Coffee as the thin edge

Pick n Pay is starting to gain some useful insights into customer behaviour and purchasing decisions at different stores. They’re using coffee as a key product to better understand who buys what, where and when.  They’re tossing out (more likely de-emphaszing) LSMs as a method of categorising customers and moving to more sophisticated measures (including whether the purchaser has children or not, but also I’d expect location, purchase frequency, average basket size, mix of goods etc.)

Pick n Pay had to spend a fortune on the Smart Shopper system and has ongoing expenses in terms of rewards and analysis. The curious thing for me is how many loyalty cards incur the system and reward costs for retailers, but without gaining the full benefit of analysis and thus insight into customers.

I don’t get tailored book suggestions from Exclusive Books. They also haven’t tried to entice me back to their stores since I started buying first from Bookfinder.com and then almost exclusively ebooks from Amazon. They’ve basically lost a customer and haven’t done anything about it.

Even my friend’s St Elmos offers sweet deals to customers who haven’t ordered in a while to entice them back. Pick n Pay turned sub R100 pm customers into R350 pm customers (at least while the special was one) by specifically targeting customers that are familiar with Pick n Pay but need a push to become regular, high-spending customers.

I haven’t had a movie card with Ster Kinekor in a while, but I always use the same email address and credit when I purchase tickets online (which I do almost universally). There have been periods of several months where I haven’t gone to the movies, but no attempt from Ster Kinekor to woo me back with free popcorn or a careful movie recommendation.

Retailers are missing a trick to get an edge over their competitors.

 

More on readers and the future

Earlier I posted about some of the changes to the market for e-readers.  If you’re interested, you should also read these two stories:

Interview with Koos Bekker (Naspers) on the impact of the iPad for old-school print media.  The interview covers a range of topics – iPad is covered about halfway down.  He seems really positive about the prospects, and confirms my thoughts on the prices for all these devices coming down quickly.

Then, as much as Kindle has been a huge success, it looks already to be in danger of being surpassed as a book-reading-device by the iPad.  The survey of ebook readaers showed Kindle’s market share down from 68% in February this year to 47% in November, while Apple’s iPad has come from non-existent in February to 16% in August and now 32% in November.  On this trajectory, the iPad will be the biggest ereader device by the end of January next year, depending on what happens with Christmas sales.

The iPad has also just been made available to another stack of European countries, pushing likely sales up further.

So, if the iPad is taking over the world as an ereader, shouldn’t we all be considering what this means for our businesses and our interactions with customers?

e-reader (reader) demographics changing

Bain performed research on current and likely future demographics of e-reader users.

The current situation:

early adopters of digital reading devices and multipurpose tablets mostly are already heavy readers. In numbers, they are more often men than women. They also describe themselves as more affluent than average and tend to be in their 20s and early 30s. This group values the flexibility of reading in different settings and the new devices’ ease of use

Their view of the future:

Readers who told us they are considering purchasing digital devices in the near future are mostly women and are older than 35 years of age.

and

Books won’t go away any time soon. Several indicators from the study show why. First, respondents who have adopted digital formats say they continue to read printed books. This attachment to paper formats also holds for younger generations, even though they were born in the digital era.

Some of this makes sense to me. Obviously my own direct experiences are of South Africa rather than the developed markets surveyed by Bain. I see more and more Kindles on JHB-CPT flights, exactly the demographic that can afford and most values the portability of the Kindle.

It’s fairly obvious that heavy readers will be more likely to purchase an e-reader since they would be more likely to purchase books, read books and ultimately see the value in an e-reader, so no surprises there. The youngish demographic also makes sense as early adopters are typically younger and less wedded to lifetime patterns. Affordability and competing devices (PSPs, iPads, iTouches etc.) with more game options and broader entertainment possibility limit teenage adoption of the devices.

And in South Africa?

My limited, ultra-informal sample from flights in South Africa showed a split between men and women not much different from typical air-travellers, but a demographic closer to 40 than 20 to 30. Continue reading “e-reader (reader) demographics changing”