What’s new Jan-Feb 2013

The Rise, Fall and Rise of Valentine’s Day in Australia

With Valentine’s Day just passing, we thought it might be timely to reflect back on its long tradition in Australia. It hasn’t been all roses, so to speak. But its near death over a hundred years ago contains some interesting lessons about brand integrity.

St Valentine’s Day draws its name from two Christian martyrs thought to have been killed on the 14th February. While there was no link between these Saints and romance, there was a Roman pagan fertility festival, the Lupercalia, held annually on the 15th of February.

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When the Christian fathers substituted Saints days for the old pagan festivals, the Lupercalia’s rituals marking the return of spring were shifted to the 14th of February which was named St Valentine’s Day. Over time the Day evolved into folk rituals celebrating courtship, love poetry and, amongst the aristocracy, gift giving.

The beginnings of the modern Valentine’s Day emerged in the late 18th century when the first commercial Valentines were produced. They were sent as demonstrations of not just romance but affection, with children and family members all looking forward to receiving cards.

Valentine’s Day practices spread from Britain to North America and Australia in the early 19th century. Cheap postage and mass production techniques brought a boom in the 1840s and 1850s. In the late 1860s, just one establishment in London manufactured over 1,500,000 Valentines. Immediately after February 14th, new designs were commenced and unsold stock was packaged up and shipped to the colonies, including Australia.

For weeks before Valentine’s Day Australian shop windows were filled with a wide range of Valentines, from refined, expensive presents, through to glaring paper caricatures. The latter, though, were to be Valentine’s undoing.

A custom emerged of sending insulting caricature Valentines. All manner of characters were depicted: the loafer, the untidy housewife, the old maid, and so on. Someone thought to drink too much, for example, might receive a card depicting a red-nosed man leaning against a lamp-post. While these were often treated as a bit of fun, for the respectable middle-class they appeared vulgar, immoral and uncharitable.

The practice became so offensive that Valentine’s Day died out. From around the 1890s through to the 1920s there was almost no commercial activity surrounding Valentine’s Day in Australia. It was, however, retained in popular memory, and by the 1930s, there were attempts by retail entrepreneurs and confectionary manufacturers to revive its fortunes.

By the late 1930s shop windows were again displaying valentine paraphernalia including boxes of sweets, cigarettes and handkerchiefs, and while romance was invoked, there were again numerous tokens and missives of friendship and goodwill to distribute amongst friends and family.

Wartime restrictions limited the supply of cards in the early 1940s, but popularity for Valentine’s grew, influenced by American servicemen who (much to the annoyance of Australian men) had no qualms pursuing romance through consumer spending.

In 1957, the Journal of the Retail Traders’ Association of NSW urged retailers to “Make Love Official”, and “convert Valentine’s Day from a half-hearted promotion that seldom rises much above the level of card sales, into something approaching the large-scale exchange of gifts achieved in America.” There was some success and Valentine’s Day again became established in the retail calendar.

Gift giving on Valentine’s Day grew in popularity during the late 1980s. Through the 1990s, men’s and women’s intimate apparel became more popular and women became greater spenders on gifts. Retailers from a broad range of product categories made more effective use of Valentine’s Day as a marketing event, which saw sales grow at between 5 and 10 percent a year.

By the early 2000s, Valentine’s Day was challenging Father’s Day as the fourth biggest event in the retail calendar and Australians were spending $40million on confectionary gifts. Total expenditure linked to Valentine’s Day in 2002 was around $100 million. This grew to almost $900 million in 2008, although tighter consumer spending after the GFC has tended to slow further growth.

The rise, decline and rise again of Valentine’s Day shows the importance of brand integrity. The corruption of the brand through mean and petty product offerings in the late nineteenth-century, which contradicted the ideals of love and affection associated with the Day was a marketing disaster. Its revival took years of hard work, marketing and advertising, and only recently has it blossomed again into a major event in the retail calendar.

Cut Through Marketing, Out of Home

We hear a great deal these days about the ascension of online retail. It’s clearly brought significant structural change, and there are few retailers who can afford to ignore its influence. Most commentary, though, doesn’t travel beyond fairly standard clichés: the convenience of 24/7 shopping; the quality, price and range of online products; the need for bricks and mortar to invest in service, to recreate the magic of retail, to make shopping experiential… and so on.

But after thousands of column inches devoted to these topics, what else is going on? How is shopper psychology changing as a result of these macro changes? As an example, how have shoppers responses to marketing changed over the past 2 years?

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Directional Insights 2013 Australian Shopping Centre Benchmarks offer new insights.

As you would expect, since our last Benchmarks in 2011, awareness and preference for online marketing is up, particularly for customers of regional centres. But compared with traditional media it still has a relatively minor hold on the consumer’s mind.

There are changes, too, in traditional media consumption. Marketing awareness of shopping centre newspaper advertising has dropped from 30% to 22%, and preference for it as a source of information about centre events and specials has declined from 27% to 23%. Awareness of letter-box drops, at 15%, is 6% lower than in 2011, and awareness of centre colour catalogues is down from 12% to 9% – although preference for these forms of advertising remains steady at 26% and 12% respectively.

Where we have seen steady growth of awareness is in out of home advertising. With the physical world increasingly saturated with online marketing and entertainment, the visceral presence of immediate, often large-scale advertising is cutting through. What’s more, consumers want more of it.

Awareness of in-centre signage has grown slightly from 6% to 7% and preference for it from 4% to 7%. Awareness of, and preference for in-store advertising, billboards and bus panels have also all grown.

Out of home advertising is a significant avenue of communication with customers of Neighbourhood centres. Directional Insights 2013 Neighbourhood Shopping Centre Benchmarks echo the upward trend shown in the overall Benchmarks, but start from a higher base. Awareness of in-centre signage in Neighbourhood Centres, for example, rose from 10% to 12%, with preference for it increasing from 11% to 13%.

The other marketing trend that has emerged is a general decline in overall awareness of shopping centre advertising: 45% of customers are now unaware of shopping centre marketing, compared with 37% two years ago.

This again suggests a lack of cut through in an increasingly saturated market, of which the rise and rise of online activity is central. With information at so many fingertips, grabbing attention is increasingly difficult. This leads back to experiential retailing.

We’ve been talking for a while here at Directional Insights about the simple things that go into making a satisfying customer experience. Marketing is a part of this, and while traditional media still dominates, out of home shopping centre advertising has an important role to play. In an overloaded world, simple, direct messages in formats strongly differentiated from online will increasingly offer effective signposts in the psychological landscape of the new consumer.  

The Heart of the Community

When Westfield Chatswood opened in November 1987, it launched a marketing campaign entitled ‘The Shopping Heart of Chatswood’. The campaign won a BOMA NSW Excellence in Marketing Award and raised $158,000 for the Heart Foundation.

Its central idea was traditional – retail sits at the core of the community; it provides the social and economic lifeblood of the neighbourhoods it serves.

The title of a recent British Council of Shopping Centres (BCSC) report – Shopping Centres: At the Heart of the Community – echoes Westfield’s insight 25 years ago. Not that Westfield was the first to make such a claim, but to conjoin such a worthy charitable cause with their own centre as the beating heart of the community (when at the time they were involved in a bitter rivalry with Chatswood Chase), was marketing genius.

Retailers have always been a part of their community. It has been a symbiotic relationship, each supporting the other. Shopping centres took it further by providing strategically tenanted environments that were large enough to double as public social space. Throw in car parking, air-conditioning etc. and the rest is history. There was a period of time, though, when competition and investment priorities left community engagement behind. Now, with the combined challenges of post-GFC consumer sentiment and the rapid rise of online retail, community engagement is more important than ever: localisation is a powerful counter to the global reach of online competition.

The BCSC report recorded a number of benefits flowing from community engagement. It noted that centres benefited from:

  • Greater customer loyalty
  • Better occupier engagement
  • Positive media coverage
  • Reduced anti-social behaviour

Local communities benefited from:

  • Increased confidence and self-esteem
  • Improved health and well-being
  • Improved attitude to and engagement within schools
  • And again, reduced anti-social behaviour

Many Australian shopping centre owners are already making concerted efforts to engage further with their communities – and reaping the benefits of doing so. GPT’s Stephanie Alexander Kitchen Garden promotion is a high profile, successful example.

Community engagement by shopping centres has similarities with customer service for retailers: it’s the connection through which customer loyalty is fostered. It’s also a highly visible sign of positive corporate citizenship which reaps benefits across the whole organisation. A number of companies are talking to us about how to engage further with their local communities. If you would like more information about conducting research to develop community engagement and marketing strategies, feel free to contact us at any time on 1300 138 651 or info@directional.com.au. [/spoiler]

The Buzz

Since 2007, Directional Insights has been producing a biennial series of Australian Shopping Centre Benchmarks, providing an industry standard for consumer behaviour in the country’s shopping centres.

We’re excited to announce that our latest series, based on the analysis of detailed interviews with approximately 26,000 Australian shoppers, will soon be released. They provide a valuable window into Australian consumers’ current shopping behaviour and motivations.

The following reports will be available for order. They will also be integral to our analysis when we conduct research on individual centres:

  • Neighbourhood Centre Benchmark Report 2013
  • Sub-Regional Centres Benchmark Report 2013
  • Sub-Regional Centres Single-DDS Benchmark Report 2013
  • Sub-Regional Centres Double-DDS Benchmark Report 2013
  • Sub-Regional Centres Metro Benchmark Report 2013
  • Sub-Regional Centres Non-Metro Benchmark Report 2013
  • Regional Centres Benchmark Report 2013
  • Australian Shopping Centres Benchmark Report 2013

Directional Insights will be presenting on the latest trends in consumer behaviour revealed in its Australian Shopping Centre Benchmarks in March and April 2013. If you would like to make an appointment for a presentation, please contact Isabella Johnston: isabella@directional.com.au.

Insights into Mission and Leisure Shopping Patterns

Since the 1950s, market researchers have been exploring shopper motivation. All manner of shopper types have been described: the ‘Pragmatic’, ‘Demanding’ or ‘Relaxed’ shopper; the ‘Economic’ or ‘Recreational’ shopper; even the ‘Dedicated-Fringe’ shopper.

There are two problems with this academic research. One, the motivational segments become too complex for use in the real world. Two, researchers focus on the psychology of consumers while their actual shopping behaviour gets ignored. The solution is to simplify how we categorise shoppers, and then map in depth their behavior inside shopping centres.

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When conducting customer exit surveys in shopping centres, we ask shoppers whether their trip is Mission focused – ‘I was here for a specific purpose’; or Leisure oriented – ‘I took my time and enjoyed the experience.’

Understanding who comprises these two ‘types’ and how they shop can help retailers and developers effectively shape the shopping environment, enhance patronage by efficiently catering to shopper’s needs and expectations, and target marketing and promotional strategies.

At the centre level, a higher than average number of Leisure shoppers can reflect a particular demographic, such as a trade area containing more retired or superannuated residents than the norm. High Mission shopper numbers likely reflect the surrounding market, but may also indicate that a centre is not operating to its full potential. An inadequate food catering offer or limited social ambience, for example, might position it as a ‘get in, get out quick’ shopping environment.

Clearly the type of centre is a big influence. Neighbourhood centres with a strong non-discretionary focus have a higher percentage of Mission shoppers (79%) than Regionals (66%). Inversely, Regionals, as hubs of social and recreational activity, and with a comprehensive range of stores catering to discretionary spend, attract a higher percentage of Leisure shoppers than Neighbourhoods. Sub-Regionals sit between them.

Mission and Leisure shopping patterns also provide information about the industry more broadly. One of the many post-GFC changes in shopping behavior was the increasing percentage of people conducting Mission shopping trips. Directional Insights’ 2013 Benchmarks show a leveling off of this trend suggesting that efforts marketing activities may be starting to pay dividends.

One of the other things we can do with an industry wide analysis is profile Mission and Leisure shoppers. Who are they? How do they behave in centre?

Because different centre types cater to different shopping needs, it’s best to conduct such profiling on one centre type. Neighbourhood centres with strong supermarket anchors are less complex than their larger cousins. The best Regionals are performing well. So let’s take Sub-Regionals, which can get caught in the middle.

In 17,800 customer exit surveys conducted by Directional Insights in Australian sub-regional shopping centres for our 2013 Benchmarks, 72% of consumers identified their shopping trip as ‘Mission’ focused, compared with 28% conducting a Leisure shop. Now while the same person might be a Mission shopper one day and a Leisure browser another, some market segments are more inclined to conduct one type of trip than another.

Time pressures and lifestage are obvious predictors of shopping approaches. Leisure shopping trips are more common amongst those with more time available such as those who are retired or superannuated, engaged in home duties or studying. Single people are also more likely to conduct a Leisure shopping trip than those in relationships.

Mission Shoppers are more likely to have higher household incomes and be in higher status, time-demanding employment. The imperative of efficiency leads them to greater car usage, more localised, frequent shopping, and smaller shopping groups.

Even though the average spend of Leisure shoppers is higher than Mission shoppers, they have lower average household incomes and lower average rates of paid employment.

While shopping trip types are also heavily influenced by intended expenditure – the most obvious being the targeted food shop – an analysis of Mission and Leisure shopping trip behavior reveals insights about industry trends, the trade areas and performance of particular shopping centres, and consumer behaviour, all of which should be leveraged in marketing strategies and the design of retail environments.

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