It has been a decent summer overall – national pride restored thanks to Team GB, a spell of summer weather while the schools are still on holiday and only the faint shadow of a post Brexit strategy to concern us.
A slightly different perspective perhaps around some of the boardrooms of our main supermarkets as sales continue to be sluggish, unless you are Asda, where sales were at their worst level since the company started 50 years ago. Concern at parent company Walmart has already seen the company sell its struggling photography operation which in most stores will create even more space to fill.
So what is happening in one of the largest sectors of our economy? Most retailers remain fixed on a price led strategy which is apparently aimed at the increasing threat of the ‘discounters’ but is actually more effective in providing a counterbalance to inflationary forces like foreign exchange and a rising oil price. How long will they persist in this single minded strategy which causes friction with suppliers and farmers alike and actually appears to be reinforcing the discounters position rather than weakening it? Only Waitrose and M&S Food are showing any signs of growth and surely that observation alone is pointing to something more basic than price match promotions!
So what can supermarkets do in the face of a price led strategy which sees ‘Everyday Low Prices’ leading to ‘Ever Lower Performance’?
The options available to our main supermarkets are difficult – it is hard to turn off price led marketing unless everyone does, because the big risk is being left exposed and unless there is something else to fill that void, some other customer need which is emerging and not being satisfied elsewhere, we are left wondering how consumers will react. The likelihood is a continued drift toward the discounters or increasing proliferation of supermarkets used each week. To get a clear view we sometimes need to step back a few paces and observe. Look at things from a different perspective or think more expansively.
The Buzzz believe we are seeing two extremes of consumer behaviour: on one side we have online, functional purchasing and stocking up where the focus is on time saving, convenience and reliability; on the other side we see consumers seeking out experiential fulfillment. Farmers markets and street food / indie food festivals are becoming ever more popular and are only partly driven by local-ness. TV favourites like Great British Bake-Off which opened again this week, clash markedly with ‘Eat Well for Less’ and in two days evening viewing spells out the retail divide we are seeing between price driven functionality and ‘discovery’ on our TV screens.
Ultimately as consumers, rather than some kind of price comparison robots, we view shopping as a human interaction – we used to be known as a nation of shopkeepers because keeping a shop involved a huge degree of interaction with your customers. We used to ask our greengrocers and butchers for their advice on the best produce to buy in season and even how to cook it. But the degree of interaction with staff within our main supermarkets is limited to say the least and most often we hear consumers say they avoid it because they prefer to buy packaged food and look for promotional trade-offs when they shop.
But shopping used to be a multi-sensory experience. When The Buzzz looked at In Store Bakeries as a research project for a client over 10 years ago, we found they delighted shoppers – this was the part of the store which was engaging and appealing and involving, massively more than any other part of the shop, bar wine! We are shortly to revisit this work and already have seen a huge difference in the way supermarkets approach their in store bakery products driven by the focus on efficiency and price. Already we are anticipating a huge change in the emotional engagement scores within our new study, reflecting the soul-less, dull displays and commoditisation of any premium and speciality products.
So one BIG question we believe faces our main supermarkets is:
Can they continue to focus on a price driven strategy, while at the same time developing a greater level of engagement and experience while customers are in store?
Engagement drives impulse and context can override a whole set of inhibiting considerations based on ‘see it, want it’ stimulation. Impulse and variation is slowly drifting out of consumers regular shopping patterns unless they are stimulated by something like M&S Summer Festival of Flavours where customers are encouraged to trade off price for experience.
Morrison’s is one supermarket brand that is playing at both ends of the scale between functional excellence (hopefully a product to come from its much publicized tie in with Amazon Fresh; and Market Street at least at its inception promised a different experience. Several years on it has to be the quietest market I have ever been to. No hawkers declaring what is best value today; no demonstrations of how to dress a joint of beef; no brassy invites to sample some cheese you may never have heard of. It is simply a different store layout and one shoppers have become so used to they walk through it almost oblivious to what lies behind the counters – as such in the context of this opinion piece we have to view this as a missed opportunity.
What would it require for supermarket brands to deliver in store experiences that leave a real emotional legacy? It would certainly challenge the current business model – they would need to train staff on how to interact with customers to deliver a different type of experience; this may need more staff, not less. Is the time now appropriate to use technology to deliver new experiences based on interaction and knowledge which invites selected customers to try a new product, based on their past purchase history? Do they experiment more with context and build atmosphere within categories around the store? Geo-fenced areas of the store can stimulate activity delivered to smartphones based on proximity. Could ideas like this be used to get over the purse full of vouchers which is rapidly becoming out-moded and frustrating to customers we talk to?
It appears none of this is do-able in the current climate, but that maybe because the current entrenched view of the world cannot see beyond the next quarter’s performance delivered by Kantar.
So here is a thought. Reflect back a little less than 5 years when beer / ale consisted of three or four major brands piled high in large boxes on a rotational promotion cycle. Contrast that with today where the same amount of space is given over to a vast array of regional /national brands and local craft ales. Choice, discovery and experiential experimentation all grouped together in a space where men gather on a Thursday and Friday and exchange views – conversation even. Okay so not the kind of conversation you have in a pub and that opens up a whole side debate around on versus off-trade; but this may be a pointer to the type of experiential change that needs to happen to get beyond price and provide supermarkets with a way to sell a different ride to that of the price merry-go-round.
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