Lessons in marketing come from the heart

Rick Bendel loves to talk. Even before we start the interview, he is sitting in the lobby of London ad agency Fallon telling a story about dinner the previous night with somebody he hopes to recruit. He hasn’t properly finished before he’s into another tale involving a “dead of night” search for a missing person while on safari in Africa.

Wal-Mart’s new international chief marketing officer is often described as a reluctant interviewee, but when he’s speaking he seems relaxed and confident. It is only when he has to pause his flow for the photo shoot that he edges towards spikiness. At one point he chides the photographer for asking him to adopt a certain position. He doesn’t relax until it’s time to chat again.

Quick link –Q&A – Rick Bendel

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When we get to his pet subject of retail marketing, his enthusiasm hits evangelical levels. His urge to communicate appears to know no bounds. Appointed marketing director of Asda just three years ago after a successful agency-side career, Bendel sounds a little like a professor lecturing on his favourite topic.

The creativity and ingenuity in managing the recession is coming from the consumer – and us businesses are in a race. But we’re all in handcuffs and wearing balls and chains while trying to keep up with sprinters.

As such, it is fitting that his new international role allows him to educate the marketers of one of the planet’s most influential retailers. Put simply, Wal-Mart, the biggest company in the world, has identified Bendel as the person to set up and lead its new global retail marketing academy, a project to which the retailer is entrusting its future. He’ll be responsible for teaching the management of every Wal-Mart brand outside the US how to build a business around marketing.

Bendel, bristling that nobody outside the company has yet reported his new position accurately, explains: “We’ll put together a curriculum. How long each course lasts will depend on many different things, but each will incorporate plenary sessions, some practical workshops, some time working inside Asda as well as store visiting sessions.”

Is this Wal-Mart trying to create a consistency of message or methods across all its disparate brands? Bendel claims not. “Retail businesses are local businesses,” he says. “To rebrand everything as the same retailer is a hell of a task; to put an unfamiliar name over the door, very difficult. What it’s there to do is to educate people from India, Brazil, Puerto Rico, Canada, Costa Rica and Argentina.”

The education will involve the marketers from such different parts of the world coming together to see how their own retail marketing skills can be developed. He continues: “It has to be experiential. You have to see and feel retail to understand it.”

He intends to make everyone attending the academy “live in this world” to see how people shop, eat, work and how Asda in the UK develops its own-label ranges. He wants his students to understand that fresh produce doesn’t have a brand, so retailers can harness the “halo effect of food credibility” for their own operations.

Chasing [a market] is what Tesco does – that’s called allowing your trading to rule your marketing. And one thing traders do, they chase. They don’t understand consistency. We have a classic example right now in UK grocery retail of three marketing businesses versus one trading led business.

The global scale of Bendel’s new job seems a large step up for a man who only three months previously changed his title from marketing director for Asda to chief marketing officer. Yet Bendel says this was simply a matter of semantics. “The first change to my job title wasn’t a promotion, it was a gesture towards being with an American company. We were the only country that had what Wal-Mart considers strange titles like trading director rather than chief merchandising officer.” He intones the last three words in a cod-American drawl.

“Needless to say,” he continues, “I accepted all the kind congratulatory emails I was sent. The second one? Yes, it’s definitely a promotion.”

Some promotion. Still, since he is reporting to Asda’s president and chief executive Andy Bond, Bendel remains more Asda than Wal-Mart. Asda is, after all, still his first love, as it was for the 17 years that he was the supermarket’s main account handler at Publicis.

UK: home of retail marketing

It is surely a massive compliment to Asda as a brand that Wal-Mart would choose to base its international CMO role in the UK. Bendel pauses before saying: “Procter & Gamble invented the FMCG world. America owns it and hence all FMCG jargon is based on American terms – segmentation studies, that sort of stuff. But when it comes to retail marketing and retailing, the British are the world’s best. Concepts like private label, loyalty cards and home shopping are British.

“Here in the UK, marketers run retail businesses. Justin King, Andy [Bond], Marc Bolland and Terry [Leahy] are all marketers. You wouldn’t find marketers as CEOs of any other business apart from retail.”

This is a truth universally recognised, he claims. “When the banking world suddenly decided they were going to be brands, they hired from the retail world. The UK is the centre of the universe in retailing.”

He adds that basing the marketing academy in Britain is actually a “terrific compliment to Wal-Mart. As the largest retailer and company in the world, it says the company is sufficiently progressive and has the humility to recognise that having a centre of excellence for marketing in the UK would be smart because that’s where retail marketing was born.”

Elsewhere, says Bendel, global retail businesses have never really embraced marketing as a discipline of equality to trading or pricing. He believes that most retail brands were built by entrepreneurs who are not known for their love of marketing. In the US, corporations “generally don’t see marketing as something that can make a whole lot of difference”. He adds: “Wal-Mart bought Asda for its food expertise, not marketing expertise.”

Since then, however, the US giant has recognised the true value of its takeover of Asda. “They’ve seen the effect of our marketing, which we give an equal if not higher status than trading and operations,” says Bendel.

He tells a story of how Wal-Mart sent over Mike Duke, now president of Wal-Mart but then head of its international operations, to visit the supermarket. Bendel says that Duke was “fascinated by the fact that customers could be allowed into a business, that they could affect an entire trading strategy and could create a significant effect on everything from what we sell to change in our reputation.”

Duke’s encounter with Bendel and the Asda marketing machine was good timing for Wal-Mart. The US company had begun having to manage its reputation for the first time following some negative headlines over – among other criticisms – its failure to recognise unions.

In response, Wal-Mart started to market itself using some of what had been learned from Bendel’s operations in the UK. In 2007, Wal-Mart implemented a corporate mission statement summing up its new attitude: “Save money, live better”.

At the same time, it invested more heavily in its environmental initiatives and its business was transformed. “Surprise surprise,” says Bendel. “When they visited us, they saw the changes that we had made through marketing. They were knocked out.  These changes then had a dramatic effect on business in their own countries. So gradually Wal-Mart started to wonder: are we missing a trick here? We need to breed the sort of retail marketers we have in the UK in our other countries.”

Point of difference

Despite his pride in Wal-Mart’s UK-influenced marketing, Bendel appears almost American in his enthusiasm for his brand, naming Asda along with his family as one of his two passions in life. He is unafraid to position himself as a “consumer champion” and claims this is true of his employer too.

“We market our ‘truth’ – we are cheaper than our rivals. But consumers need not take our word for it. With the price-checking websites and the growth of home shopping, our prices are all over the web. Our ability to communicate our point of difference and use those price-checking websites in our marketing has allowed us to remain ahead of others in price perceptions.”

Bendel’s attitude led one chief executive of a media buying agency, who knows him, to describe Bendel as “the real deal, a tough guy, a streetfighter”. While this is perhaps a little superlative, he is not afraid of pulling the punches when talking about his fiercest rival.

“With the exception of Tesco,” he says, “everybody in the market is incredibly good at marketing their own truths. Marc [Bolland, Morrisons chief executive] arrived and recognised that the ‘More reasons to shop at Morrisons’ line is not actually what makes Morrisons different. He pointed to the craft skills in his stores and said ‘it’s a cost to us, it creates a premium in our price point, let’s use it’.”

Bendel credits Bolland with doing “a fantastic job” of re-educating customers that had previously been shoppers at Safeway, the supermarket absorbed into Morrisons’ portfolio in 2004. “He had a lovely soft underbelly of customers to go after because they still lived near their specific store. He said ‘let’s just go and tell everyone what we’re about’.”

He also praises Justin King, chief executive of Sainsbury’s. Bendel acknowledges that the supermarket has made a success out of its association with celebrity chef Jamie Oliver and a marketing push based on “new ideas” and caring about food.

While Asda talks about low prices to shoppers struggling in the economic downturn, Bendel admits that Sainsbury’s and Morrisons do a good job focusing their campaigns in other areas. “Recession forces you into action. If you can’t tell everybody truthfully that you are the lowest price like we can, but you have a strong understanding of why your customers love you and you adopt that into your marketing, you’ll succeed.

“What you can’t do,” he says pointedly, “is chase a market. When you try to put on the wig, the fake tan, and those tight trousers that you thought your wife was looking at a bloke in, you’re forgetting that your wife didn’t fall in love with you because of your tan and snake hips.

“So chasing, which is what Tesco does – ‘I’m a discounter, no I’m not, I’m about Finest, no I’m not, I’m about a loyalty card, no I’m not’ – that’s called allowing your trading to rule your marketing. And one thing traders do, they chase. They don’t understand consistency. We have a classic example right now in UK grocery retail of three marketing businesses versus one trading led business.”

Yet despite these assertions that Wal-Mart puts marketing at the centre of its business, the company has no loyalty card for its customers, something that is often cited as the reason for Tesco’s dominance of the UK retail environment.

Bendel is scathing about what he calls retail’s “ball and chain”, saying that people would rather save their pounds today than receive loyalty points tomorrow. He takes the view that customers would rather make their own choices about where to spend any saved money than be tied into a scheme where the retailer offers coupons.

He describes Asda as a “facilitator” and those relying on loyalty cards as “controllers”. He sees facilitation to be one of the most important trends in marketing today. Bendel claims the brands that are most trusted by consumers, like Google, help people to make their own decisions, rather than pushing corporate aims on them.

“We’re a facilitator; ‘here are 400 products for £1 each, you choose’,” he evangelises. “It’s accessibility through affordability. It’s a great thing to do. I’m a really lucky guy.”

Bendel places immense faith in the power of the customer to tell brands what they need to do. He sees a paradox in big business becoming increasingly constrained by regulation after years of misbehaviour, while consumers are more free than ever, more empowered and more creative.

“They decided for themselves that frozen food is a bloody good idea during a recession. And all the marketers and retailers pretended they knew it already while stocking up on frozen,” he says. “The creativity and ingenuity in managing the recession is coming from the consumer – and us businesses are in a race. But we’re all in handcuffs and wearing balls and chains while trying to keep up with sprinters.”

Bendel keeps talking even as he is gathering up his possessions to leave the room. He is convinced that what consumers feel about the brands they use is not only important for the recovery of the economy but for society as a whole.

Sects of society

“On one level, UK supermarkets are identical. Probably 80% of what we sell is the same, yet sit in a room with loyal customers of the big four supermarkets and they’ll see themselves as sects of society. One is a Sainsbury’s customer and one is an Asda customer. That means something to people. It’s not the same as being a Mars person or a Cadbury person. It’s not the same as being a Vodafone person or an Orange person. The greatest definition of people today is not Labour or Tory, upmarket or downmarket, it’s a Waitrose customer or an Asda customer.”

He points to Barack Obama’s comments that the “Wal-Mart mum” was a determining factor in the US election. Bendel says: “That’s him telling the world ‘You’re in charge. Institutions are no longer there. Politicians don’t change the world, you do’. It was a hidden thing we already knew, but it was massive permission to everyone to go and make the change. Most of the business world is in handcuffs. What a fantastic time to be a retail marketer. We’re liberated. Customers are defined. And that has nothing to do with segmentation studies.”