if that was unavailable. For alcohol, another big mover from shelves, 37 per cent said they would buy a different brand, but not a different type, and there were similar results when it came to soft drinks.

This opens up new opportunities for brands to be trialled by customers, with 29 per cent of shoppers having tried a new product when their regular item was out of stock. With a captive audience, it’s a great time to trial new products.

When it comes to pricing, 52 per cent have paid more for a grocery item, and only six per cent have paid less than usual, while 68 per cent have left their money in their wallet when they couldn’t buy the product of their choice.

New opportunities for marketers

With all this in mind, some clear opportunities are available for brands, retailers and retail marketers right now.

How effected graph

With displays likely to be out of stores for the next few months along with experiential campaigns, the formats of choice to stimulate sales and provide an immediate impact are on-pack promotions and path-to-purchase activities.

Off-location displays – if you can get them – are a great way to boost sales. The reinvention of categories is also an opportunity, with many categories having remained the same for 10 years or more. Then there are creative responses to measures such as sampling, for example with sensor activated testers.

In Australia and New Zealand, brands have always been slow to embrace digital and online, but I think we’ll see them a lot more willing to incorporate this in their plans, even after COVID-19.

Another opportunity is the repurposed occasion. With lots of the traditional occasions on the calendar succumbing to COVID-19, recreating these lost celebrations in a new way, or creating new ones that can become traditions and repurposing to make them relevant are just a few of the ways to transition back to normal, or our new normal.

 

About Carla Bridge and Shop! ANZ

Carla Bridge is General Manager of not for profit retail marketing association Shop! ANZ (formerly POPAI). Shop! provides a range of membership services for retailer marketers in addition to the annual Marketing at Retail Awards. Carla has more than 15 years’ experience in the Australian retail and FMCG industries. Before joining Shop! ANZ, she was head of media and communications at the Australian Retailers Association.

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