April 27, 2010

48) Waitrose

wēi  danger

The big UK supermarkets are increasingly under attack for pressuring their suppliers and destroying the traditional British ‘high street’.  But, for the bulk of UK consumers value, choice and convenience remain the most important selection criteria for their choice of food retailer.  As supermarkets expand (because they address these criteria better than many of the alternatives) they are likely to feel the backlash more, particularly as they grow their high street presence with the rising ‘convenience format’, (stores that are smaller than average and retail a selection of key ranges). For example, in September 2009 Waitrose announced plans to increase its numbers of convenience stores to 300 over the next 10 years after successful trials of the format. Given this expansion Waitrose will surely increasingly feel a backlash from consumers?

jī opportunity

Perhaps not, Waitrose recognizes the importance of engaging with local communities.  Waitrose has always donated a proportion of its profits to charities but its challenge has often been in having consumers value this philanthropy.  Its Community Matters scheme, launched in 2008, tackles this challenge in a smart way. The scheme gives each branch £1,000 to share out between three local good causes each month. Customers vote for their preferred cause using a green token they receive every time they shop and the money donated to each cause is directly proportional to the tokens they receive. I’m always amazed at the time consumers spend to choose the charity they will give their token to – surely a reflection of how engaged they are versus traditional approaches.

How About…

  • Involving consumers in decisions to increase their engagement?
  • Making strategic decisions around what type of social impact will be most valued for your business, e.g. local or global?

here’s the collection box in my local Waitrose – I’m always intrigued to see which charities shoppers prefer…  I also wonder if people tend to default to other shoppers’ choices (and fill the most full section) or try to support the underdog…

August 25, 2009

3) Riverford Organic

riverford 500 width

危  wēi  danger

For Riverford Organic, a UK-based organic food producer, selling to the increasingly powerful large supermarkets would potentially be painful – the big 4 retailers hold all the cards.  Although the nationwide supermarkets unlock volume, it comes with serious pricing and supply control pressures.

机  jī  opportunity

Riverford Organic found a way to sidestep these dangers – they started selling ‘vegetable boxes’ straight to the consumer.  This also enabled them to celebrate their seasonality, predict demand better (by setting up many customers on a direct debit) and to communicate directly to the end consumer.  In order to meet increasing demand Riverford also set up a co-op with other organic farms – enabling them to deliver to 20,000 homes in 2005.

How about…

  • shifting the pricing model to subscription from units to make the customer stickier
  • dropping a step from the value chain, perhaps even the retailer

August 23, 2009

1) Waitrose

as good as going out

- wēi – danger

The recession promised major changes in consumer shopping behaviour, largely shifting the premium base to value. This was widely expected to be a disaster for Waitrose.

- jī – opportunity

Waitrose had other ideas, they launched an Essentials range but they also played with messaging. The success of the “As Good As Going Out” ready-meal range was particularly impressive – the sales increased 44% year on year as the recession bit. Waitrose had hit on something – they had positioned the range as a lower cost alternative to eating out (rather than an expensive meal in).

How about…

  • repositioning your offer to help consumers benchmark you against a different competitive set