2013: The year in retail

The most successful retailers are investing in content and social media as they attempt to bridge the gap between physical and digital commerce. As competition rises, creating a two-way dialogue with customers is more important than ever in impacting the purchase journey, driving loyalty and ultimately boosting revenues.

Trust and how to lose it

The year started badly for food retailers with the horse meat scandal. Meat products from burgers to lasagne sold by companies including Tesco, Iceland and Aldi were found to contain horse meat, prompting an investigation by the Food Standards Agency.

All of the brands directly linked to the scandal attempted to quell growing public disquiet by launching press campaigns or online initiatives. However, brands’ reputations were hit in the wake of the crisis, with the majority of UK supermarkets suffering a drop in perception.

Morrisons was a notable exception. No horse meat was found in its product and it took this as opportunity to highlight its quality and provenance, key to building consumer trust.

Price Matching

Tesco waded into the at-checkout price matching arena this year, launching its “Price Promise” scheme in a bid to take on Sainsbury’s “Brand Match”. The two firms immediately clashed, with Sainsbury’s accusing its rival of making unfair comparisons and referring Tesco to the ASA. That complaint might have been rejected but it has since lodged legal proceedings.

Meanwhile, Asda’s CMO accused both firms of being “anti-competitive” by trying to match each others’ prices, rather than beating them.

Price remains a huge part of the marketing mix for retailers, particularly in the grocery market, which is more competitive than ever as the big four face pressure from both the high end and the rise of discounters such as Aldi.

M&S, a tale of two businesses

M&S’s food division goes from strength to strength and market share and sales are rising. Its general merchandise division, which includes fashion, however, continues to see sales drop.

The retailer has focused on marketing to turn this around, launching its “Leading Ladies” campaign and revamping stores. However, so far these have had little impact. All eyes are on its performance at Christmas.

High Street Recovery?

With the economy improving, hopes were that high street retail would pick up this year. However, as yet there is little sign of this as consumer incomes remain squeezed and online continues to steal revenues. A report earlier in the year suggested that one in five high street stores could shut in the next five years as consumers increasingly shop online. Plus high street retailers are still going into administration, with Blockbuster the latest casualty.

Convenience is king

Convenience is the new front in the battle for dominance in the retail world as companies look for ever more convenient ways to get their goods to customers. Click and collect is increasingly popular with both consumers and retailers. Ebay’s deal with Argos to open pick-up points, Asda’s plans to open collection centres at tube stations and Waitrose’s launch of automated temperature-controlled lockers are just a few examples

In delivery, retailers are aiming for faster turnarounds and tighter time slots. Supermarkets will now let customers pick one-hour periods while eBay and Amazon are trying to make same day delivery work. Amazon took this further than anyone else this year, claiming that in five years there might be unmanned drones flying around major cities delivering packages.

Christmas campaigns as events

Retailers played it safe in their festive ads this year, keen to avoid the complaints in the crucial Christmas period that some suffered from last year. Most notable in 2013 was Sainsbury’s campaign, which moved away from its usual focus on product to promote a 50-minute film that reveals how Britain celebrates Christmas.

Elsewhere, John Lewis yet again captured the heart of the nation with its animated story of the bear that has never seen Christmas. It is making a concerted effort to exploit interest in its ad this year, selling merchandise ranging from onesies to bear and hare cuddly toys.

Tesco went down the nostalgia route, while Morrisons chose gluttony, advertising a festive spread fit for an army. Asda eschewed the spirit of Christmas, instead to choosing to take digs at its rivals.