Dangerous middle ground
Sir, Your Focus on Toiletries (October 31) showcased how, with sales falling, it’s even more important for brands occupying the ‘middle’ to show why they should still exist.
Modern consumers will spend £139 on Beats headphones and have to own an iPhone, but they wouldn’t dream of buying a deodorant or shower gel that’s not part of a deal. This polarisation of consumer spending habits is highlighted among today’s demanding, connected, millennial audience. Happy to pay a premium for high-quality, emotionally rich, high-margin products and services, they aren’t so liberal with their spending when it comes to basic, low-cost goods and services.
This shift in the perception of brand value highlights the danger to ‘middle-weight’ products. Consumers want valid reasons for the product to exist in their worlds. Having a high price tag doesn’t convince consumers of good quality, and they no longer accept that cheap equals lower quality either.
One thing is absolutely clear though - it’s simply not viable in today’s market to fall between two stools, or loiter somewhere in the middle trying to be ‘a bit of both’. Brands need to ensure any newly launched product has the consumer at its heart from the very start of the process. If the product is simply a ‘me too’ addition to an already crowded sector, it will fail.
Gareth Evans, business development director, Five by Five
A black day for margins
Sir, Since its adoption in the UK five years ago Black Friday has become increasingly more popular, with 77% of Brits admitting they have heard of it, and 57% intending to shop on the day this year. Sales over Black Friday this year are expected to top £1.6bn, a 20% increase on last year’s £1.3bn. But is Black Friday as lucrative an event for retailers as it is for consumers?
Our research has shown that last year 42% of shoppers brought forward purchases they would have made at a later date, signalling it may not necessarily be incrementally profitable for retailers despite the excitement and attention it generates.
Many consumers are being encouraged to shop due to the excessive discounting on offer, causing retailers to sell products at lower margins. Consequently, discount expectations are high this year with 18.2% of consumers expecting retailers to offer discounts of over 50%. Retailers need to be very careful not to cheat themselves of revenue.
Guy Chiswick, MD, Webloyalty Northern Europe
Get kitted out, mults!
Sir, With the growth and growth of recipe + meal ingredient delivery solutions like HelloFresh and Gousto, it befuddles me why the likes of Tesco and Sainsbury’s don’t get into this business! Rather than offering heavily processed £10 starter + main + dessert offers, why not replicate this type of service.
Sophia Nadur, via thegrocer.co.uk
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