By harnessing social media retailers can give customers what they want, says Rick Bendel.
A year or so ago we decided to hand over quality control to our customers. It was a huge leap of faith for a retail business like ours that takes pride in understanding what our customers want. But it was clear to us that word of mouth marketing had been elevated to a new level.
Fed by the rise in technology and ease of access to the web, peer-to-peer endorsement was now turbo-charged.
This shift in consumer behaviour led us to a profound customer insight - the most powerful endorsement of our products would not come by having a celebrity chef on our payroll, but from shoppers themselves.
We set about transforming the largest part of our business, which accounts for 80% of our own-label sales - equivalent to between £8bn and £9bn a year - and created Chosen By You. The results have been dramatic.
In February we reported that sales of bakery products had risen by 6%, cakes by 20%, ready meals by nearly 11% and pies up 8%. Our Chosen By You yoghurts had seen an uplift of more than 80%.
Customers, who had endorsed every single product in the range through a series of unprecedented blind taste tests, were voting with their wallets.
By involving customers from the outset we have also learned a huge amount about their changing tastes.
Toffee, it turns out, is the new chocolate when it comes to ice cream. Orange fruits are preferred to red fruits when it comes to yoghurt, and in the world of cupcakes, lemon flavoured with a daisy on top hits the sweet spot - so much so that when we advertised them on TV we sold more than 1 million in a week.
We have now extended Chosen By You into all of our core grocery categories, even seeking customer endorsement for non-edible products, ensuring our cleaning detergents have been tried and tested before they are allowed into store.
As a result Chosen By You is now the fastest growing mid-tier own-label range in the market according to Kantar. We haven’t sought to grow sales by creating a new premium tier - we’ve bucked the trend and invested in the core, focusing on the items found in every basket, every week. And our strategy is paying dividends.
So what does this mean for retailers? There are still plenty of brands scratching their heads wondering how best to harness social media, conscious of not wanting to miss the boat.
“Social media is a free, massive focus group, taking place in real time”
First you need to recognise that thousands upon thousands of conversations are taking place every day about your products, your services, your stores and your staff. So you need to start listening to what is being said.
At Asda, social media has helped us gain an even better insight into what our customers really think, how they really feel, and ultimately what they really want from us.
These days, whether it’s booking a hotel, selecting an item of clothing, or choosing where to eat out, the critics are people like them who have already posted a review.
Social media is not just another sales channel, it is a free, massive focus group, taking place in real time. And it is taking place with or without your permission.
So switch off at your peril.
Rick Bendel is global chief marketing officer at Asda