Little Shop returns: Why are Coles and Woolies obsessed with collectibles?
Tuesday, November 27, 2018/
The Australian supermarket sector’s fascination with collectible toys has intensified again, with Coles announcing the return of its popular Little Shop promotion yesterday evening.
The move comes just a few weeks after Woolworths unveiled its own Christmas-themed collectable promotion in an attempt to try and cash in on Coles’ earlier success.
Coles has launched five new collectibles, including mini mince pies, pavlova slabs, bonbons and gingerbread biscuits.
While it isn’t the first time the supermarket giants have turned to added extras to entice shoppers, the promotions and the manner they’re being implemented says some interesting things about how grocery is evolving in Australia.
Little Shop was one of the key factors that helped Coles seize momentum back from Woolworths earlier this year, delivering it a 5.1% jump in same-store sales.
Woolworths, which had been on the front foot for over a year, managed just 1.3% same-store growth, down from 3.1% in the previous quarter.
With those figures, it’s not surprising Woolies launched its own pop-out collectible promotion for Christmas — shoppers are clearly interested.
Both the promotions are pretty simple: customers receive a collectible for every $30 they spend at the supermarket.
There are plenty to collect, and little stands (sold separately) to put them on foster a ‘collect-them-all’ mentality.
As Retail Oasis retail expert Pippa Kulmar explains, in the age of social media, novelty and collectability have a clear appeal.
“Where they really capture interest is not just among children, but extending to adults selling them on buy and sell groups or on eBay,” she tells SmartCompany.
There are a host of other reasons the promotions are popular from a shopper psychology lens, from completion bias to the intermittent reward phenomena.
Underneath that, the $30 threshold says a few things. As competition in supermarkets has heated up in recent years and convenience has become more of a factor, consumers have become less loyal.
Nowadays, it isn’t unusual for shoppers to visit several different supermarkets over the course of a week for different things. Aldi and independents are also getting a slice of the pie.
The increasing availability of packaged groceries online, albeit a small piece of the market, is also helping drive this.
Attracting big weekly family shops has become harder for Coles and Woolies in this climate, putting pressure on average transaction values.
That’s where plastic (or cardboard) collectibles come in, as Kulmar explains.
“Growing up, parents would do big bulk shops, but now we run to the supermarket two or three times a week to get what we need for dinner or for kids lunches,” she says.
For independents, the development is something to keep an eye on. The limited-time aspect of the collectibles promotions is part of their appeal, so it’s unlikely they’ll stick around forever, at least not in their current form.