Wednesday, 27 June 2012

The First Commandment of Selling - Know Thy Customer

Anyone who operates in the food chain is regularly told that we need to understand the consumer. Now, propelled by low growth markets, and the rise of technologies which allow personalised consumer contact, the race to lead the way in consumer understanding is becoming increasingly intense.

The consumer as ever holds the key to business success or failure. When, as now, markets are flat, the only way to grow sales is by stealing market share, and the only way to steal market share is to satisfy customers better than the competition.
It is easy to drift away from understanding what it is about a business that makes it appealing. ASDA forgot that its customers went to them because of lower prices, sprang into action by promising that they would be 10% cheaper than anyone else, and have started to recover market share. More controversially, Morrisons who are facing some growth difficulties have been lambasted by its founder Sir Ken Morrison for going too upmarket and forgetting the needs of core customers.
Whilst those two examples are about broad strategy, it is clear that “know thy customer” marketing activity is getting much more precise, and technology allows this to happen.

No longer is it enough to track an individual’s web viewing through “cookies” and flash up a message on the computer screen, or to send a general email to customers announcing events like a sale or special promotion. Now retailers are striving to send tailored communications which closely reflect the interests and previous spending patterns of their customers.

Thus we see Tesco’s Philip Clarke in a speech entitled “Follow the customer or die” a couple of days ago saying they would be using Clubcard, held by some 18million people, to categorise their shoppers into age, number of children, and  wealth categories based on recent purchases. The information is then tailored to suggest to online shoppers what they should buy. The action follows from Tesco’s recent decision to categorise their stores according to neighbourhood, changing the range of goods stocked to match the spending power of the people who shop there.
It is this pursuit of ways to tailor messages to consumers which led to Facebook commanding what some might call a ludicrously high price when it floated on the stock market. Enthusiasts reckoned  that with 100’s of millions of members most of whom used their Face book page every day there had to be a way of translating this vast consumer contact into hard dollars. Of course the practicalities are leading to some having second thoughts now.

So as we are bombarded with messages at every turn, on our computer screens, smartphones, or even in the post, the key issue for any seller is how to balance giving consumers genuine and welcome information versus an unsolicited and irritating intrusion into their everyday lives and personal affairs. There is already some evidence of a backlash and it is likely to grow.

Thursday, 7 June 2012

GM Foods - What the Consumer Thinks

The recent protest against Rothamsted’s Genetically Modified wheat trial brought GM foods back under the spotlight, and perhaps the most interesting data to emerge was that published by the IGD which indicated that shopper attitudes to GM foods have hardly changed at all in the last nine years. In 2003, 14% of shoppers either strongly supported or tended to support GM foods versus 36 % who strongly or tended to oppose them. In spring 2012 the equivalent figures were 16% in the support camp and 33% were opposed. In both 2003 and 2012 just over 50% were not sure what to think about GM.

The views at either end of the spectrum have been formed despite shoppers acknowledging that their understanding of GM is sketchy. Just 21% of shoppers claim to have a good or very good knowledge of GM foods, and 8% claim to have a very poor understanding.

The data seems to indicate that scientists still have a long way to go in explaining the benefits of GM, and reassuring consumers about possible risks. They may take some heart from media reporting of the attack on the wheat trials, which was generally measured in tone, highlighting what the scientists aimed to achieve as well as outlining the views of those opposed.  The Guardian for example gave a considered response, saying that pressures on food supply anticipated in future years meant that science should not be ignored, and GM foods could have a part to play.

One set of stakeholders who have remained quiet are the supermarkets, yet their reaction is critical. During the last major uproar about GM they weighed up public opinion, decided that supporting GM could be damaging to their reputations and took the decision not to use GM in any of their own brand products, a stance which continues today. Tesco for example says on their website “Our research shows that UK customers don’t want GM foods in our stores. So naturally we don’t have any own brand GM foods on our shelves”. Sainsbury have categorically stated that they have no GM crops, ingredients, additives or derivatives in their own label. Supermarkets are unlikely to change this stance any time soon, especially in view of incidents such as the uproar which erupted in social media following news that Waitrose were selling a broccoli, which although not GM was grown from seeds purchased from a subsidiary of Monsanto, a company well known for its GM involvement. Supermarkets will only embrace GM once they are sure that those in favour significantly outweigh those against.

What the IGD data combined with supermarket attitudes tells us is that, for GM to become acceptable, the (extremely vocal) 33% who tend to, or strongly oppose GM, will need to soften their views,  and the 50% who are not sure what to think about GM will have to be persuaded of the benefits,

All of which suggest that it will be many years before GM technology is accepted in the UK’s food chain.