Case study – The Co-operative Group

Tax hikes and reducing disposable incomes mean retailers are facing their toughest time in decades keeping customers loyal and spending. Staying ahead in the high street requires a major rethink of traditional strategies and systems. Find out how The Co-operative Group plans to stay relevant in the retail sector below.

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Screen dream: New technology such as baskets that tell shoppers where their favourite products can be found, are on the cards at The Co-op


Following last year’s supermarket refit and the group brand campaign featuring the Bob Dylan song Blowin In The Wind, The Co-operative will now start to target people “with a relevancy that is almost scalpel-

like,” according to director of marketing Patrick Allen.

This will be done through a major segmentation study to engage people with different parts of the group, which includes a supermarket business, travel agent, bank and pharmacy.

The retailing and service group is now concentrating on having clear proposition teams for each part of the business in order to make its offer clear to customers. It is applying some new retail rules to achieve its aims.

The Co-operative is primarily applying rule two – testing technology – to its supermarkets. It will trial technology that enables shoppers to put their membership cards into an in-store shopping basket then read a screen which will tell them where all the last items they bought can be found or if and where they have been moved.

People can also scan produce with an iPhone app to see the name of the farm on which it has been grown, with a link to Google Maps to show its location.

Shelf-edge laser technology is also on the cards for the Co-op, allowing those buying Fairtrade goods to see a 3D hologram of the project their purchase supports, or allowing brands to play commercials in front of products.

Its membership model, which puts customers at the centre of its business, is being used as a marketing tool to promote people products across its other services, such as banking and travel.

Allen says the model is being used to encourage people to get involved with their communities. “If, for example, customers are buying certain products – such as a bottle of water which will donate to the community – we can involve customers in the selection process and running of those projects,” he says.

While the nature of a co-operative is that it is run by its members, who are also customers, Allen admits there is a way to go before consumers are put first, even though the group is forward-thinking in terms of its social goals.

“It’s about moving from being a trading-centric organisation to being a truly customer-centric organisation. We are now starting to address that, but it’s fairly early days if I am honest.

“Do I wish we were further down the track? Yes. Do I think we understand a lot about our consumers? Yes we do. We tend to know about the shops and how to run and fill shops, rather than understanding how the trends are shifting among consumers,” he says.

For Allen, technology and innovation are key for the future of The Co-operative. “There are only two things that matter to me in this business and that is marketing and innovation. If you lose those two things then you are pretty much dead in the water, because all you’ve got to compete on after that is price.”

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