Morrisons unveils five point marketing plan to revive fortunes

Morrisons is taking what CEO Dalton Philips says are ‘bold’ steps to mitigate the impact of the discounters after posting a pre-tax loss in its latest results. It has announced a £1bn investment in its pricing and proposition over the next three years and a reinforcement of its position as a ‘value-led multichannel retailer’. It has also acknowledged it needs to better communicate what it stands for through a focus on a ‘values without compromise’ brand message, improved in-store experience and ‘unique to market’ loyalty programme.

morrisons
Morrisons isn’t planning to get rid of brand ambassadors Ant and Dec

A “values without compromise” brand message

Philips, speaking at a press event to announce its results, announced  it will make “value without compromise” the centrepiece of a “focused and consistent” communications plan this year.

“Customers need to know what we stand for and then they can reappraise us,” he added.

Constantly “banging the drum” about its points of difference

There will be no huge shift in marketing strategy. Philips insisted Morrisons isn’t planning to get rid of Ant and Dec or stop focusing on its “Market Street” fresh food proposition, despite analysts calling it “uninspired” and “ill-timed”.

He said Morrisons will “continue to bang the drum” about its fresh food because it allows the retailer to “play tunes that others can’t”.

“It’s about a constant drum beat and the whole marketing programme working together,” he said.

There will be an increased focus on pricing, however. Philips said Morrisons needs to address the perception that its products are more expensive than the discounters. It started the strategy four weeks ago with its “Prices Nailed Down” marketing campaign and has since upped the ante by running ads claiming it now has the cheapest milk in the supermarket sector.

Philips says this is already paying off, with sales of packs of peppers up 5 times since it reduced the price to 99p. He believes once people see that its prices are comparable, they will return to its stores because of its focus on other areas, including quality, service and shopping experience.

“Fundamentally it’s about communicating our distinct points of difference which we think will really shine through even more when we tighten up our pricing,” Philips told Marketing Week.

“This year our marketing will focus on lower prices and winning promotions. We’ll lead that communication through our brand advertising and highlight our fantastic value, supported by our unrivalled service and skill in making and selling great quality fresh food.”

Improved in-store experience

Morrisons prides itself on its service, but customer complaints have been mounting over lengthy queues and the lack of staff available at fresh food counters. The retailer now wants to make its stores more “pleasant and clearer to shop”.

It has already taken down the walls around its fresh food offering and increased its visibility, as well as freeing up more staff to focus on “value-added tasks” for customers. It is also planning to reduce its range by 20 per cent to make it easier for customers to find the products they want to buy.

“We will be a different kind of supermarket – not a discounter, not a hypermarket. We are reducing range so it’s easier to shop and offering expertise where it matters most to customers,” says Philips.

A “unique to market” loyalty programme

Morrisons has lagged behind its main rivals in loyalty, offering only a “Morrisons Miles” programme that lets users get money off their shopping when they buy fuel with the retailer. The problem with that scheme is that while it has 5.5 million members, Morrisons has no idea who they are.

Morrisons needs to change that, Philips said. Starting this quarter, it will begin the process of getting cardholders to register. Then it will move on to the other 12 million people that shop in its store every year.

The supermarket has already said it will launch its own “Morrisons Card” this year, with Philips promising a scheme that is “unique to the market, customer focused and distinctly Morrisons”.

“Getting to know our customers as individuals, who they are and what they want, will enable us to serve them a lot better,” said Philips.

“Fewer and more impactful” promotions

Promotions will still be important for Morrisons, but the supermarket is planning to cut down to focus on “winning” deals, preferring quality over quantity. It says it spends £1.5bn every year on discounts but is now planning to cut that figure by 10 per cent, offering “fewer and more impactful promotions that really drive footfall”.

The loyalty card will be important for that, helping Morrisons work out which products to put on offer when and with what mechanic to ensure they are beneficial to customers, he said.

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