The Weekly Wrap: Nick Bradshaw – Connectpoint

Nick Bradshaw with this Week's Wrap.

Daily newsreaders continue to alert us to the ‘credit crunch’. We hear more and more about consumers changing their purchasing behaviours to accommodate restraints on spending. Midstream retailers seem to be hit the worst, and the result has perhaps been most evident at supermarket checkouts. Driving past my local Lidl and Aldi this week, the car park was unusually populated by more than one Porsche and a number of clean, shiny Mercedes. In fact, Aldi reported a 21% increase in sales YOY. Consumers seem to be savvier about how they are spending their money on household and food items, those bundling German bratwurst and lagers into their car boots may have previously selected premium branded beers and the finest selection of organic, free range, hand reared, perfectly formed groceries from their local deli counter. The bottom line is our money has to go further, and we are planning for things to be getting worse not less. Consumers are getting wiser and some of the big players are starting to get a little worried.This also tells us that some brands are possibly not as powerful as they thought they were. They have a limit and, shopping could well be more price elastic than we may have believed. If Lidl and Aldi can start a price war during a credit crunch, then the Big Four are not as powerful as first thought. So, what’s the link with Michael Phelps, our industry and this wrap? Well, tenuously, it’s that I believe that the brands that are going to succeed in this climate are those who have prepared for all eventualities; brands that have got ‘money in the bank’ so to speak. Where a brand has been well enough managed to have sufficient resources to be able to invest in alternative approaches it will survive and prosper, but where it hasn’t had the sense or foresight, and it is under-resourced, sadly, it will struggle. Customer loyalty and share of wallet can still be achieved, but it’ll be harder to earn it.

There is now a fabulous opportunity for well-resourced businesses to steal a huge march on their competitors. We should see fascinating strategic planning, and, hopefully, a lot more creative thinking form both sides of the fence.