Talking at the third annual Mumstock conference this morning (15 march), Clarke said: “What we’ve seen over the course of three years is a number of businesses either enter the market or get close to collapse. We’re an incredibly strong and structured business, which is reacting to market changes. We’ve got a strategic plan that is very focused on the medium to long-term and not making short-term judgements or calls.”
He told delegates at the event that Asda is now focused on “reacting to those customer expectations”.
“I’m very confident that as time moves on that our strategy is going to win. We serve 20 million people a week and although there are challenges in the short-term, the more we focus on doing the right thing for customers in the long-term, we will win in this market.”
Asda recorded its sixth straight quarterly sales decline in January after reporting a 5.8% drop in sales over the festive period, but Clarke has said previously that marketing is not to blame for the supermarket’s poor performance.
Making the customer experience easy
Going forward, he said the brand’s major focus will be making the retail experience as “easy as possible” particularly for families and mums, whether that’s in-store or online, but he admitted that it is a challenge for all retailers.
“We’re focusing on [having] everything under one roof. Whether it’s everything under one roof on a smartphone, or everything under one roof as a store experience, having the ability to not waste time or go to 15 different stores to complete a shop is going to be as important in 15 years’ time as it is today,” he said.
In order to better serve customers who are mothers, Asda has been running its ‘Mumdex’ research for the past eight years, which now represents the views of 2,000 mums that are interviewed on a bi-monthly basis to understand “what’s on their minds”.
“As a piece of insight, it has given us very clear data and input strategically into how we run our business, and more, because mums tell us what they feel about the economy and the price of fuel, but also if we’re making mistakes or doing things right,” he said.
As a result, the supermarket’s business strategy is “80% driven by insight from pieces of work like this and 20% based on market trends and what is coming out of other countries in terms of opportunities. We market on that basis”, he said.
Asda segments all customers into six types, which takes into account demographics, ethnicity and profiles, among other things.
“Given the behaviours of these six customer types, linked with the insight we have available, we use it to show and share what we feel is best for [each] customer type. If it is a young mum [for example] then we have an own label range called Little Angels, which is lower priced and great quality, and we’d show the value of that versus the brands,” he explained.
Clarke believes there is value in segmenting mums into more specific groups and different family situations as outlined in Mumsnet’s latest research, which suggests there are 66 ‘identities’ that women with children identify with. He added: “there is even more opportunity to be more defined in terms of how we market” to mums.
Greater focus online
At present, around 92% of Asda’s business is in-store with the balance online, but that is growing as the market shifts, he said.
“Online food is becoming a bigger channel and is something we are ever-more focused on. The way families and mums in particular want to shop is changing and we’re conscious of reacting to that. We don’t get everything right,” he admitted. “We’re constantly working on how we can improve our business.”
One thing that particularly resonates with customers is Asda’s ‘one price’ strategy.
“It doesn’t matter the size of the store, what location, where it is in the UK, whether it’s online or offline, you pay the same price for your groceries, fashion or general merchandise – we think that’s a real advantage,” he said.
“Mums and families tell us that the consistency of their basket pricing is really important to them and that’s why we’ve stuck with that strategy over the past 25 years.”