Was/now pricing – Is it worth the risk?

Topics: Featured, Home (News & Articles)

By DVM Law - POPAI legal partner

for-sale-1582327-1279x703When sales season rolls around, businesses will look to catch the wandering eyes of customers with flashy advertising promoting their product discounts. But advertisers developing “price-cut” or sales campaigns need to make sure the strategy does not backfire and result in unwanted attention from the Australian Competition and Consumer Commission.

A common sales tactic is ‘was/now’ or ‘strikethrough’ pricing, where a business makes comparisons between the new discounted price for a product and the old, higher price. Usually, the old price appears with a strikethrough to indicate that the product is now cheaper. For example: “$250 $100” or “Was $250 Now $100”

‘Was/now’ or ‘strikethrough’ pricing campaigns create a sense of urgency by representing to consumers that they will make savings on the product (i.e. the difference between the old and new price) if they buy the product during the sale period. However, many brands have fallen into the trap of exaggerating the extent of the savings. This can lead to breaches of sections 18 and 29(1)(i) of the Australian Consumer Law, which deal with misleading or deceptive conduct and false or misleading representations with respect to the price of goods.

When designing a was/now campaign, the key issues to consider are:

Would consumers have paid the “was” price or the “strikethrough” price for the product for a reasonable period of time immediately before the sale commenced?

Advertisers need to ensure that the ‘was’ price accurately reflects the price that consumers would have paid before the campaign. This could be difficult to prove, especially in businesses where discounts are frequently offered, and consumers rarely actually pay the listed ‘was’ price. It is recommended that businesses keep clear records to substantiate the ‘was’ price through a history of recent actual transactions, proving that consumers paid the ‘was’ price for a reasonable period.

What constitutes a “reasonable” period?

Determining how long a company needs to have sold its goods at the ‘was’ price will vary from case to case, depending on the type of product or market involved and usual frequency of price changes for that product or in that market. Generally speaking, a shorter period of time is more likely to be ‘reasonable’ if there has been a high volume of actual sales. In most circumstances, a period of several months would be considered to be the minimum.

Proceeding with a ‘was/now’ campaign without a verifiable history of sales is a risky path, and legal advice is recommended before proceeding to avoid creating misleading advertisements.

What if I get it wrong?

Was/now pricing claims have been well litigated and there is a body of case law where such claims have been found to misleading. For example, in ACCC v Jewellery Group Pty Ltd [2012] FCA 848, the Federal Court (and later the Full Federal Court) found that Jewellery Group Pty Ltd (Zamel’s) had made false or misleading representations through the use of was/now pricing in catalogues, as the relevant items had not been sold at the ‘was’ price in the four months before the sale period, and even outside sales periods Zamel’s had a vigorous discounting policy that meant consumers would rarely pay the ‘was’ price in any event. In that case, it was found to be appropriate to have regard to a sales period of four months. Zamel’s was penalised $250 000 and the court also ordered that Zamel’s publish corrective notices and implement a trade practices compliance program.

More recently, Athena Solutions Pty Ltd trading as Froothie Australia (Froothie), the supplier of Optimum branded kitchen appliances, paid a penalty of $10,800 following the issue of an infringement notice by the ACCC.

The ACCC issued the infringement notice because it had reasonable grounds to believe that Froothie had made misleading representations to consumers. Froothie had advertised one of its blenders with: “PROMO PRICE: $579.00” directly below the strike through price statement “PRICE: $691.00”.  However Froothiewas unable to show that the blender had been offered for sale, or sold, at the strike through price of $691.00 prior to the promotion.

https://www.accc.gov.au/media-release/accc-acts-on-alleged-false-or-misleading-strike-through-pricing-by-froothie-australia

Businesses should be aware that the ACCC has a broad range of investigative and enforcement powers and businesses can be compelled by the ACCC to substantiate advertising claims.

DVM TIP

If there are no genuine savings to be made through was/now pricing comparisons, businesses are likely to be found to be misleading customers. Advertisers should make sure they have records which substantiate recent sales at the ‘was’ price for a reasonable period of time before embarking on this pricing strategy.

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Article by DVM Law, marketing industry lawyers and POPAI legal partner. POPAI members receive free five minute phone consultation with DVM - just mention you're a POPAI member. 
Suite 12, Level 1, 285A Crown Street, Surry Hills NSW 2010
02 8599 1280│dvmlaw.com

 

Jan/Feb Retail Environments magazine

Topics: Featured, Home (News & Articles), Retail Environments

Retail Environments is the official magazine of the Shop!, free to all POPAI members and included in your membership. It focuses on the business of the ever-changing retail landscape. In the January/February 2018 issue of Retail Environments magazine you'll find:

Jan feb retail environments coverIN THIS ISSUE:

  • Romancing the Stones
  • A Cut Above
  • EuroShop Trends
  • Reinventing the Customer Experience
  • GlobalShop Review
  • Installation and Logistics
  • Focus: Lighting, Flooring, and Materials

You’ll also find new product information, inspirational photos of windows and store interiors, and news of member design and supply firms.

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2018 Calendar of Events

Topics: Featured, Home (News & Articles)

What's on 2018

POPAI ANZ is pleased to release our 2018 Calendar of events! 2018 has all of the usual stuff packed in - our 7 event Professional Development series across Sydney and Melbourne, annual conference, and of course, the Awards.

This year is a hugely exciting year for us, as we leave behind the old an step into the future with a complete rebrand, including a new name, look and feel, and new website. All will be revealed later this year, with a free member's launch to be held on July 26. In the meantime, check out our calendar of events for a glimpse of what's to come with our new look!

Our first event for the year is the Brands Speak Professional Development Series event - our first ever evening drinks PDS - featuring Fisher & Paykel. Ticket bookings can be made here.

Click here to download: POPAI 2018 Calendar of Events

MAA entries close Friday

Topics: Events, Home (News & Articles)

MAA globes 2

Entries to POPAI ANZ's global awards pathway, the MAA Globes, close this Friday, February 23. Entry is open to all POPAI ANZ winners (Bronze, Silver, Gold).

MAA Globes

Eligibility: All 2017 POPAI ANZ winners – Bronze, Silver, Gold & Pinnacle

To enter: http://maawglobes.com

Entries close: 23 February, 2018

Cost: US$250

Now in their 31st year, the MAA Globes have become the elite marketing communications awards program, recognising the best of the best campaigns from virtually every country in the world.

Only campaigns that are winners of Pinnacle, Gold, Silver or Bronze Awards in a recognised award program qualify for entry.

Winners will be announced at the 2018 MAA Worldwide summit in Washington DC in May. Gold, Silver and Bronze Globe winners will be invited to have their campaigns presented on Warc's global platform.

For more information, see attached or visit http://maawglobes.com/. For questions regarding the MAA Globes program, please contact Mike Da Silva at mdasilva@mdsa.com.au.

 

4 weeks ’til GlobalShop

Topics: Events, Home (News & Articles)

PrintIf you are keen to attend this year's GlobalShop event in Chicago from March 27-29, POPAI still has a few rooms on hold for members planning to make the trip.

POPAI ANZ members receive free GlobalShop entry, and free Shop! Welcome drinks. The Global Awards ceremony will be held on Wednesday March 28, with 13 Australian campaigns entered.

An Australian delegation dinner will also be hosted by POPAI ANZ (at own cost), as well as drinks on the Monday evening for anyone flying in earlier.

Flight and accommodation packages are priced from around $4600,  To book your flights and room at the Marriott, contact Kelly Ayers at MTA Travel, and mention you are part of the POPAI delegation - kayers@mtatravel.com.au or 0408 898 853.

Date: 27-29 March, 2018
Location: McCormick Pl, Chicago, USA
Website: www.globalshop.org
Cost: From A$4600 per person.

Price includes:

  • Return economy class airfares to Chicago with Qantas Airways
  • Return airport transfers
  • All taxes and charges
  • 4 nights accommodation at Marriot Marquis Chicago
  • Breakfast daily
  • Optional Welcome Dinner on Tuesday 27 March (details and cost TBA)
  • Free entry to the GlobalShop Expo (conference sessions additional)
  • Daily group catch ups to share insights and findings of the event with POPAI ANZ GM

Above package details may be altered to suit your needs.

 POPAI ANZ is currently exploring options for a possible retail walking tour of Chicago, however, tour organisers have not yet released details, dates or costings.(TBC)

How to book:

*Variations permitted if you need to alter your trip eg flight dates, airline, etc – this will affect price.

Event: Advancing the art & science of experience

Topics: Events, Featured, Home (News & Articles)

 

CXI Seminar Series is a bi-annual series of inspiration and insight aimed to assist brands discover, design, deliver, and develop experience-driven strategies. The inaugural CXI Seminar, and official launch of the CXI Research Group, will be Sydney on 14 March 2018. Presentations are as follows:

    • Innovating the Customer Journey: Associate Professor Sean Sands, CXI Co-Director, will present highlights and case studies from some of the most innovative global brands, highlighting the latest tech, stores and innovations from NRF’s Big Show conference.
    • Inspiration for Experience Transformation: Guest presenter, Professor Alexis Mavrommatis from EADA Business School, Barcelona, will present best-in-class examples of how global brands are competing in increasingly saturated markets and discuss how retail innovators are challenging the status-quo.

CXI works with organisations and brands to generate powerful insights that inform optimal experiences, innovations, and strategies. Its four domains of experience research and insight span retail, services, sports, and health. Offering a blend of commercial relevance with academic acumen, CXI works with industry to advance the art and science of experience.

Registration information:

Time: 7am-9:30am
Venue: Museum of Contemporary Art MCA, 140 George Street, Sydney
Cost: $129
Book tickets: https://cxisydney.eventbrite.com.au

 

 

E-commerce optimisation – creating connected experiences

Topics: Featured, Home (News & Articles)

By SGK

online shopping picThe world’s biggest companies, run largely by digital immigrant baby boomers, are still struggling to figure out how to navigate the new relationship between consumers and their brands.

The rules of engagement have changed. The role of packaging has changed.

This is because the entire marketing landscape has been irrevocably transformed by technology. Years ago, the path to purchase was linear; today it is completely non-linear.

How, when, where and why consumers make buying decisions today is influenced by exposure to an almost limitless barrage of content online 24/7.

To thrive in today’s rapidly-changing marketplace, companies must reimagine their relationships with customers and how they sell their products. Successfully synthesizing digital and physical commerce into a connected experience for customers requires a fundamental shift in thinking. Transformation, key to growth, is no longer a lofty aspiration. It’s required to win.

Consider this report by eMarketer: Amazon’s eCommerce revenue rose 15.8% in the last 12 months prior to June 2016, which is roughly the same as Wal-Mart. But Amazon posted $82.7 billion in sales, compared with $12.5 billion for Walmart, a chasm that just keeps widening.

McKinsey has noted, “Digital technology, despite its seeming ubiquity, has only begun to penetrate industries. As it continues its advance, the implications for revenues, profits, and opportunities will be dramatic. And that on average, industries are less than 40% digitized, despite the relatively deep penetration of these technologies in media, retail and high tech.”

shopper influencers map

So, the challenges most companies face today due to digital disruption promise only to become magnified in the next few years.

What does this mean to the packaging industry? The package that consumers view online is at least as important as the package on store shelves. And that the package on-shelf needs to support the brand’s marketing.

Grocery sales through online platforms represent a very small part of the overall grocery retail market, but are amongst the fastest growing segment.

The U.S. online grocery market is estimated to generate sales worth of about 14.2 billion U.S. dollars in 2017, with sales forecast to reach 29.7 billion U.S. dollars by 2021. Among the leading online food and beverage retailers in 2016, were Amazon and Walmart.

In 2016, some 5 percent of U.S. consumers preferred shopping for groceries online. In total, U.S. online grocery sales amounted to about 7 billion U.S. dollars in 2015 and are expected to rise to 18 billion U.S. dollars by 2020.

For time-strapped consumers, online grocery shopping is a convenient and timesaving option. When shopping for groceries online, U.S. consumers visited about 2.2 different websites during their online shopping trip on average.

About one third of consumers placed an order for groceries online about once a month in the United States in 2015. In the same year, the most popular e-grocery product categories included snacks, health and beauty care products and paper products such as paper towels or napkins in the U.S.

Online grocery sales set to surge — grabbing 20 percent of market by 2025. Online grocery shopping could grow five-fold over the next decade, with American consumers spending upwards of $100 billion on food-at-home items by 2025, according to a report released earlier this year.

"Grocery shopping will reach digital maturity and saturation faster than other industries that went online before, such as publishing or banking," said the report.

The report also found millennial shoppers surveyed were more willing to buy groceries online in the future than other consumer groups.

 

ABOUT SGK: SGK is a leading global brand development, activation and deployment company that drives brand performance. By creating brands, helping sell brands, producing brand assets and protecting brand equities, SGK helps their clients achieve higher brand performance. SGK's global footprint spans more than 20 countries. SGK was formerly marketed as Schawk, Inc. and is a division of Matthews International Corporation.

Winning instore

Topics: Uncategorized

CHEP’s Store Solutions are helping Australian beverage manufacturer Tru Blu Beverages’  improve onshelf availability, maximise manual handling efficiencies, reduce product damage, increase sales through retail differentiation, and improve their overall customer experience.

Tru Blu Beverages produces a large and diverse range of branded and contract-packed beverages, with one in six beverages purchased in Australian supermarkets being a Tru Blu Beverages product.

Some of the beverages include Pub Squash, LA Ice Cola, Waterfords Mineral Water, Diet Rite and Wicked Energy Drink.

With facilities in three Australian states, and offices in each major capital city, Tru Blu Beverages has an extensive manufacturing and distribution operation. With this sort of scale, it is no wonder the company is ranked the third largest non-alcoholic and non-dairy beverage manufacturer in Australia.

By partnering with CHEP in its supply chain, Tru Blu Beverages has access to the latest platform innovations, local and global expertise, and an extensive network that has enabled them to improve their environmental footprint and bottom line, without compromise.

In order to unlock greater efficiencies and getting more products into the hands of customers at the right time, CHEP has worked closely with Tru Blu Beverages to identify, trial and implement several Store Solutions such as the award winning Retail Display Pallet and Beverage Tray system.

These sustainable, customer-facing platforms provide a one-touch solution, where the same packaging is used for transportation, replenishment, retail merchandising displays and storage of products and assist Tru Blu Beverages to move product seamlessly from its manufacturing sites to retailers floors, fully-stocked and ready to go. They also remove the need for one-way cardboard packaging and minimising transport resources, reducing costs and waste.

Speaking about these solutions, Mark Brooks, Commercial Manager at Tru Blu Beverages said, “By working with CHEP and using their retail ready platforms, we’ve been able to streamline merchandising and replenishment.

"CHEP are a great supporter for our company. They work closely with our engineering teams to ensure our supply chain runs smoothly end to end. And also support our sales team and trading partners to improve the customer experience,” Mr Brooks said.