Michelle Whelan, UK CEO of VMLY&R COMMERCE explains how those in the retail sector can activate the power of experience to counter new HFSS legislation.
High fat, sugar and salt [HFSS] legislation is set to impact the retail environment on and offline. It will impact sales. It does not simply apply to sweets and sugary drinks – cakes, biscuits and pizzas are all in the firing line too. Brands that use experiential creatively, I believe, will continue to reach existing customers and engage new audiences.
The fact is that the UK has one of the worst rates of obesity in Western Europe and indirect costs on the economy have been estimated at around £27bn per year. Promotion has been seen as a key driver in consumption, with multi-buys proven to push up purchase volumes for adults and children alike.
So, it comes as no surprise that one of the key government proposals is to restrict promotion of HFSS products by location and by price. The drive to restrict has been hastened by Covid-19 and how obesity impacts our body’s ability to tackle the virus.
As complexity continues to shroud HSFF legislation, we explore implications for brands and retailers and see experiential marketing as the path for growth.
Following a year of consultation with individuals, retailers, manufacturers and industry bodies, plans have now been laid to implement restrictions beginning April 2022.
In a nutshell, the legislation bans the location of HFSS foods at aisle ends, tills and within 15m of the store entrance for retailers over 2000sq feet and puts a stop to multi-buy promotions. It also prevents these foods from being advertised between 5.30am and 9pm seven days a week. Finally, it bans all online paid promotion including paid work with influencers – almost completely curtailing online advertising.
The aim of the game is to reduce impulse buying and to reduce the volume of consumption in adults, and more crucially, children. Research has shown that end of aisle displays can increase sales of soft drinks by up to 50% and that shoppers buy almost 20% more directly as a result of promotions.
Unsurprisingly, there is concern across the industry. Research commissioned by the Food & Drink Federation (FDF) claimed a blanket ban on aisle-end promotions alone could cost retailers £500m and suppliers £700m. And while the government’s estimates are lower, at up to c£200m per year in lost profits, neither scenario makes for good reading.
The industry has pointed out that previous restrictions, like those on advertising high sugar drinks to children have had little impact on obesity rates. After the introduction of a tax on sugar in drinks in 2018 there was actually an overall 0.5% gain in sugar consumption from these foods, rather than the hoped fall because consumption overall increased.
However, there is support from the general public, particularly around restriction of online advertising and placement by tills. According to research released by the Chartered Institute of Marketing, more than half of CMOS back tougher restrictions for HFSS advertising.
Experiential marketing: path to growth
The truth is, the treats and snacks we know and love aren’t going away. And nor are the effective promotional methods that have been used up to now. Many options remain for retailers and manufacturers including developing new lines compliant with the standards set by OFCOM’s Nutrient Profile which will be used to assess them.
Most importantly, we need to find ways to ensure that people understand their options, are alerted to new products and can still enjoy great value on the products they know and love. The key is to make remaining opportunities work harder and more creatively.
The good news is that there’s a channel that delivers on all of this and acts as an effective complement to reimagining proven channels – experiential marketing.
We already know that after enjoying experiential marketing 94% of consumers are more likely to remember a brand and 98% are more inclined to purchase. Beyond that, experiential offers brands and retailers distinct benefits for HFSS marketing under the new regulations with three clear steps. The key to success will be to act now or pay the price later…
1. Build your fan base now: connect and collect
Experiential is a proven method for collecting rich consumer data, not only communications permission, but also behavioural and attitudinal data as people move through your spaces. Use experiences to build your database of fans then direct them in store or online with exclusive offers that deliver a true value exchange.
2. Keep brand love high: entertain and educate
Brands should build fun, informative experiences that inform consumer understanding of brand and category. This will ensure that, as the landscape changes, your customers are one step ahead in understanding and acceptance. In addition, owned spaces will not be subject to the same restrictions that retailers face, creating additional face-to-face sampling and sales channels.
3. Remain relevant: promote and publicise
Creative experiential, in the form of stunts, pop-ups and limited-edition experiences is already highly effective in maintaining attention through PR which is not restricted by the legislation. HFSS brands can take inspiration from brand homes like Cadbury World in Birmingham which already welcomes 600,000 people per year and is an income generator in its own right. Guinness Store House in Dublin generates an estimated $54.9m a year. Boots’ shoppable experience “Bootiques” generated 60% above sales expectation in the Christmas golden quarter.
Great creative and immersion will attract press and social attention, particularly if you tie it to price cuts or roll backs. Experiences can also communicate the brand values that are becoming more important to purchase decisions, while keeping your product front of mind.
I strongly believe that by taking creative commerce steps now to develop an innovative experiential strategy for HFSS products will have a robust communications platform place in time for the April 2022.
- Michelle Whelan is CEO at VMLY&R COMMERCE UK