Many retail executives with initial FMCG careers can establish their credentials as brand marketers turned super-marketers.
When I was at Asda 20 years ago, some older customers in Yorkshire while shopping for their groceries called it “doing their marketing”. And this, fundamentally, is still what retailing is all about: the buying and selling of goods in the market.
Forensic understanding of the market is the Holy Grail of the consumer goods sector and the level of investment in consumer research by the FMCG majors is one of the least likely targets of recession-induced budget cuts.
Smarter retailers are taking note: at the NRF Convention in New York in January, Howard Levine, chairman and chief executive of 6,600-store chain Family Dollar, said his company has spent more on consumer research in the past 12 months than it had in the previous 10 years.
When it was announced in 2006 that Marc Bolland from Heineken would be the next chief executive of Morrisons it prompted the hackneyed cry “he’s not a retailer” - more loudly than cries about his non-British nationality. A consummate marketing man, Marc’s achievements in Bradford have roundly confounded the agnostics. Yet these have now regrouped to question his suitability for the top job at M&S.
Pertinently, at the Retail Week Conference earlier this month, Sir Stuart Rose prescribed an untraditional future for M&S in purveying goods and services, in-store, online and overseas, as an “umbrella brand”. Cue stage left: enter the international marketer.
Few of Tesco’s customers these days are likely to describe their shopping trips as “doing their marketing”, but Sir Terry Leahy himself has been reported as saying: “I’m a marketing man by background and I do the CEO’s job from a marketing point of view.”
Many of his retail peers with initial FMCG careers can go further, establishing their credentials as brand marketers turned super-marketers. Allan Leighton was brought into Asda (first as marketing director) from Mars. Others followed the same inter-company route, notably Richard Baker, Justin King and Paul Mason.
Similar migrations from consumer goods to retail are happening elsewhere. In 2009 Lars Olofsson, having spent over 30 years at Nestlé, became the chief executive of Carrefour. The retailer, noting his “exceptional experience in consumer markets”, declared that his “sales and marketing expertise make him the ideal leader for Carrefour”.
Interestingly, executive moves from retail to consumer goods are far less common, so it’s tempting to conclude that brand owners make the better retailers. The language of the latter is sounding increasingly as if scripted by the former: customer-centric pledges to wed deeper understanding of consumers to improved levels of service, is currently as common a vow from retailers as their promise to cut costs.
But creating a brand does not derive, as too many retailers think, from simply putting a name above the shop door. That’s just a fascia. When Apple and Estée Lauder open their (coincidentally homonymic) MAC stores, they show why their retail super-brand status is so deserved.
If shoppers are “doing their marketing” then shopkeepers must do theirs too; and the brand owners will beat the fascia owners every time.
Michael Poynor is managing director of Retail Expertise