Morrisons, John Lewis, Next: 5 things that mattered this week and why

From John Lewis overhauling its brand purpose and Morrisons’s new CMO to the Marketing Week Masters Awards, catch up on all the biggest marketing news from the week gone by.

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Morrisons names Sainsbury’s brand boss as new CMO

Morrisons is on a mission to become a “broader, stronger business” after having capitalised on the lockdown boom in supermarket sales. The retailer continues to outperform its ‘big four’ rivals, with sales up 12.9% in the 12 weeks to 6 September, according to the latest Kantar data. By comparison, Tesco grew sales by 10.5%, Sainsbury’s by 8% and Asda by 6.3% during the same period.

In a bid to maintain this pace of growth, Morrisons has appointed Sainsbury’s marketer Rachel Eyre as chief customer and marketing officer as it looks to develop “the next generation of retail talent”.

Taking over from Andy Atkinson, who was promoted to group commercial director in February, Eyre will report into chief executive David Potts when she joins the supermarket in 2021 and sit on the executive committee, helping the wider leadership team “respond to Morrisons customers”.

Her role will encompass customer insight and marketing communications, including advertising, in-store and targeted marketing. She will also oversee the local solutions, customer services and PR teams.

Eyre, who is currently group head of brand communications and creative working across Sainsbury’s, Argos, Tu and Habitat, comes from an innovation background. In 2018 she launched Future Brands, Sainsbury’s incubator programme sourcing, creating and onboarding distinctive challenger brands.

Her experience in innovation will be key for Morrisons as it looks to push forward with a series of new initiatives kicked off during lockdown, including the launch of a food box business and the introduction of a Deliveroo ‘dark kitchen’ at its revamped Manchester Piccadilly store.

Sustaining this pace of innovation and differentiating the brand will be key areas of focus for Eyre if Morrisons is to maintain its edge over its ‘big four’ rivals as the UK enters recession.

READ MORE: Morrisons poaches Sainsbury’s brand boss as new CMO

John Lewis plans brand overhaul

John LewisThe massive shift in consumer behaviour during the Covid-19 outbreak is having a clear impact at the John Lewis Partnership.

As lockdown took hold, the group’s customers turned to online shopping with gusto. Waitrose.com saw 133% growth, recording nearly a threefold increase in order numbers compared to pre-pandemic levels, helping the business achieve its three-year expansion plan in a single year.

John Lewis saw a 79% spike in its online sales – a move which partially conceals a bigger truth. The chain used to calculate that £6 of every £10 spent online could be accredited to a physical store visit, but it has now halved that figure. Overall, 60% of sales are now online.

The group is planning big changes to match these shifting consumer preferences. A new, modernised, group-wide purpose is set to be unveiled next month as the company seeks to clarify the social enterprise stance that has helped make it so popular with shoppers. John Lewis Partnership chairman, Dame Sharon White, described purpose as the “absolute foundation stone” of all the organisation’s plans going forward.

In addition, more services are being introduced and a re-evaluation of physical stores may see new uses for space. White described ongoing trial schemes, such as the John Lewis furniture rental service, rebates for returned clothing items and reductions in the use of plastic as being “consistent with the direction of travel”.

While only time will tell how the modernised brand purpose will take shape, it is likely the ‘Never Knowingly Undersold’ price promise in its current form will be consigned to history.

READ MORE: John Lewis poised to unveil ‘modernised brand purpose’

ITV, Tesco and BT Sport win big at the Marketing Week Masters

AwardThe much anticipated Marketing Week Masters Awards were announced this week, with Tesco crowned ‘Brand of the Year’ and ITV CMO and director of direct-to-consumer, Rufus Radcliffe, named ‘Marketer of the Year’.

Tesco won the coveted award for its response to the coronavirus crisis. Its ‘Some little helps for safer shopping’ campaign was found to be among the most effective of any brand in the initial stages of the pandemic, according to Kantar data.

Tesco’s winning streak didn’t stop there. The supermarket scooped a further three awards for ‘Social Media’, ‘Sponsorship and Partner Marketing’ and ‘Multichannel Marketing’.

ITV also joined the winning pack, having claimed the prestigious ‘Grand Prix’ award, alongside the accolade of ‘Marketing Team of the Year’. The broadcaster was also recognised for its ‘Britain Get Talking’ campaign, which encouraged more than 700,000 people to take action to improve their physical and mental health, with the awards for ‘Brand Purpose’ and ‘Content’.

Elsewhere, BT Sport proved to be a big winner, scooping the awards for ‘Data Driven Marketing’, ‘PR and Brand Storytelling’ and triumphing in the ‘Sport, Gaming and Entertainment’ category.

The broadcaster also won the award for ‘Best Use of a Small Budget’ after ramping up performance with its ‘Unscripted’ campaign, despite being on a reduced marketing budget and operating in a highly competitive market.

READ MORE: Tesco, ITV and BT Sport win top prizes at the Marketing Week Masters Awards

Next turns marketing back on after £21m lockdown saving

NextNext is ramping up its investment in marketing after its decision to pause digital marketing, stop printing catalogues and cut its investment in photography generated savings of £21m during lockdown.

CEO Lord Wolfson explained that the retailer needed to turn marketing off to regulate demand after its warehouses were forced to shut to become Covid secure. At the height of lockdown demand was such that Next had to shut its website in the middle of the day as orders were outstripping capacity.

Since then Next has turned marketing back on and expects expenditure to return to normal levels in the second half of the year. The retailer used the time during lockdown to focus on accelerating new developments, partly spurred on by the pandemic and partly because the business has become more “open-minded”.

One such avenue of growth is Next’s ‘Total Platform’ service, which sees it host the website, call centre, distribution and retail systems for another brand – essentially enabling them to trade online. Just an idea six months ago, Next has now onboarded its first partner, the luxury childrenswear brand Childsplay Clothing.

The company will use its Total Platform service to run the UK and Ireland web operations for Victoria’s Secret. The retailer signed a joint venture agreement this week to sell Victoria’s Secret and its sub-brand Pink under licence across the UK and Ireland. The plan is to retain 18 Victoria’s Secret standalone stores, while also selling some ranges on concession in selected Next stores.

Along with the launch of a new branded beauty hall retail concept, mixing beauty with accessories and home, Next is confident about prospects for the second half having managed to turn a £9m profit in the half year to July 2020, albeit down 97% on 2019.

Online sales already make up more than 50% of sales and with the Total Platform service enabling Next to deepen its relationships with other brands, the business believes it has hit on a recipe for success even in the event of a second national lockdown.

READ MORE: Next reinstates marketing investment after £21m lockdown saving

FMCG brands shouldn’t forget about older eco-warriors

When you think of eco-warriors you often think of young people donned with multiple badges protesting with Extinction Rebellion, but you would be wrong. When it comes to the most environmentally conscious consumers it is the over-35s who are most likely to shop ethically.

New research from Kantar, which studied 80,000 people across 19 countries about their environmental concerns, found that older people were more likely to shop ethically than younger people.

Of course this is largely due to having a higher disposable income and the freedom to choose, but the news may come as a shock to some brands. This being said, it doesn’t mean businesses should ignore younger people, as the rsearch found the main influencers on people’s behaviour are their children.

Brands need to pay attention as environmentally conscious consumers account for £1 in every £5 spent on FMCG products, with the most sustainability-focused shoppers worth $382bn (£297bn) to the sector.

In terms of what to do, Kantar found the main solution consumers are looking for is sustainable packaging, which may be because they want to be able to buy the products they’ve always bought “guilt free”.

Brands do, however, need to be holistic. Consumer’s won’t be satisfied with just a packaging swap if there isn’t a whole business plan to help the environment.

READ MORE: FMCG brands could claim $382bn by targeting ‘eco-active’ shoppers

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