Genuine offers?

Promotions play a massive part in retail strategy, but every word you put on a piece of POS is open to scrutiny. And if any of those words fall foul of legislation, then you could be looking at punitive penalties.

Grocery retailing comes under particular scrutiny because customers are perceived to be at an informational disadvantage. They buy so many products during the same shop, often under self-imposed time pressures, that most find it difficult to distinguish good value from poor.

Another reason for the scrutiny is the surge in complaints from consumers about misleading pricing practices. It’s not unheard of for a large number of complaints to be treated as super-complaints and submitted to regulators by consumer groups, such as Which?.

Price promotions

For marketers in the grocery sector, who may have up to 400,000 products on their supermarket shelves, price promotion is an incredibly important marketing tool. But that’s a lot of potential messaging to get wrong.

As a company that produces several million assets a year for retail clients, we have to employ robust quality control processes to ensure that all those artworks are error-free and correct to brief.

It isn’t our job to offer legal advice. Our clients are big brands and retailers, and they have their own legal teams. However, as a studio that also creates artworks for our clients’ local stores and outlets, having a little bit of knowledge in our account teams and quality control team about what’s permissible and what’s not can often speed up the process – by advising local managers it isn’t really worth running that ‘unbelievable’ offer past their head office just to get a definite no-go.

Most common issues

With retail, the biggest issues are around offers. Just because a claim appears to be literally true, it doesn’t mean it won’t be considered misleading. And with unlimited fines available to regulators, you certainly don’t want to be saying anything misleading.

Here are some of the most common issues we encounter:

• “From £xxx”/“Up to XX% off” – seems straightforward. If you’ve dropped the price of the oldest fridge in your store from £400 to £150 to shift it, you’re selling fridges that are “up to £250 off”, right? Well, not exactly. When consumers rush to your store to snap up a bargain and find all the fridges they’re interested in at full price or only £10 off, they’re going to feel a little bit cheated. For this mechanic to be valid, the “from” or “up to” has to apply to a significant proportion of your products – not just one or two end-of-line products.
• Was/Now – to use this mechanic, you have to properly ‘establish’ the old price. For instance, if you market a product for a single day at £10, you can’t then drop the price to £5 and label it “half price” for the next six weeks. To use “was/now”, the product has to have been on sale for the old price for longer than the new price. So, if you sell it at £10 for a week, then drop the price to £5, you can only advertise “was/now” for under a week. After that, £5 is considered to be the new ‘true’ price of the product.
• Multi-buys, such as BOGOF – again, buy one, get one free is only valid if the price of the one you’re paying for is its true, established price. You can’t simply up the price of a product, then next day offer 2-for-1. This would certainly be considered misleading.
• Unclear unit pricing – if you’re selling products of different sizes, you have to make the unit price clear so that customers can easily make valid comparisons to determine which is the best value to them. It essentially shows customers how much different products would cost if they were sold in packs of the same volume or weight.
• Seasonal offers– some products, such as fruit, are seasonal. This makes some fruit much cheaper in the summer than the winter, as you have to fly them in from sunnier climes in the winter. You can’t take the expensive winter price and compare it to the cheaper summer price. Yes, those succulent fruit may well be half the price in the summer, but you can’t advertise them as half price. Again, that would be misleading.

The issue with all these offers is that none of them are technically untrue. Your fridges do have up to £250 off, your summer fruit might be half the price you were selling it for in January. Nevertheless, these messages don’t tell the whole picture, so may be deemed misleading.

Beyond the fines, there’s the danger of huge reputation damage – no retailer wants to be branded by the press as trying to rip off their customers, especially if the pricing message was a genuine mistake.

What we would advise anyone writing an offer message to do is step back after they’ve written and try to read it as a customer might. What would they think it means? What would you think it means if you saw it in another retail outlet?

Now, does that thought reflect the true situation? If it doesn’t, then think again. If it does, you should still probably run it by legal, but at least you have a better chance of getting it approved.

www.inspiredthinkinggroup.com