How Giant gives the people what they want: $16 million in savings

Dairy Farm’s Southeast Asia marketing chief on the radical idea of permanently lowering prices and going against hype- and promotions-driven marketing.

The idea that consumers will be drawn to lower prices is an age-old one, and it’s evidently worked for brands such as Lazada and AirAsia. Sure, some might argue that shouting from the rooftops about low prices may dilute the ‘premium’ nature of a brand; or maybe it comes across as ‘hard-sell’.

For Giant, the Dairy Farm-owned supermarket chain popularised in Singapore and Malaysia, lower prices are what it wants to be known for. And not just discounted prices for a limited period; but discounted prices permanently.

Lee Yik Hun, marketing director for Dairy Farm food in Southeast Asia, told Campaign Asia-Pacific that his team spoke to customers during the ideation process for the campaign, and asked them what’s important to them. Lowering grocery bills was top of the list for shoppers, he said.

The campaign, which launched in September last year in collaboration with agency of record Ogilvy, initially cost SG$17 million (US$13 million). Because of “overwhelming results”, a further SG$4 million (US$3 million) was injected into the campaign in March this year. Note that this cost refers to just the bolstering of lower prices, and doesn’t include marketing and agency fees. The campaign also coincided with Giant’s recent brand refresh, the cost of which isn’t included in this figure.

“The idea behind it is that we lower the prices of groceries for key essential items and fresh items that our customers buy most frequently,” said Lee. “Fresh food is an area where prices fluctuate, but despite that we were steadfast about keeping them low.”

For example, minced pork retails for about SG$1.40 per 100g, and during a limited-time promotion at Giant, may go down to SG$1.20. But this long-running campaign means that the item sells for SG$0.90 for the foreseeable future.

During the thick of the pandemic last year, Lee felt that a campaign like this would alleviate customers’ financial concerns, many of whom have told Lee and his team that they were let go or furloughed.

“We wanted to be able to make sure that groceries are one thing [our customers] didn’t have to worry about, and they didn’t have to worry about putting food on the table,” said Lee. “We're not serving a niche group of customers, we're serving the general population. And being able to give this to our customers is very important, especially to those with lower-income.”

Research into customers’ needs were done in three parts: focus groups and one-on-one sessions with customers; big data to notice patterns in transactions and what people were putting into their baskets; and customer feedback whether verbally or via emails and letters. And instead of focussing on spend in agency fees and creative output, the brand instead decided to spend the bulk of its budget on the customer itself.

“You don't see many brands do that," Lee said. "They might do the reverse where they spend a lot of money on telling people how great they are. But they don't really do much beyond that. We chose the route that gives customers the most immediate impact. The average reduction in prices for our customers is about 20%, and that's quite significant.”

In a world where highly creative campaigns revolve around lofty purpose-driven messaging, it feels almost radical to really just give the people what they want. In this case, it was as simple as cheaper items. Lee added that customers also want “a bit of fun”, leading to the singing and dancing in campaign films. It all feels unusually old-fashioned—a bunch of people doing a jingle on screen about cheap items.

Speaking of old-fashioned, Lee added that the most important engagement channel for the brand’s customers are the stores themselves. “We make sure customers get the messaging in-store itself. As you enter and as you exit the store, you'll see our point-of-sales and signages telling you all about the campaign,” he said. The split between Lee’s traditional and digital spend is about 50/50 at the moment.

The finger heart—a gesture popularised by Korean culture—is used as a symbol of the campaign, and has now become synonymous with the store’s discounted items.

Since the launch of the campaign, Lee said that sales and footfall have increased. For instance, sales of Fuji apples have increased by 70%, Holland potatoes by 85%, and leafy vegetables by 44%. Data also shows that top-of-mind awareness has improved, which, according to Lee, is the ‘holy grail’ of the campaign results so far, and the part that he’s most pleased about.

“The sales of items in the campaign have exceeded our expectations, which is why we are committed to extending the campaign. We wouldn't have extended it if it didn't work,” he said.

Lower prices, however, must be sustained if conversion is a continuous KPI for Lee. And this prolonging of price points is where this campaign becomes challenging for him.

“From a conceptualisation standpoint, the hardest part was figuring out how to tell people that it’s not a promotion," he said. "Because we're going up against the consumer belief that lower prices are temporary especially with so many 11/11 or 12/12 campaigns around us. We need to see how we can continuously bring new news so that the campaign can be evolved. While still making it exciting for our customers, of course.

“Our customers tell us: ‘The price of your apples is SG$2.50. You know, your prices are great, but what more can you do, Giant?’ We've now progressed to Angus beef patties; we now have grass-fed Angus beef patties from Australia from SG$3.”

Lee added that some items such as its prawns—imported from South America and heavily discounted—fly off the seafood section so quickly, they run out by most afternoons. In fact, some 409,680kg of prawns have been sold since the launch of the campaign.

But with so many items offered at exorbitantly low prices and flown in from across the world, one must surely think about sustainability check marks such as carbon footprint and mass consumption of industrially farmed products.

Some areas that Lee thinks about are not new such as reducing plastic in-store; offering Impossible and other plant-based meat substitutes; and ensuring efficient supply chains. Lee argued that with lower prices comes a bigger volume of demand, and with that comes bulk transportation or the ability to “ship more in one trip”.

He added: “It doesn't mean that our lower prices are causing our customers to eat a lot more; it’s just that they are able to buy a lot more within their budget.”

A version of this article first appeared on Campaign Asia-Pacific


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