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| Chris Heiberg | Alan Solomon | |
| Group Merchandise and Marketing Executive | General Manager Marketing |
Marketing
The Group's marketing strategy is focused on retaining the loyalty of the existing customer base of over 800 000 people, building brand awareness amongst the target market and attracting new business to grow market share. The objectives of the marketing programme are realised through customer loyalty programmes, extensive media advertising and in-store promotions.
Customer loyalty: Re-serve scheme
In the year under review 61% (2004 - 61%) of sales were generated from existing customers. This can be attributed to the success of the "re-serve scheme" that identifies the suitability of customers for further credit offers based on their payment behaviour and current indebtedness to the Group.
A payment rating system based on past performance and behavioural scoring provides a predictive indicator on a customer's future creditworthiness. This allows for targeted marketing and credit offers. Once the scheme identifies these "re-servable" customers, advertising and promotions are used to encourage further purchases. The scheme is fully integrated with the debtors system and store operations, enabling customer segmentation.
Advertising
Advertising is merchandise driven and is targeted at both existing and new customers. The majority of the advertising budget is allocated to brochures and television which is supported by in-store promotions highlighting current campaigns. In addition, newspaper and magazine advertising is used to attract new business. Lewis also utilises sophisticated personalised direct marketing campaigns. These focus on existing and settled customers as well as new databases. All marketing databases are cross-matched to reach the ideal target market whose profile provide the greatest response.
Brand awareness of Lewis has increased strongly in recent years. Independent industry research by Adtrack shows that brand awareness of Lewis grew from 43% in November 2001 to 70% in September 2002 following the introduction and creative positioning of the slogan, Lewis - We are family. In 2003 brand awareness rose to 75% and has remained at this level in 2004, well above the industry norm.
The Markinor report of 2004, published in the Sunday Times, showed Lewis has accelerated into second place in terms of weighted brand awareness among furniture retailers. The brand relationship enjoyed by Lewis also improved from fourth to second place, as did the customer loyalty factor.
An in-house advertising studio has all the expertise to plan, design and produce every aspect of the marketing media mix from brochures and point-of-sale to press advertising and television. The focus of an in-house advertising studio ensures the most cost-effective production and the fastest possible distribution of advertising material to the Group's stores.
Promotions
Customer relationship building forms an integral part of the promotional strategy at store level. The broad network of stores and their locations enables the Company to be involved with the communities it serves and allows store management to develop relationships with customers through extensive in-store promotions, product demonstrations and functions.
The Lewis Club
The Lewis Club is a customer loyalty programme. Membership is free and automatic to any customer taking out insurance when opening an account.
Members of the Lewis Club receive a monthly magazine produced by New Highway Publishing, a division of the Group.
The editorial content of the magazine focuses on general interest, topical and popular lifestyle issues as well as including special offers, discount coupons and monthly competitions. Club members can apply for educational bursaries worth more than R2 million and have free access to 24-hour legal, medical and HIV advice lines.
As custom publishers, New Highway also produces the Foschini Club magazine.
The Lewis and Foschini Club magazines are circulated to over 1.2 million customers each month, with actual readership based on AMPS 2004 closer to two million. This extensive readership of the magazines presents advertisers with an opportunity to reach a highly targeted audience.