Little Checkers

Checkers recently announced that they are bringing back a new collectable series called Little Checkers where with every purchase amounting to R200, you get a Block (which looks a lot like Lego, but it’s not Lego) which you can then use to build your very own small supermarket.

What Checkers have also done this time – as apposed to when they ran the Little Garden promotion – is to team up with brands like WeetBix, Liqui Fruit, Pringles and loads of others to enhance the experience, and presumably, the cost of the exercise too, which I assure you – is not cheap.

Little Checkers started on Monday [6 May 2019] – so I’m sure that parents are already coming up with creative reasons as to why they don’t need to go to Checkers for the third time this week – and will last for as long as the stocks last.

In recent years these collectable campaigns done by the big South African retailers have become all the rage as a tactical marketing tool. On the surface of it they clearly have a short-term sales impact (some estimate that turnover during these campaigns increases by up to 10%). This increase is achieved by an improvement in visitor frequency, but also through an increase in the basket size of each shopper. I would assume that on average people who normally shop at Checkers would spend well less than R200 a time at Checkers, what this campaign does is increase that, at least for the duration of the program.

There is however a darker competitive advantage that, running a Little Checkers promotion at strategically significant times of the year, gives Checkers that I had never considered before.

Retailers tend to measure themselves as to the amount of market share that they command in the local marketplace. So, as an example, a group like Checkers would measure their market share against the likes of Pick n Pay, Woolies and Spar. If at the start of a season – when new stock is in store in all four of those retailers (like a new shipment of winter jackets or vast amounts of vegetable soup) – and one of them can purposefully draw shoppers away from spending their money at their competitors in favour of scoring a cheap collectable character in exchange for a R200 shop, and therefore affecting their competitor’s sales projections for that period; that would have a material impact on the trading performance of their competitors. A financial impact that would be difficult for a competitor to come back from for the rest of the year.

That’s a dark move, and in a marketplace where margins are razor thin – a potentially disastrous one.

What this does also highlight, is that retailers in South Africa are struggling to secure a sustainable competitive advantage. They have all fallen into the trap of having to rely on short-term price and promotional tactics to maintain profitability, rather than innovating ways to build long-term brand value in the minds of shoppers.

So brace yourselves for the new promotion from Checkers – it may look like they’re giving away toys for kids – but this is certainly not fun and games, it’s serious modern day cut-throat retailing at play here.