The second article in Carat Australia’s three-part series on FMCG & Retail profiles three different brands, each at unique points in their journey, to understand how they are growing their businesses in a changing landscape.
Different types of FMCG and retail brands are reacting to these forces of change in unique ways. In this section we will look at three such brands and their approaches in media. The eCommerce giant Amazon, making a big play in broadcast channels as they look to grow their footprint in Australia. The big-box retailer Officeworks, augmenting their digital transformation with heavy investment in brand messaging. And the local fast-growing mattress brand Koala, building their audience with a combination of cheeky messaging, savvy partnerships, and traditional media.
Amazon is increasing their investment in ‘traditional’ channels. Three years after entering the Australian market, Amazon hasn’t grown as fast as many first anticipated. But sales doubled in 2020, totalling more than $1b, and it has cemented its status as a serious competitor to retailers in a huge variety of categories. In media the brand remains committed to spending heavily and consistently in broadcast channels. A near-constant presence in TV speaks to acquisition messages (“free delivery on your first eligible order”), major retail moments like Christmas, and its own retail events like the annual Mid-Year Sale and Amazon Prime Day.
These same messages regularly appear in radio, press, out-of-home, and cinema, with creative that is always light-hearted and often comedic, giving the foreign retailer a more Australian feel. Online performance media accounts for even more spend, and on top of that, the retail brand benefits from Amazon Prime’s ubiquitous advertising. FMCG brands should watch its growth closely, as its selling and advertising opportunities become ever more appealing as its audiences and capabilities grow.
Source: AQX (2017-2020), excluding media for Prime and Amazon Web ServicesNote: pay TV and most digital spend (incl. social, search video) aren’t captured, AFR https://www.afr.com/companies/retail/amazon-australia-salesexceed-1b-20210208-p570ii
Officeworks continues to focus on brand led communications. Officeworks spent less than usual on media in 2020 – like many retailers did, due to COVID – but has retained its focus on brand comms including the “Never Stop Creating” platform, which encourages kids and adults alike to get creative, and the “Mind Grown” campaign for its education range. These are emotive, distinct, and backed by heavy investment in screens, much like its campaigns for seasonal occasions like Christmas and back-to-school. The latter has helped cement its leadership of that occasion, when complemented by comms with functional proof points (like school list services) and key products at competitive prices.
Officeworks is also a great example of a big retailer taking genuine steps to become more sustainable. It collects e-waste via the Bring It Back program; plants trees to offset paper consumption via the Restoring Australia program; promotes recycling via a partnership with Garage Sale Trail; and helps customers find products that are recycled, refillable, compostable, plastic-free and more via its Greener Choices vertical.
These actions are communicated in owned channels like social and eDM, and often above-the-line in TV and radio, setting an example for other retailers who are doing their own sustainable acts.
Source: AQX (2017-2020) Note: pay TV and most digital spend (incl. social, search video) aren’t captured.
Koala continues to evolve its brand identity and presence. In recent years the online retailer that is “fixing the furniture industry” has behaved like the archetypal challenger brand and found great success in edgy online marketing and stunts, satirising competitors like IKEA. Now, Koala is turning to traditional media, looking for a broader audience as it widens its own range beyond mattresses and into pillows, tables, sofas, and sheets. While digital marketing remains the priority, it invests a growing amount in TV, radio, and out-of-home. The CMO claims the brand is “taking a more mature tone in its advertising” while “trying to retain its cheeky spirit,” and so far, the brand is navigating this transition with great success.
Koala is also raising consumer expectations for retailers when it comes to social responsibility. It believes that diverse casting in advertising needs to be “table stakes,” which is well reflected in its own creative. It is one of Australia’s most prominent B Corps and a member 1% For The Planet, donating 1% of its annual sales to the environment. Each of these commitments are proudly communicated on its website, social channels, and products, which signals its purposeful, challenger positioning to consumers.
Source: AQX (2017-2020) Note: pay TV and most digital spend (incl. social, search video) aren’t captured.
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