the australian effie awards general entry form · pdf filethe australian effie awards general...

The Australian Effie Awards

General Entry Form 2016

Entry Number: 225

Agency BMF

Advertiser ALDI

Entry Title The Christmas campaign that was so effective, we had to pull it off air.

Category for this Entry Retail

Author BMF Planning

Phone 02 8985 7210

Email [email protected]

Directions appearing with each question must not to be deleted from the completed case; they serve as a guide for both entrants and judges. Complete entry form in - Type face: black font; 10pt minimum. All data must include a specific, verifiable source. Refer to the Effie “How to Enter” booklet for guidelines on properly sourcing your data. Data without a source will result in entry disqualification. Answer every question or indicate “not applicable” and define your target audience in the entry. Any unanswered question will result in entry disqualification.

Executive Summary (Please Attach the Executive Summary to the front of the entry so the judges can read this first) An Executive Summary of no more than 100 words is also required (not included in page count).

ALDI has achieved industry-leading growth over the last few years, making it the fastest-growing major retailer in Australia. But ALDI’s competitors were still winning the most important battle of the retail year – Christmas.

ALDI’s strength during most of the year became its weakness at Christmas. As a “discount supermarket that’s full of surprises”, ALDI loses relevance at a time when shoppers prioritise quality and familiarity over price.

This is the story of how over a 5-week period, ALDI stole share from the big-two supermarkets by throwing-out the clichés and celebrating the battle that is Christmas.

The campaign generated short-term effects on an enormous scale. With key products selling-out faster than forecast, the campaign was pulled early, saving millions in media spend.

1. Total Campaign Expenditure What was your total expenditure including development, media, production, agency fees and any other costs? Including production and value of donated media and non-traditional paid media.

Total media: $3,375,067

Total production: $700,000

Grand total: $4,075,067

2. What was the strategic communications challenge? What was going on in your category? Provide information on the category, marketplace, company, competitive environment, target audience and/or the product /service that created your challenge and your response to it.



1 AdNews, 15th December 2015. 2 BMF Qualitative Research, December 2014. 3 Nielsen Consumer and Media View, Q3 2015. 4 Ibid. 5 ALDI Scan Data, Q4 2014. 6 Nielsen Analytics, Q4 2014.

Christmas comes in November for retail marketers. Here’s the most obvious thing you’ll read today: Christmas is the most important time of the year for retailers in Australia. For supermarkets, Christmas Eve is the single biggest trading day of the year. From a marketing point of view, the Christmas battleground is November. Year after year, marketers spend more in November than any other month, and this peaked in 2015 with retailers alone spending $90.6 million on marketing.1 Christmas shoppers are willing to spend more for premium and familiar brands. Here’s the next most obvious thing you’ll read: Christmas is a time when shoppers indulge a little, treating themselves and their families to food and decorations that are a little more special. Think about the food you eat at Christmas. What’s more important: price or quality? When you’re cooking Christmas meals for extended family and friends, it’s no time for experimentation with unfamiliar products with questionable quality. Shoppers turn to brands they know and trust. ALDI’s positioning as a discount supermarket is less relevant at Christmas. Therein lies the problem for ALDI. Despite strong growth over the last few years, ALDI is still seen as an obscure discount retailer that sells weird brands and randomly stocks items like chainsaws next to infant formula. Shoppers are looking for something special and aren’t willing to compromise on quality just to save a couple of dollars.

“ALDI’s fine normally, but I’d feel like a cheapskate if I went there for Christmas.”2

Figure 2.1 | ALDI wins on price but lags on perceived quality and convenience3

And the no-frills store experience doesn’t help. What’s more, the barriers around the ALDI’s store experience are heightened at Christmas. If you haven’t been to ALDI, you might’ve heard there’s an unusual layout, you need to BYO bags, and as you go through the checkout you need to pack your own bags. This is especially a problem at Christmas when shoppers are stressed and rushed.

“ALDI just wouldn’t have the things I need, and when you’re shopping at Christmas it’s nightmare enough without traipsing from shop to shop”4

Christmas is traditionally a feast for competitors, a famine for ALDI. The tendency for shoppers to switch away from ALDI is reflected in sales results of previous years. In 2014, ALDI’s sales for leading into Christmas Day actually dropped 19% from the prior period.5 And that’s despite 2014 having been ALDI’s best Christmas to date.6 Meanwhile, for ALDI’s competitors, the run-up to Christmas yields the highest turnover of the year.



4. What was your strategy – and how did you get there? What was your strategy? Was it driven by a consumer insight or channel insight or marketplace / brand opportunity? Explain how it originated and how the strategy addressed the challenge.

For ALDI, Christmas isn’t just a challenge, but a huge opportunity. If we could get Australians turning to ALDI at Christmas, their perceived quality of ALDI products would increase for the rest of the year. Christmas retail marketing is mono-emotional When we looked at Christmas retail advertising, it seemed one-dimensional and idealistic – especially for supermarkets. Picture this: a typical Aussie backyard or patio where a group of casually-dressed extended family and friends sit around a long table full of food, telling jokes and smiling. Enter (also casually-dressed) celebrity chef, who brings a delicious looking dish to the table and everyone looks impressed. Casual Celeb Chef says something charming-ish or funny-ish and everyone laughs and goes on enjoying their wonderful sun-drenched Christmas lunch. It’s not hard to imagine because it’s seared into your eyeballs each November. With all the beaming faces and paper hats, you’d be excused for thinking the only emotion people felt – and wanted to feel – in the lead-up to Christmas was “festive”. When we spoke to people about Christmas advertising, they felt patronised and misunderstood.

7 IbisWorld, Supermarkets and Grocery Stores in Australia, February 2016. 8 NOTE: All figures based on Eastern Seaboard, as ALDI only had stores in NSW, Vic, Qld and ACT as of Q4 2015. 9 Nielsen Consumer and Media View, Q3 2015.

3. What were your objectives? State specific goals. Your entry is expected to include compelling data including behavioural objectives and results. Only in rare instances are the judges likely to award an entry that only demonstrates attitudinal changes. Provide a % or # for all goals. If you do not have a specific type of objective (e.g. no quantifiable objectives), state this in the entry form and explain why and why the objectives you do have are significant and challenging in the context of your category, etc. You must provide benchmark and context for your goals versus year prior and in context of competitive landscape and category.

Business impact ALDI is Australia’s fastest-growing major retailer. Our benchmarks were based on ALDI’s best performance, so the targets are about as aggressive as it gets for a retailer with over $8 billion annual revenue.7

Business KPI8 Benchmark Source Total sales ($) 100 ALDI sales data (indexed) Q4 sales growth 2% Nielsen Homescan, Q4 ave 2012-14 Household penetration 52% Q4 2014, Nielsen Homescan Market share 11.1% Nielsen Homescan, November 2014 Christmas Media Spend $5,125,958 Maxus, November 2014

Brand impact Our aim was to match or exceed historical peaks in key brand associations around quality and convenience:

Brand KPIs9 Benchmark Has good quality fresh meat 25.3% Has a good range of groceries 26.1% Has good quality groceries 31.5% Has good value groceries 41.5% Is convenient 30.2% The products I buy are always in stock 19.5% Has a good range of brands 16.0%



It’s led to Festive Fatigue Even more worrying for retailers – it was leading to a sort of festive fatigue. While November is the key month for Christmas marketing, shoppers roll their eyes at retailers trying to drum-up the Christmas Spirit too early. We had to find a fresh way to talk about Christmas. We had to show Australians that ALDI understands their Christmas better than anyone else. A research effect was leading marketers up the same old festive path When we looked back over years of consumer research for Christmas campaigns, we noticed that the timing of the research had a huge impact on the outcome. Most brands do their Christmas campaign planning and research between March and June, when people are looking forward to Christmas with fondness. We suspected attitudes might be different when people were in the thick of Christmas. So that’s when we did our consumer research. The reality: Christmas can be a pain. And that’s what makes it special. When we spoke to people about Christmas, we found it wasn’t all joyous and festive. Christmas can actually be a massive pain. From the awkward office party, to the frustration of untangling fairy lights, to the stress of preparing a meal for your extended family, the reality is that Christmas is an 8-week rollercoaster of emotions. Amongst the stress, panic and family dramas, there are moments of warmth and togetherness that make it all worthwhile.

“It starts with the tree and decorations, that’s fun. By then I’m ready to cancel Christmas… but then there’s always this moment that we have some friends of the family over for a

BBQ and I sort of go right, I can take it…then a family argument…and by the 25th we’re usually back on track and drinking and eating together even if it’s through gritted teeth!”10

“How would I describe Christmas? Cheerfully manic.”11

The key insight A much as we love Christmas, the weeks leading up can be a pain. A fresh and unique take on Christmas This refreshingly honest take on Christmas was both uniquely Australian and uniquely ALDI. Those schmultzy northern hemisphere retailers would never talk about Christmas like this. And our Australian supermarket rivals would never dare. This led to our communications strategy: 1. Demonstrate that ALDI understands what really goes in to creating the perfect Aussie Christmas. 2. Position ALDI as the antidote to Christmas stress. 3. Romanticise ALDI products and show they’re special enough for the Christmas. 5. What was your big idea? What was the idea that drove your effort? State in 25 WORDS OR LESS. Now This Is Christmas. Celebrate the reality of Christmas through all the ups and downs that make it a special time of year. 6. How did you bring the idea to life? Describe and provide rationale for your communications strategy that brings the idea to life. Explain how your idea addresses your challenge. Describe the channels selected/why selected? How did your creative and media strategies work together? In not more than three A4 pages show sufficient creative examples to enable the judges to understand the campaign. These pages can be additional to the eight A4 page written entry.

We wanted to take our audience on a journey through the array of emotions at Christmas. And we wanted to do it

10 BMF Qualitative Research, December 2014. 11 Ibid.



at mass scale. After all, our audience of Christmas shoppers represents the vast majority of the population.

Establishing ALDI’s fresh take on The Perfect Aussie Christmas

TV was the perfect media channel to establish ALDI’s unique point of view on Christmas, and to do it at scale. TV also allowed us to address quality concerns by showing ALDI’s special Christmas range in action, from decorations to a mouth-watering ham.

We led with a 60-second brand TVC to establish the idea, take people on the emotional journey, and cleverly integrate ALDI’s seasonal Christmas products throughout. We followed-up with 30-second version to tell a deeper story around particular product lines like Christmas decorations.

In radio, we acknowledged the bonkers Christmas madness, but then gave listeners a much-needed slice of Christmas Calm, with carols performed pan flutes and whale sounds in the background as we serenely announced ALDI’s Christmas products.

Figure 6.1 | 60-Second “Now This Is Christmas” TVC Figure 6.2 | 30-Second “Decorations” TVC

View on YouTube View on YouTube

Bringing ALDI’s seasonal Christmas products to the forefront

While the longer TV and radio executions featured ALDI’s seasonal range, we wanted to up the product quality credentials even further with retail advertising. The ALDI catalogue, print advertising, in store banners and 15-second TVCs featured beautifully-shot ALDI products. The imagery gave viewers sense of indulgence and abundance that’s befitting of Christmas.

Figure 6.3 | 15-Second “Decorations” TVC Figure 6.4 | Print and Catalogue

View on YouTube



7. How do you know your campaign was successful? Detail why you consider your effort a success. Refer to your objectives (results must relate directly to your objectives in (3) – restate them and provide results) and demonstrate how you met or exceeded those objectives using quantitative and behavioural metrics. Did your effort drive in-market results? Did it drive awareness and consumer behaviour change? Use charts and data whenever possible. Explain what x% means in your category. For confidential information proof of performance may be indexed if desired. Demonstrate the correlation between activity and outcomes. Make sure you address every objective, whether fully achieved or not. Indicate why the results you have are significant in the context of your category, competition and product / service.

The impact on sales was fast and furious.

The first sign of success was that the products were selling out significantly faster than forecast. As a result, we pulled the campaign earlier than planned, saving nearly $2 million in media.

Post-campaign analytics conducted by Nielsen revealed that this was indeed the case. Through the five weeks from 8/11/15 to 13/12/15, total sales were up 10% versus the same period in 2014. This was despite spending 66% less on media in that same period.

While total sales started from a similar position going into the Christmas period, ALDI’s total sales increased during the Christmas campaign of 2015 whereas they’d normally soften.

Figure 7.1 | Total Weekly Sales – Christmas 2015 v Christmas 201412

Quarterly sales growth for Q4 2015 was 3.1%, over 50% higher than the average Q4 sales growth over the previous 3 years.

Household penetration grew by some 256,000 households, and we added 123,000 heavy ALDI shoppers.13

12 ALDI Sales Data, and Maxus media spend. 13 Neilsen Homescan, Q4 2015. Heavy ALDI Shoppers defined as > $1,600 spend p.a.



Beyond the sales response, other business KPIs exceeded targets.

Business KPI14 Benchmark Actual Difference Total sales ($) 100 110 +10% Quarterly sales growth 2% 3.1% +55% Household penetration 52% 55% +6% Market share 11.1% 12.0% +8% Media spend $5,125,958 $3,375,067 -66%

Figure 8.1 | ALDI’s share of Main Grocery Shop increased by 71% from 7% to 12% of total shoppers15

The increase in sales didn’t just come from attracting new shoppers to ALDI, we also increased the total value of our shoppers’ baskets in terms of both AWOP and Spend/Visit.

Figure 7.2 | AWOP and Spend per Visit increased significantly during Christmas

14 Data for actual results are from the same sources as the benchmarks listed in the table of Q3, above. 15 Colmar Brunton ShopperPulse research does periodic dips into Main Grocery Shop. The last two were July 2013 (n=667), May 2015 (n=457) and the latest study will be published in RetailWorld in June 2016 (n=428).



The impact on brand health exceeded all expectations.

The campaign didn’t just elicit an immediate sales response, it had a positive impact on the brand, setting new historical highs in positive brand associations across all 16 brand metrics tracked by Nielsen.

Brand KPI16 Benchmark Actual Difference Has good quality fresh meat 25.3% 28.7% +13% Has a good range of groceries 26.1% 28.1% +8% Has good quality groceries 31.5% 34.9% +11% Has good value groceries 41.5% 45.1% +9% Is convenient 30.2% 35.9% +19% The products I buy are always in stock 19.5% 22.8% +17% Has a good range of brands 16.0% 18.4% +15%

We’re pleased that our peers liked the campaign, too.

Even those Gruen cynics suspected it’d be effective:

“I really love how they haven't just focused on all the positive things that can get a bit cheesy…. I like how they’ve focused on the negative things that we all experience…they kind of connect with us.”17

8. Did it achieve a positive ROI?

You need to convince the judges that the marketing investment provided a positive financial return – if that was a requirement. Indexing of data is acceptable. Your entry will not be ineligible if you don’t provide any data, but entries that do provide convincing evidence will gain additional marks. (Note that this data can be excluded from the published case on request.) We recognise that, in some instances, a measurable financial return will not be an objective, but you will need to persuade the judges why not.

ROI measures by what percentage the incremental gross profit (not gross sales) generated exceeded the campaign costs/investment. ‘Incremental’ means comparing what happened, with what would be expected to happen had the campaign not taken place and/or that status quo maintained. So, if the incremental gross profit is $1,000 and campaign costs are $1,000, they cancel each other out and the ROI is 0%. If additional gross profit was $1,500 the ROI is 50%. (refer to the supplementary notes on ROI calculation)

The campaign achieved a positive ROI of 68%, or $1.68 incremental profit for every $1 spent.

16 Nielsen Consumer and Media View, Q4 2015. 17 Milla McPhee, The Gruen Transfer, ABC, November 2015.



As an outright figure, this might not seem huge – especially up against other short-term effects that operate on a smaller scale.

But remember this ROI is across enormous baseline – Australia’s third-biggest supermarket with a 12% share18 of a market worth $88 billion annually.19

As a privately-owned retail business, ALDI’s actual revenue, margin and profit figures are highly confidential. Therefore we have indexed incremental profit and spend against the same period in 2014 to calculate the ROI.

If you really want to think about it in tangible dollar terms, add a dollar sign and seven zeroes, and you’re in the rough ballpark.

Index

Spend (incremental) 0.66

Profit (incremental) 1.10

ROI 1.68

It’s also important to note that this doesn’t take into account the lifetime value of the new customers we attracted to ALDI. Some 256,000 more households20 shopped at ALDI in Q4 of 2015. The number of Heavy Shoppers increased by 13.5%,21 that’s 123,000 more households spending at least $1,600 at ALDI each year.22 Even if they all spend only $1,600/year for the next 5 years, that’s nearly $1 billion in incremental revenue. 9. Convince us that the result was not due to other factors. You must explain in your entry the effect of any other potentially relevant factors such as product changes, pricing changes, distribution changes, competitive activity, press coverage, economic conditions, weather etc. You should acknowledge and estimate the role played by other factors and you should advise if the communications program led to other benefits accruing (such as retailers taking on more SKU’s, improving space allocated and access to promotional activity, or even improved support from a sales force that has ‘increased belief’ in the brand). Advertising rarely works in isolation but the judges need to be convinced that your campaign had a major impact on results.

1. Did the whole grocery category have strong growth?

Category-wide grocery sales growth actually slowed throughout 2015, from 5% growth in the 4 weeks to 21/2/15 to under 4% growth in the 4 weeks to 28/11/15.23 Online grocery sales performed well, with online shopping baskets averaging $57 more than in-store baskets. Visits to Woolworths Online and Coles Online increased 14% and 13% respectively in the lead-up to Christmas.24 Unfortunately the growth in online sales only benefited competitors, as ALDI doesn’t have an online store.

2. Did ALDI drop their prices?

No. In fact, the average price per unit of groceries at ALDI increased 4.4% versus the same period in 2014. The price gap between ALDI and their competitors actually narrowed, with the average price of Woolworths and Coles only increasing by 0.1% and 1.5%, respectively.25

Average grocery price/unit Change versus Q4 2014

ALDI $2.21 +4.4%

Coles $2.39 +1.5%

Woolworths $2.47 +0.1%

18 Neilsen Homescan, Q4 2015. 19 IbisWorld, Supermarkets and Grocery Stores in Australia, February 2016. 20 Nielsen Homescan, Q4 2015. 21 Ibid. 22 Ibid. 23 Nielsen Homescan, Q4 2015. 24 Ibid. 25 Ibid.



3. Did people just go to ALDI because they’re shopping around more?

While ALDI would benefit from people shopping around, Nielsen Homescan shows that there was actually less shopping-around at Christmas 2015. 47% of shoppers only visited 1 or 2 stores (up 3% YOY) while 53% of shoppers visited 2 or more stores (down 3% YOY).26

4. Did consumer confidence and disposable income help ALDI?

According to IbisWorld, the top 2 economic factors for the grocery retail market are consumer sentiment and disposable income.27 ALDI’s discount positioning means it would normally benefit from lower consumer confidence and lower disposable income. Nielsen Consumer Confidence study showed that there was no significant change from 2014 to 2015. In fact, in Q4 2015, only 29% of people were using spare cash to pay off debts and only 19% of people had no spare cash – down from 32% and 20% in Q4 2014. Nielsen’s Consumer Confidence Index was up to 96 for Christmas 2015 from 93 the year before.28

5. Did ALDI open loads of new stores?

No. During an average 5-week period, ALDI store numbers normally grow by 0.9%, or 3.5 new stores. During the campaign period, ALDI store numbers grew by just 0.5%. A grand total of 2 new stores.

10. Do you think there are any lessons to be learned from this case about advertising effectiveness or measurement? Judges will give additional marks to exceptional ideas, exceptional results and to cases that teach us something about how advertising works. A big idea is worth more than a lesser idea. A case that adds to our knowledge about advertising effectiveness or measurement deserves additional marks. These marks are open to the discretion of the judges. This is the “I wish I’d been responsible for that” factor. We Ask judges to reward great ideas, great results, originality, innovative measurement techniques, and penalise poorly written cases. High scores here will be the cases we want marketing students to be inspired by; the cases we can learn something from; the cases we want to showcase to the world.

“Traditional” marketing still works if it’s based on genuine insight This traditional approach to advertising has become apologist, and innovation is starting to trump insight. The trend makes sense – it’s much easier to get excited about the possibilities of harnessing a new technology or inventing a new product or innovating the customer experience. But in this case, we did not have any of those. All we had was a good old fashioned insightful perspective on the category, the brand and the people we were trying to reach. It was a fresh take on a time of year when marketing convention had become so embedded, it masked how people really feel. And it was brought to life with beautifully charming creative and then distributed via mass media. We’re not saying this approach is always more effective than more innovative ones. But it should be considered amongst the options, because when done well, the tried and tested approach to advertising can be hugely profitable. The insights that emerge from research depends on when the research is conducted. We all know that what you learn from research is highly dependent on the context of where, when and how that research takes place. So this isn’t a new lesson as much of a timely reminder and illustration of what we already know. If we’d conducted our consumer research at the usual time of year, we’d have probably heard the same old thing about how people love Christmas and are looking forward to it. But by simply doing research at the actual time of year that our campaign would be live, we were able to uncover a different truth, but one that was more relevant and powerful.

26 Ibid. 27 IbisWorld, Supermarkets and Grocery Stores in Australia, February 2016. 28 Nielsen ALDI Analytics, Q4 2015.



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