The supermarkets standing up to be counted...
The current Covid-19 crisis has undoubtedly pushed many retailers’ operating models to the limit with the early days, in particular, punctuated by horror stories of panic buying and alleged hoarding of anything from toilet rolls to pasta.
Whilst Kantar and others have pointed out that it may in fact have been the finely honed supply chains of the grocers themselves rather than selfish, greedy consumers that may have been responsible for the swathes of empty shelves, interestingly the supermarkets have emerged as some of the genuine brand heroes of the Covid-19 crisis.
Prior to the 2020, the ‘Big Four’ had continued to struggle against the seemingly inexorable rise of the discounters. Kantar data shows that in the year leading up to the pandemic, only Sainsbury’s had held market share, whilst Aldi and Lidl continued to eat into market share for the rest of the major players.
The last few weeks, however, have seen something of a turnaround. Mike Coupe’s personal image transformation (pantomime villain after his infamous ‘we’re in the money’ ditty to assured voice of calm and reason) seems representative of the category as a whole. Contrast this with Richard Bransons open letter to shareholders and employees which seemed to bear all the hallmarks of a corporate comms team fire-fighting reputational damage.
Whilst we have rightly stood on our doorsteps and applauded supermarket workers amongst others for their role as key workers, supermarkets aren't stepping into the fray out of the goodness of their own hearts; undoubtedly, supermarkets will be some of the few organisations whose sales will actually grow significantly during the lockdown period (Nielsen data released this week shows that consumers made an additional 79 million extra shopping trips during March). However, it also appears they not only reap commercial rewards but also an underlying jump in positivity towards their brand.
Savanta’s Brand Vue tracker shows supermarkets seeing a 7% rise on average in positive buzz since the start of the year, with Tesco and Morrisons in particular, out-performing the pack (with 14% and 10% increases respectively)
Whilst there is clearly an underlying sense of goodwill towards these brands that are helping us keep our families fed and watered, supermarkets deserve a great deal of credit for how well they have responded. Despite often being portrayed as vast super-tankers flailing in the wake of competition from the small, agile discounters, they have managed to adapt a vast range of processes and seem to be constantly tweaking their operating model to stay ahead.
Contrast that with the likes of Homebase whose entire back office appears to have crumbled under a surge in online orders. Data from Kokoro shows that consumers recognise these efforts. Unlike both banks and other non food retailers, we have clear faith that supermarkets will get things right.
Whilst all might not be well in the Morrisons boardroom after a tough Christmas trading period, I think they, in particular, deserve a huge amount of credit for keeping the customer squarely at the forefront of their thinking.
I am sure I’m not alone in having had to operate as remote IT support for elderly parents or in having to order items online on their behalf when struggling to operate a particular website for the first time. How fantastic then to see a brand like Morrisons rip up the digital rule book and establish a telephone ordering service designed specifically for vulnerable, elderly shoppers who may be struggling to get themselves set up online.
Almost in parallel, they announced that more digitally savvy segments can order up to 70 items through a partnership with Deliveroo, with delivery times as short as 30 minutes and it is the coupling of these two initiatives that really caught my eye.
Too many market segmentations end up as a glossy infographic within the marketing team without ever managing to influence the customer facing processes of the business. Whereas what Morrisons have demonstrated is the importance of considering the needs of distinct market segments and adapting your proposition accordingly; the same offer (goods to your door) delivered in the right way for different sets of customers in very different ways.
In the short term at least, whilst the 'Big Four' are benefiting from a booming grocery category (Nielsen estimate the a 20.5% increase in till rolls during March), none of the Big 4 have seen an increase in share. It appears many shoppers are balancing their weekly big shop with trips to local symbols or independents. The question is whether, in the longer term, shoppers will remember the how these brands have stood up to be counted over these past few weeks and also whether some of the agile approaches these brands have adopted can help them stay ahead...