During a recent Sunday family lunch my nine year-old daughter made the matter-of-fact statement “You know, Coles is better than Woolworths”. Given the speed at which her attention shifts this comment could have been both the start and end of this particular topic. But as it piqued my curiousity I had to ask “Why”; fully expecting the answer to be about a product or two that Coles stocks that Woolworths doesn’t .
So I was surprised by the response “Because they do more advertising”. Again I had to follow up on this. “And why does this make Coles better”? “Because they must have more money” came the reply. And then the penny dropped. In her mind Coles could afford to do more advertising than Woolworths because more people shopped there. Which meant Coles must be “better” as the majority of people had to be right in their choice.
In this one train of thought she had touched on several communications’ theories and concepts, and explained the effectiveness of Coles’ advertising in a way that many pundits in the Australian advertising industry have been unable or unwilling to appreciate.
Putting priority on share of mind
Over the past two years Coles’ advertising has been the work that the industry has loved to hate. Big red hands, rehashed songs from the sixties and seventies, and questionable talent choices are just a few of the things that have been criticised. With “horrible”, “cringe-worthy”, “pure crap”, “tragic”, “annoying” and “cheesy” being just some of the terms used to describe it.
In the first instance what these criticisms have forgotten is the impact of good old-fashioned share of mind; a consideration that is frequently neglected in the search for ‘engagement’ and originality. In the past – before channel planning and engagement planning – there was a simple rule of thumb that to achieve a targeted increase in market share a brand should look for a share of voice 1.5 times greater than share target over a two year period. Estimations are that Coles has 37% of the Australian grocery to Woolworths’ 43%. So based on the ‘1.5 rule’ if it wants to have the same market share as Woolworths (i.e. both with 40%) it should aim for a SOV of 60%.
The problem for Coles is that Woolworths as the larger and more profitable player has deeper pockets. According to Nielsen Ad Ex figures Woolworths’ adspend in January to November 2010 was $89.4 million to Coles’ $71.6 million, and $76.9 million to $62.6 million respectively for 2011. So outspending Woolworths hasn’t been an option.
What it has done instead is to simply make its advertising more noticeable so as to ‘out shout’ Woolworths with its smaller budget. For instance, research by Ipsos for the B&T People’s Choice Awards in the first quarter of 2012 found the ‘There’s no freshness like Coles freshness’ TVC running during the period to have “the highest score achieved of any commercial since the…awards commenced at the start of 2011”. The spot was recognised by 80% of consumers with 91% of them associating it with Coles. A particularly galling outcome for Woolworths given that the ad was an attack on its ‘Fresh Food People’ heartland.
The fact that only 13% found it enjoyable is telling and probably representative of reactions to the campaign in general. While ad liking (of which ‘enjoyment’ is a common driver) is a proven indicator of advertising effectiveness, it is not always necessary. As the Coles’ campaign demonstrates, an intrusive style of advertising can magnify a smaller share of voice to produce a superior share of mind. Where there are just two major players in a market with little real difference between them this can be a key factor. According to a 2012 article in The Australian Coles has seen a “massive jump in brand awareness” over the past two years that has helped it “eat away at Woolworth’s leadership”.
Creating the perception of popularity
Technically the impact of the campaign has probably been not so much about increased brand awareness as it has been about increased brand salience. With the market being essentially a duopoly there would be few Australian consumers that wouldn’t be “aware” of Coles. But what the advertising has done is made Coles the brand that comes to mind first when people think of supermarkets.
This is not to say Coles hasn’t created some level of differentiation. Its $10 meal deals and hormone-free beef initiatives have been unique to the brand. But most of its claims and initiatives have been quickly matched or countered by Woolworths from a dollar a litre milk to the ‘Sports for Schools’ program. While the overall theme has been one of lower prices it is unlikely shoppers really believe Coles to be better value than Woolworths; which reflects the reality of like for like pricing that both supermarkets adopt.
While they may not have set the brand apart, what Coles’ almost constant stream of new initiatives over the past two years has managed to achieve (apart from keeping Woolworths in mainly a reactive mode) is to give it a sense of momentum. You can’t miss that there have been things happening at Coles. Almost every brand equity model includes a ‘Growing more popular’ type of metric because people tend to gravitate to brands that are seen to be setting the pace in their categories.
Woolworths’ not so fresh response
Ironically Woolworths may have added to perceptions of Coles being the pacesetter by running its original ‘Fresh Food People’ commercials (ostensibly) in celebration of the 25th anniversary of the tagline. There was probably the thought that the ads would counter the Coles’ campaign by reminding people about what is at the heart of the Woolworths’ brand. After all, reconfirming a successful brand positioning is the default defensive strategy for a market leader being attacked by a challenger approach. However in the face of Coles forward looking onslaught the use of its old commercials probably just made Woolworths look more stagnant and out of ‘fresh ideas’.
Which explains why Woolworths has now relaunched itself as ‘Australia’s Fresh Food People’ in an attempt to give the brand a more ‘of the moment’ sensibility. The new campaign features real Woolworths’ staff and suppliers – from farmers to butchers – who play a role in getting produce from the field to its customers. There is not a lot of new news in this; apart from the focus on Woolworths’ Australian credentials for those that may have doubted them. What is different is the style of the campaign, an attempt at story-telling with a touch of quirkiness that many ad industry commentators are lauding as “charming”, “beautifully directed” and “polished”. In short it is the type of advertising most creatives like and want to be associated with. And because of this are hoping its results will show up Coles’ ‘crass’ approach.
Time will tell if this is the case. But its comparative lack of attention getting power versus Coles’ will play against it. Currently the campaign is not announcing any new initiatives to draw people’s attention. And what is charming to creative professionals may – as noted by a minority of observers – simply be ‘boring’ for the average viewer.
At the same time the Ipsos B&T survey for the second quarter has found Coles’ most recent TVC to be even more impactful than its previous spots. The ad for its revamped Fly Buys program featuring UK comedian Dawn French achieved a score of 289 on the overall Ipsos index compared to the previous best score recorded for the earlier ‘Coles’ freshness’ spot of 244.
The chances are, in the words of one industry wag, the new Woolworths’ campaign “ain’t going to be causing Coles any sleepless nights”.
Invoking the wisdom of the crowd
Research into the psychology of persuasion and behavioural economics has identified the role of ‘social proof’ in influencing behaviour. People will often just base their decisions on what other people are doing, or what they think other people are doing. This is also central to the popular herd theory of marketing.
The sub-text of Coles’ communications strategy has created ‘social proof’. Getting back to my daughter’s observation that Coles “must have more money”, by sticking with a highly visible rollout of initiatives Coles has given consumers underlying ‘evidence’ they have a more appealing offer. After all, even if you can’t remember the details of these initiatives, if Coles wasn’t attracting more customers how could the brand afford to advertise so much?
So very simply, Coles’ ongoing catalogue of new news – told through its intrusive style of advertising – has been feeding its perception of growing popularity, which in turn has been instrumental in drawing consumers over to the brand.
Coles may not be better than Woolworths as a retail experience. But its advertising certainly has been. For many people this may be all that matters.
Image Credit: Coles Supermarkets