“Value” is back in vogue. Brad Banducci, CEO of Woolworths, is spruiking frozen peas as the price of fresh fruit and veges has skyrocketed (and watching shopper behaviour keenly at Woolies’ “value” stores); Kmart has launched “Low Prices for Life” as its “commitment to value”; and Metcash has foregone the “bells and whistles” at its new “value-based supermarket”.
So, are we devaluing value by purely equating it to “price”? The origins of “value” are from the Latin “valere”, which means “be strong, be well”, and the old French “valoir”, which translates as “be worth”. When it crossed over into English around 1300, “value” was interpreted as “the intrinsic worth of a thing; degree to which something is useful or estimable”. In other words, it’s not just about discounts; value is the inherent strength of an offer; what an item is worth, rather than just what you pay.
Even if brands and retailers often default to a one-dimensional version of value, there are clear signs that audiences have a more sophisticated understanding. “Consumers are re-thinking value – and brands and retailers must now redefine the value they offer”, David Roth told me recently. David is Chairman of BrandAsset® Valuator (BAV®), which released a whitepaper earlier this year entitled “The New Deal: Re-evaluating Value in Extraordinary Times”. “Value used to be almost exclusively about price, we might say V = P,” Roth went on to say. “In 2022, it’s much more complex, perhaps V = P x Time x Quality x Convenience x Purpose and Values.” Yes, a great price is critical, but to a time-pressed shopper, “Click & Collect” may be just as alluring.
Even if price is central to a consumer proposition, it doesn’t mean that a brand needs to discount to show its worth. IKEA in Taiwan was seen as expensive by local shoppers, and perceptions needed to be shifted. IKEA did it by celebrating the intrinsic worth of its products with a digital “Dollar Catalogue”, with 100 products priced from $1 to $100 over 100 pages. Page number = price.
Balancing Value and Values
Meanwhile, a global research study into the “future shopper” (Gen Z) portends that to stay relevant, businesses will increasingly have to balance “value and values”. “Brands need to combine ‘Value’ elements such as quality, convenience, and value for money, with ‘Values’ like caring for the environment, gender representation, and workers’ rights,” said Debbie Ellison, Global Chief Digital Officer at VMLY&R (the agency I work for). That’s essentially the entirety of the BAV® value equation; V = Value (Time x Quality x Convenience) x (Values (Purpose and Values).
A great example of “value x values” is a case study by Unilever in India, which won Gold in the Creative Commerce category at this year’s Cannes Lions International Festival of Creativity. Plastic is a big problem globally, and even more so in India. So, Unilever introduced a “SmartFill” solution – a system in store that allows shoppers to re-use and fill any old plastic containers with Unilever liquid products (like detergent) and pay by weight. The pitch was “save plastic, save money”, and it resonated strongly with shoppers. As of writing, 150 litres are every hour at SmartFill stations, with a 57.2kg plastic reduction per day.
Aussie shoppers may be particularly price sensitive, but they too understand that value has different dimensions. It’s just a matter of unpacking the right value equation, and the right levers to pull, for your brand. Adam Proctor, a Senior Strategist that I work with, offers up a number of value strategies. “Really, it’s endless,” commented Proctor. “But I think three good places to start are to ‘dramatise value’, ‘add value’ or build in ‘emotional value’.”
‘Adding value’ is a common approach – ‘value on’ rather than ‘price off’. ‘Emotional value’ is more complex and difficult to execute, but essentially comes down to balancing a rational ‘push’ with an emotional ‘pull’. ‘Dramatising value’ is an interesting angle, demonstrated by the IKEA “Dollar Catalogue”, but Proctor also offered up a strong local example.
“Aldi are known for cheap prices, but not everyone trusts their quality,” Proctor explained. “So in July we opened a luxe pop-up bar in Sydney called ‘The Trophy Room’, which charged $4.41 per ticket for a quality wine and cheese experience. There was no discounting, just a dramatic demonstration of the fact that Aldi has wine-bar quality products that represent just incredible value.” When priced individually in the bar, glasses of award-winning wine started at just 83c, rather than the $12-$15 or more you might expect to pay at a restaurant.
So don’t “devalue value”. Recognise and reveal the inherent merits of your brand, offer and products…then package and promote them in interesting ways. And remember the origins of the word value: “be strong, be worth”.
- Jon Bird is an advisor at VMLY&R COMMERCE
Originally published in Inside Retail