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Tuesday, 30 August 2016 07:06

At what point is South Africa ‘malled out’?

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‘Going to the mall’ in South Africa has become a lifestyle activity as well as a shopping necessity. But for how long can we keep building new malls and expanding existing ones? This is one of the questions examined by a cover story in the August-September 2016 issue of the ‘IMM Journal of Strategic Marketing’. The story analyses the country’s strong mall-based consumer culture. Recognised malls (30 000 sq. m and up) in SA now number more than 160, with a combined retail space of over 8,5-million sq. m – one of the highest in the world. Two decades ago SA had only 36 malls with a combined retail space of 1,9-million sq. m. Given the frenetic pace of mall development, the question is: has the sector reached saturation? The answer is both ‘yes’ and ‘no’. “You have to look at supply on an area-by-area basis,” says property analyst Neil Stuart-Findlayson. “Pretoria, Klerksdorp and Port Elizabeth are examples of oversupply.” Where new malls are not being built, existing ones are expanding. The 36-year-old Menlyn Park Shopping Centre in Pretoria East is an example. It is adding 50 000 sq. m which will take it to 178 000 sq. m. Looking at the long-term potential for malls, research firm Urban Studies is optimistic. Population growth and increasing disposable income will drive demand for an additional 1,5-million to 2-million sq. m of retail space over the next eight to 10 years, it predicts. Right now, though, the pace of mall development is falling sharply, with major mall owner Redefine Properties confirming it has shelved two developments due to inadequate returns and concerns about waning consumer demand. Also in the August-September issue of the magazine is an analysis of the brandy industry’s urgent need to rebrand itself, a breakthrough in the measurement of out-of-home media, and a look at brand strategies in the franchise sector. Published five times a year by the Institute of Marketing Management, the ‘IMM Journal of Strategic Marketing’ is available in print and digital formats and is read by professional marketers and those working in related fields, as well as business executives and IMM students. The print edition sold in selected CNA and Exclusive Books outlets, or is available via subscription. Copies are also distributed through a targeted professional mailing list and through selected airline lounges and the IMM Graduate School’s student support centres.
A touch of nostalgia, it seems, is never out of place in a marketing campaign. Glass manufacturer Consol certainly seems to think and has unveiled a campaign that harks back to the days when a milkman delivered fresh milk in glass bottles to many homes in South Africa. For the uninitiated (or those too young), consumers placed a plastic token in each of their empty milk bottles, left them outside the door or gate – and in the morning lovely new bottles of fresh milk were waiting to be added to the morning tea or coffee. It’s an idea that now seems quaint in an era when anything left outside your property is likely to be stolen before dawn! Consol’s campaign – dubbed #BringBackPure – has seen glass bottles full of milk being delivered to selected homes of surprised consumers in Johannesburg and Cape Town. As an added twist, those who receive a bottle can also nominate a friend to be given one as well. The idea isn’t to promote a return to the ‘old days’ of milk delivery, but to emphasise that things taste better in glass. “Put it in a glass bottle and suddenly it’s more delicious, fresher and dare we say, more magical,” the company says. “There’s just something special about glass. It keeps what’s inside it cooler and fresher; and because it’s pure packaging it contains no chemicals [and] so it never alters the taste of its contents.” Consol’s campaign has involved bloggers and social media, as well as traditional media. Many consumers have taken to the brand’s Facebook page to share their own memories of having bottles of fresh milk delivered to their home.
Social media marketing has become not only a fundamental interactive communication channel, but also a pillar of distribution for the retail industry. As a result, many brands use social media to drum up engagement and purchases. Most brands, therefore, try to maximise their follower bases with the idea that the more followers they get, the more interaction they will inspire and the more their sales will grow. But according to Matteo Altobelli – a European business consultant writing on the website of the Insead international business school– there could be a limit to the effectiveness of social media once a critical mass has been achieved. He cites a study of 51 international Italian shoe brands, which ranged in size from niche craftsmanship brands to large manufacturers with massive revenues. Each brand had a presence on an average of three social media networks, with Facebook and Instagram being the most popular platforms. The brands posted on these platforms once every working day, on average. The study found that the relationship between followers and brands intensifies as people move from passive follower status, to investing time in viewing, ‘liking’ and then commenting on a given post. However, once 50 000 followers are achieved, engagement plateaus and tapers off. This can be explained by two factors. Firstly, niche brands focused on craftsmanship get a more devoted following because their customer base makes an active effort to ‘join’ their brand on social media. Secondly, brands with a very high level of awareness are considered as ‘must follow’ by consumers, but they do not necessarily engage deeply with the brand. The answer for big brands is to engage more with their existing followers, rather than actively seeking new ones. Small brands should seek slow, organic follower growth.
Econet Wireless, the mid-size African mobile network, is to pre-install ad blocking capability for approximately 40-million subscribers across Zimbabwe, South Africa, Burundi and Lesotho. Econet and its technology supplier – Israeli-based Shine Technologies – said in a media statement last week that this would be the first network-level ad blocking on the continent. While individual smartphone users can download their own ad blockers, it is still uncommon for mobile networks to supply this to all customers, although a network in the Caribbean and another in Europe already do so. According to Econet Zimbabwe CEO Douglas Mboweni, the deal will help customers save on their data costs. “We are delighted that we have taken the lead in ensuring that customers have control of unsolicited ads,” he said. “This will lead to quicker-loading and cleaner-looking Web pages free from advertisements, [as well as] lower resource waste in terms of bandwidth and memory. This goes a long way in solving the issue of ‘bill shock’ resulting from unsolicited adverts. In addition there are privacy benefits gained through the exclusion of the tracking and profiling systems of ad-delivery platforms.” Ron Porat, Shine CEO, added: “[Advertising technology] abuse is a global phenomenon and, in Africa in particular, it is devastating to consumers’ limited data plans.” Under the terms of the agreement the first roll-out will take place in Zimbabwe, with ad blocking coverage turned on automatically for all subscribers. All remaining Econet Group regions – South Africa, Burundi and Lesotho – will follow. “The deals come as the growing worldwide popularity of ad blockers has locked the media and advertising industries in a heated battle with the makers of the software that drains their revenue,” noted ‘Mashable’ the US-based digital media website. It called Shine Technologies “a long-time tormenter of the ad industry”.
Wednesday, 24 August 2016 08:37

Sponsors dump disgraced Olympic swimmer

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Big-name brands such as swimwear maker Speedo and luxury fashion company Ralph Lauren have moved quickly to distance themselves from top US Olympic swimmer Ryan Lochte after a scandal in Rio de Janeiro in which he falsely claimed to have been robbed at gunpoint. Lochte has also lost lesser-known sponsors such as Airweave, a Japanese mattress manufacturer, and Syneron-Candela, a skin care company. According to a report by Reuters news agency, all major sponsors have now severed their ties with him. “Sponsorship and endorsement deals typically include ‘morals clauses’ that allow sponsors to terminate deals early if they feel the athlete has behaved poorly in public,” Reuters said. The 32-year-old is the second most decorated male swimmer in Olympic history after Michael Phelps and has 12 medals, including six golds. Lochte and three team-mates were involved in a drunken altercation over alleged vandalism at a petrol station in Rio. He then falsely claimed to police that they had been robbed at gunpoint. Commenting on its decision to discontinue sponsoring Lochte, a Speedo spokesperson told the ‘Financial Times’ newspaper: “While we have enjoyed a winning relationship with Ryan for over a decade and he has been an important member of the Speedo team, we cannot condone behaviour that is counter to the values this brand has long stood for.” As part of the decision to end its relationship, Speedo will donate US$50 000 of the swimmer’s fee to a Brazilian charity called Save The Children. The ‘Financial Times’ noted that the controversy would be a particular blow to Lochte. “Athletes so closely associated with the Olympics – but without global renown such as sprinter Usain Bolt – often only have a short window with which to win potential endorsements,” it said.
Kenya’s youth market – which accounts for around 32% of the population and 60% of the workforce – is economically highly active and continually driving change in the marketplace. Among these changes is the growing use of social media influencers as key drivers of Kenyan marketing campaigns. Specialist youth and family research agency, Youth Dynamix, says its studies show that 42% of the country’s young people are accessing the Internet daily, mainly to interact on social media platforms such as Facebook and Instagram. Increasingly, youth-related events are now being marketing solely via digital channels and many are sold out. “This online infiltration and reliance demands that brands become active in the youth’s space,” the agency says. “But, it’s not just being active that counts. [Young people] demand customised solutions, to be engaged and to form part of the campaign and the brand.” Therefore, companies that give young Kenyans a strong voice by enabling them to create digital content are more likely to win over this demanding audience. Encouraging the writing of online reviews – particularly of electronic goods – is one such example. Peer reviews of this nature can become a trusted source of product recommendation. Another notable trend is that gimmicky marketing give-aways are becoming less impactful, while well thought-out lifestyle improvement (CSI) initiatives that make a sustainable difference in their community are respected by young people. “It’s becoming ever more evident that the youth’s needs are continuously changing because of their heightened level of exposure. To remain in tune with the youth, brands need to play in their space without being intrusive,” notes Youth Dynamix.
Despite the high cost of data and the relatively small number of South African consumers with smartphones, video is increasingly being used by local brands as a marketing tool and a way to tell unique brand stories. One of these is auto giant Mercedes-Benz, which has produced a series of short local films to promote its GLS range of sport-utility vehicles (SUVs). A total of five films have been produced, each suitable for broadcast on social media platforms. Called #EveryTerrain, the company says the campaign aims to create credible, character-driven content that is engaging to a broad audience. “We’re highlighting the encompassing beauty of our country and bringing home what South Africans love about our lifestyle while we position Mercedes-Benz SUVs as the best on every terrain,” explains Selvin Govender, Marketing Director for Mercedes-Benz Cars. Filmed in a reality/documentary style, the campaign takes a duo of unlikely characters and asks them to travel in the GLS to an interesting part of southern Africa. Within 48 hours they also need to combine their talents to produce a one-of-a-kind creative work. The latest video – released this week – pairs legendary trumpeter, composer and singer Hugh Masekela with J’Something, frontman for chart-topping band MiCasa. The musicians explore the spectacular Tsitsikamma region on the Garden Route and create an original song called ‘Heaven in You’. In a recent article, ‘Forbes’ business magazine calls video marketing “the next big thing in business”. The publication advises marketers: “Your strategy should always revolve around people not products. Yes, it’s important to explain your products, but if you are not creating a compelling story behind it nobody is going to care. People identify with other people not objects.”