Data is the key to the supermarkets’ power

Mark%20ChouekeWal-Mart has overtaken Coca-Cola as the world’s most valuable brand according to the Brand Finance Global 500, a survey which has run since 2007. It is the first time that this list of the most powerful 500 brands on the planet has not featured Coke as its number one.

Who would be surprised that the brand which rose three places to knock the soft drinks giant off its perch is a grocery retailer? Food retailers, in any developed country, are currently the most effective marketers on the planet. The major reason is simple: what they sell, we need.

But there are other factors at play. Their knowledge of us as customers, our needs, our lifestyles, our values and our purchasing behaviour, built up over many years and re-examined every day, is incredible. They combine this data on their individual customers with an enormous variety of information concerning every external factor possible to terrifying effect, including the day’s latest market trends and the weather.

I remember attending a retail conference a couple of years ago and seeing Bruno Monteyne, systems development director at Tesco, talk about the accuracy with which the supermarket chain could use its own systems to predict late, previously unforeseen changes in the weather. He went on to describe the speed with which Tesco could react on a national level to, say, a sunny forecast turning into a wet weekend to make less room on shelves for barbecue food and more room for lettuces (which, he told his audience, sell in greater volumes on rainy days for some inexplicable reason).

There are other sectors that use data impressively well, such as the financial services industry, which pours bucketloads of resources into sustaining the quality of its data. Indeed there are also retail brands outside of the grocery sector that have demonstrated the ability to build up incredible knowledge of their customers. Think iTunes, which has, in the words of Jon Ingall, founder of agency Archibald Ingall Stretton, taken the Amazon model to a new level and now looks like “good old fashioned catalogue direct marketing on speed”.

But rarely has another sector combined retail’s complete picture of its customers with the ability to please or excite those customers in such a variety of ways in both the short and long terms. Banks are, like retailers, necessary. Yet they cannot hope to be as loved and cherished as a favourite supermarket. The fact that banks are on their knees in terms of popularity and trust simply presented an opportunity for the likes of Tesco to expand the financial services it offers and open banks across the country.

The flexibility that supermarkets can leverage both in food and the growth area of non-food is surely the envy of most other brands. If one promotion isn’t delivering? We’ll try a different one. Let’s switch a “3-for-2” offer from one aisle to another to sustain some excitement. The latest figures show our brand has lost market share and shoppers to a rival? We’ll look at the data and throw some personalised offers through the door of our former customers to lure them back. Is it that simple? Of course not. I’m being a touch facetious. But then it isn’t that far from reality either. Take Waitrose’s decision to scrap online delivery charges. Presumably it spotted that it would lose less money than its rivals by doing so – a deficit of 50,000 from its modest 10,000 online orders per week according to one Sunday newspaper. Taking the existing high street price war online means Waitrose’s rivals are now forced to consider doing the same.

Such a seemingly consumer-friendly move does actually come at a cost. Inevitably in the grocery retail world, the squeeze will be felt by suppliers, many of whom already operate on incredibly tight margins. But that’s the supermarkets for you. Always ready to increase pressure on their manufacturers’ brands if it means growing consumer affection for their own.


Specsavers campaign promotes hearing aids

Marketing Week

Specsavers is launching a TV campaign to promote the fact that the glasses retailer also sells hearing aids. The “Hearing Dog” campaign, created by its in-house creative team, breaks on April 20 and features an animated dog created by Hibbert Ralph Animation. Aimed at older viewers, the ad opens on a long-suffering pet dog who […]

Philips pushes restructuring plan forward amid losses

Marketing Week

Philips, the Dutch consumer electronics company, has posted a first quarter loss of 57m euros (£51m), and now plans to fast track a major restructuring plan. The economic downturn led to a sales fall of 17% to 5.1bn euros (£4.56bn). The company is planning to achieve savings by over 500m euros (£447m) by the year’s […]

ISBA urges EC to quit legal action over Phorm

Marketing Week

ISBA, the British advertising body, has hit out against the European Commission’s (EC) decision to launch legal action against the British Government over behavioural targeting firm Phorm. On Tuesday the EC said it had received complaints from UK citizens and Members of the European Parliament saying that Phorm had been tested on the BT network […]


    Leave a comment