Ian Maynard of network: will the supermarket price war be great news for the newspaper industry?

unnamed-3Ian Maynard (left), head of marketing and business development director of London-based creative and production specialist network, predicts a surprise boost for the UK newspaper industry as the leading supermarket chains gear up for a ferocious price war.

 

It’s inescapable that we live in a digital world – in the UK digital has overtaken press and magazines in terms of ad spend and is snapping at the heels of TV – but recent events in the retail world remind us that the world, for many businesses, is much the same as it was.

Product and Price still rule.

All the big UK supermarket chains are rethinking their strategies in the light of a ferocious assault from German-owned discounters Aldi and Lidl; even to the extent of lowering their historic margin expectations and talking down profit expectations from the City.

Price has obviously always been important in retail but there was a feeling, before the financial crisis that began in 2008, that most British consumers had moved on – they were prepared to spend a bit more for better quality.

Back then Tesco moved from its price platform – characterized rightly or wrongly as ‘pile it high sell it cheap’ – to a more rounded offer. And by doing so managed to dominate the supermarket stakes in terms of both volume sales – 30 per cent of the market in the UK – and margin (over five per cent).

Our two German discounters barely figured in anyone’s thoughts. They didn’t have many stores and they were nearly all in the north of England; another world as far as the go-go South East was concerned.

But, come the financial crisis, price began to matter and matter an awful lot. And, even though the country is, finally, pulling out of recession price still seems to matter. Supermarket shoppers have not reverted to the pattern of behaviour many retailers fondly thought they had adopted permanently.
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Product and price in combination – as Morrison’s CEO Dalton Philips pointed out the other day when announcing his future strategy – are the keys to unlocking the purses and wallets of permanently price-conscious British shoppers.

So if that’s the strategy how do you get this message to the public most efficiently?

Well here’s a funny thing. The answer is good old-fashioned print advertising.

Press ads promoting attractive products at competitive prices are still the best way of getting people through the door of those stores – as Aldi and Lidl have demonstrated. Neither offers an “expensive” online facility and both are piling back into press advertising.

And here’s an even funnier thing. What’s the best mechanism for getting the price message across in print in these modern times?

The answer – something that’s been around for 150 years … introducing the product and price display ad!
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We, of a certain vintage, sometimes bemoan the disappearance of supermarket campaigns like Tesco’s famous ‘Dotty’ campaign with Prunella Scales and, in many ways; it would be good to see them come back. But the harsh reality is that the supermarket war, now more intense than ever, is being fought on product and price.

Whilst retailers prototype new virtual stores, in-store augmented reality and pursue Omni-channel marketing and so on, a positively 2D device loved by Victorian emporium owners onwards (above) is still their chosen means of promoting products and prices.

Of course technology has a growing role to play even in this most traditional of media markets. The ads that my agency, network, produces for retailers are formatted to work just as well on mobiles and tablets and we can already envisage a world where shoppers routinely scan a press ad (or poster) go through to a website and make their purchases there and then.

However whilst the fully digitised customer is getting closer, the way of reaching them in the first place will be paper-based for many years to come.

Perhaps that long-term patient, press advertising, is seeing the first signs of a surprisingly robust recovery.

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