When ‘good things’ turn sour: Coles’ shift towards the community isn’t the problem
In response to a piece published on Mumbrella which condemned Coles’ strategic shift towards community work and sustainability, Hailey Cavill explains how the subject choice isn’t the problem, but the way the supermarket chose to communicate it.
Jamie Clift raises an interesting question in relation to Coles’ new advertising campaign – do customers really value a supermarket’s community work over cheap groceries?
As someone who has brokered 50 partnerships worth $40m for companies such as Mondelez, Disney, Seek, Vodafone and many more, as well as commissioning five research reports on the topic of CSR, social good and cause-related marketing, I’d like to offer my perspective which is based on direct experience as well as current research statistics.
The simple answer to whether customers care about or value an organisation’s community work is YES. It’s not the primary reason for consumers to choose a product, service or indeed supermarket, but it is an important part of the overall consideration to shop. Research conducted in December 2017 asked Australians if they have switched brands in the past year because it supported a charity, and 25% of millennials said they had.
25% of millennials switched brands due to the brand supporting a charity? Nonsense. Even bigger nonsense if you’re talking about a household’s biggest monthly expense after housing and transport.
Hailey, I’m sorry, but taking claimed behavior as gospel is naive at best – willfully misleading at worst – especially when it come to claims of social good.
Take any focus group. Everyone says being Australian made / grown / owned is a mandatory in their purchasing decisions. After all, saying ‘I don’t give a shit if it’s chinese, as long as it’s cheaper’ doesn’t sound great. But the reality is that sales show country of origin is less of a concern than claimed, by a long way. We just don’t want to admit it.
In the face of stagnating wages and cost of living increases, the bulk of Australians will vote with their wallet first. Coles has been cutting prices via cleverly playing with their margin mix for eight years and reaped the rewards. However, they have no financially viable place to go in the face of the (still much) larger Woolies cutting profitability to regain some of their lost market share.
This is a hurriedly thrown together attempt to change the game away from price. It won’t fail because it is poorly executed. It will fail because most Aussies think of household budgets before social good.
Dear KGB, yes I was shocked at this too but stats don’t lie. Previous studies have asked ‘would you switch’ and around 70% say they would – this is when looking good comes into it. I think this is a more accurate stat. overall population was around 10%. Millennials really are influenced by social change…just look at the students in the USA. They know how to use the power of social media and their purchase to make corporates be accountable. Voting with your wallet is a good strategy. This was not a focus group it was 1,300 Australians in an online survey where they had no reason to lie. You can scoff at it if you like but those were the stats and my experience also confirms this. Perhaps you are not a millennial or perhaps social good doesn’t influence you. I don’t see many millennials in my local woollies – they are all in the organic health food shop paying 3 times more for their veggies. I agree that this strategy looks hurriedly thrown together. I agree most Australian households (eg Xers) wont be influenced but I disagree – millennials will be. Thanks for your perspective…
I agree Hailey – if one of these supermarket giants started to consider and “change the way their everyday operations and stores are impacting the world” and started behaving more ethically, it would win market share considerably. I also agree that the ad is boastful and doesn’t have any impact emotionally.
KGB I think you are wrong to say that as much as 25% of millenials are switching brands because of social good is nonsense. While we should always approach survey results with caution, brands like “Thank you” and “Who Gives a Crap” are making it easier and easier for consumers to choose social good over price. And it’s millenials that are starting these brands! I believe this is where the biggest impact is coming from – because you can actually track down the impact your purchases are having via their websites. This has got to me much more effective than 10c per purchase going to X charity – as Hailey said, “numbers don’t turn people on”.
Thanks Felicity! yes CSR has to start from the inside. I really do admire Redkite and the Coles for the long term support they have provided its just a damn shame that the ad agency let them down with a bad ad. Happy to send the survey – conducted by respected firm Di marzio – to anyone who wants it. Email me at letstalk@cavill.com.au and I will send!
Take a look at McDonalds and how they promote Ronald McDonald House Charities. It’s all about the kids and the difference the money makes, very different flavour.
If 25% of millennials are switching brands (away from the market leaders) and they represent around a quarter of the population, then you expect to see the leading brands to have had a collective 6%-7% market share decline across all categories. If anything, we are seeing increases in private label brands.
So claimed behaviour is not supported by the data from the cash registers – the point KGB was making.
Hi JG thanks for your comment. The stat shows that 25% of millennials said they had switched brands in the last year due to a company or brands support of a charity. The research does not say away from market leaders…some of the brands that are doing good charity work are the brand leaders like Vodafone and Carman’s. Im not sure what formula you are using for your calculation. I can only comment on what the research says and 22 years of experience seeing company’s promote a charity and seeing sales go up. Good debate!