Change in Consumer BehaviorChange in Consumer Behavior

Implementation

Recommendations/Retailers ResponseValue CompassValue Retail ModelCost Management

Conclusions

Research MethodologyResearch Methodology

RecessionRecession

RecessionRecession

Do we conduct Do we conduct business as usual?business as usual?

Change in Change in Consumer Consumer BehaviorBehavior

Value RetailValue Retail

Managing Managing CostCost

Literature Review Qualitative Research

10 South African Business Leaders (Edcon, Ellerines, Pick ‘n Pay, Woolworths, Mr. Price)

5 International Business Leaders

Quantitative Research 460 consumers with 97% response rate

International in-market immersion AC Nielsen, Leon’s Furnishers, Dominion Distribution & Warehousing,

Canadian Tire and Comet UK

Source IMF DATA Mapper® Dataset: World Economic Outlook (Sept 2011)

Source: Nielsen June 2011 (www.nielsen.com/nielsenwire)

Have consumers changed the way they shop?Have consumers changed the way they shop?

Conducted 460 consumer Surveys in SA including 15 Business execs and Analysts to validate findings in South Africa (July 2011)

Source: Nielsen July 2011 (www.blog.nielsen.com/nielsenwire)

Result: YesResult: YesWon’t go back to pre-recession spendingWon’t go back to pre-recession spending

Have less disposable incomeHave less disposable income

Constantly seeking valueConstantly seeking value

Brand loyalty no longer existsBrand loyalty no longer exists

Customers more informed about choiceCustomers more informed about choice

Yesterday Today Tomorrow

Adapted from J.C. Williams Group September 2011

Value CompassValue Compass

Value Retail ModelValue Retail Model

Business SolutionsBusiness Solutions

Implementation Implementation

Ease

Economical

Experience

Ego0

5

5

5

5

Emotional impact the brand has

on the customer

Emotional impact the brand has

on the customer

Accessibility of stores Accessibility of stores

Refers to an

affordable pricing

structure

Refers to an

affordable pricing

structure

The overall in-

store experienc

e

The overall in-

store experienc

e

Adapted from: Competing in Tough Times by B. Berman 2010

Focusses beyond the

product itself (FAB) –

focusses on solutions

Focusses beyond the

product itself (FAB) –

focusses on solutions

Refers to the positive

consumer experiences

Refers to the positive

consumer experiences

Refers to the final purchase

price consumers

pay

Refers to the final purchase

price consumers

pay

Includes Negative consumer

Experiences

Includes Negative consumer

Experiences

Findings:Findings:Consumer behavior Consumer behavior has changedhas changedCustomers prefer Customers prefer value over traditional value over traditional price discountingprice discountingRetailers need to Retailers need to respond to this change respond to this change or risk becoming or risk becoming irrelevantirrelevant

Findings:Findings:Consumer behavior Consumer behavior has changedhas changedCustomers prefer Customers prefer value over traditional value over traditional price discountingprice discountingRetailers need to Retailers need to respond to this change respond to this change or risk becoming or risk becoming irrelevantirrelevant

Response:Response:Creating a unique Creating a unique Value PropositionValue PropositionGetting closer to Getting closer to your consumeryour consumerGet Smarter, Stay Get Smarter, Stay Leaner and Stay Leaner and Stay ConnectedConnected

Response:Response:Creating a unique Creating a unique Value PropositionValue PropositionGetting closer to Getting closer to your consumeryour consumerGet Smarter, Stay Get Smarter, Stay Leaner and Stay Leaner and Stay ConnectedConnected

KAY RAIDOO, JEREMY BUTLER, MICHELLE NAIDOO, SYDWELL SERAKWANE, RAKESH MAHARAJ, RUDY RICHARDS