Boy, is there a lot going on in the world of supermarket marketing lately! In the UK its all-change with the resurgence of the discounters (albeit more polished than they used to be) as Aldi and Lidl win the hearts of shoppers and the champions of the cardigan brigade Morrisons dive to still further depths with the announcement of a 7.1% fall in like for like sales for thirteen weeks to 4th May.
Stuck-in-the-middle Tesco are meanwhile responding with “a little extra” effort of their own, manifested in the development of their “pound zones”. This is pure Tesco, possible only because of their intimate understanding of customer behaviour, which in turn is a product of their years of work with the Clubcard programme. Pound Zone is not just about discounts, but master class in where they appear in the stores and how they are presented, all driven by customer insights. Any retailer who has poo-poo’d the idea of loyalty in the past (and believe me I’ve met a few) must be kicking themselves right now for not appreciating the real value of a loyalty programme.
There’s no doubt that omni-channel retailing is also making a difference for those who have taken the plunge. One reason that Morrison’s is looking so sick these days is the challenge they face with their digital marketing strategy. When your consumer segments don’t shop on-line there’s nowhere to go when physical stores lose their attraction. I’m sure Tesco and Sainsbury’s would look far more desperate than they do now if it were not for their channel convergence. Don’t confuse omnichannel with multi-channel. Real omni-channel is the seamless combination of all channels with QR codes at the point of sale linking mobile shoppers to price comparisons, recipes and product information, integrating social media and having the same products available at the same price through all channels and available to order anywhere and either collect or have delivered. Having a website, even a transactional one doesn’t even give you table-stakes these days.
However, while their competitors are distracted by tough times in developed markets Tesco have landed a new deal to distribute their products through one thousand Choithrams stores in promising Indian, Middle East and Asian markets. Choithrams, for those who aren’t familiar with them, are one of India’s better retail exports with supermarkets in many developing markets. Like all retailers of similar origins, they lack refinement, have operational challenges and poor marketing, which means that, even in their traditional markets, they’ll face a tough challenge when the international players come to town and as new laws in India suggest, that might be sooner rather than later. However, maybe they’ll be getting more than competitive prices and decent product on their shelves with the Tesco deal? If I were them I’d be eyeing Tesco’s know-how with a new sense of advantage. If only they have the in-house nous to actually leverage this treasure-trove. In this part of the world though, what is obvious and compelling to us westerners often goes unnoticed and unexploited by businesses like these, so only time will tell. Choithrams’ Indian cousins Fine Fare Foods in Dubai have singularly failed to leverage the prize that was their Waitrose franchise, although, as I wrote in an earlier post, this must have in some part been due to Waitrose’s lack of control over the application of their brand.
Retailing and supermarket retailing in particular is a challenging and exciting place to be these days. I’m sure we’ll see some interesting acquisitions, closures and innovations this year and I’m looking forward to being in the middle of it all.
May 13, 2014