South African retailer, Pick n Pay, are currently giving away one Stikeez toy for every R150 spent at their stores.
– Kids are (at this moment in time) mad about Stikeez;
– Parents are being forced by their children (through emotional blackmail) to not only shop at Pick n Pay, but to radically increase their basket size with each visit;
– It is rumoured (we can’t seem to find any published evidence confirming it) that Pick n Pay sales have increased by a staggering 12% thanks to the Stikeez phenomenon.
So on the surface of it, it would seem that the Stikeez marketing case study would conclude with this strategy being awarded, the ‘Idea Of The Year’.
But is it a great idea? Is this style of loyalty program one you can learn from and emulate in your business to encourage radical sales grow yourself?
Firstly, Stikeez were not developed by Pick n Pay.
They are a product of Zing Toys who are headquartered in Hong Kong. They are toy developers who obviously also have a business model where they syndicate their products to business customers like Pick n Pay for use in their loyalty strategies. So it’s not an original marketing idea that was developed in-house, just in case you were wondering.
We’ve established (even without credible proof) that in the short term, the Stikeez idea has generated sales growth, but what are the downside risks of this strategy?
- The promotion is really only relevant to families with kids between the ages of 3 – 10. There may be adults who like collecting Stikeez too, but for the purposes of this post, let’s ignore them and think of them as anomalies. So the market that you are appealing to is relatively small in theory, but perhaps this isn’t too much problem if the rollout of the strategy is affordable.
- The major problem with using children’s toys to coerce adults to spend more money on groceries to keep the kids happy, is that you can potentially create underlying animosity towards the brand in your short-term attempt to boost sales. This feeling of anger could last long after the end of the campaign and ultimately result in decreased sales over the long term.
- What real value are you demonstrating here and what does that misalignment do to the long term perception of the brand? Kids toys have very little to do with efficient supermarket operations. The danger here is that while your competitors are focussing on sourcing quality product, offering value and managing their stores in the most efficient way possible for their primary target market [being adults]; you are concerning yourself with a strategy that has no long term benefit for your public perception.
- Stikeez makes it look like Pick n Pay have run out of proper marketing ideas. Even if that is not the case, the perception we have [and perception is everything] is that they needed something; anything to get sales up. And offering cheap plastic toys works well in Eastern Europe, so why not give this a bash here too?
- Kids are notoriously fickle. What’s hot today is gone tomorrow and what you’re left with is a warehouse of plastic that nobody wants and a permanent reminder in your customer’s homes and dirt bins that the campaign ran too long and now just looks silly.
- What comes next? McDonald’s have done well with happy meal toys because it was a continuous program that worked with their strategy to appeal directly to children. Once the Stikeez craze has died, will Pick n Pay continue to reward higher basket sizes with other toy programs, or is this just a once off? Will parents then gratefully go back to shopping at their preferred supermarket – happy and relieved that the blackmail is over?
Let’s just say that this is perhaps an over-simplification of what the real strategic thinking is behind the Stikeez campaign. What goes on behind the scenes at a world class marketing operation like Pick n Pay is most certainly very well thought out and mapped.
From our vantage point however, Stikeez appears to be a great short term sales booster, but could be majorly damaging for the brand. It just doesn’t package the value of what Pick n Pay has to offer in a way that makes long term brand sense. It unfortunately comes across as a cheap sales gimmick where the customer is ultimately the sucker.
But that’s just our opinion. What do you think?