On shopping for groceries-I

Inspired by “A thousand small gestures” by Ellen Monaghan

Introduction.

Some time ago, I came across that post on my Linkedin feed.

In summary Ellen Monaghan says: a brand is the product of a thousand small gestures: it is about the experience, and Sainsbury offers one that is convenient, easy and considered across the board: the delivery man is trustworthy and if he’s early, he’ll ring to see if I’m in and will ask permission to deliver my shopping earlier than expected; in case of an order hiccup they will sort it quickly etc. etc. A ‘beyond my expectations’ experience and, as a result, the relationship with Sainsbury’s is truly cemented (quasi verbatim).

Being an experienced and fairly loyal customer of Sainsbury, I commented that I agreed but also promised the author I would add some comments to try an take the reasoning further. Here they are.

Methodology.

The methodology can be summarised as a “make my pound go further” approach and it includes, in a very unorthodox mix:

  • “Stress testing” (Heavy usage, spending a decent amount of money on Sainsbury with a view to making the system work for me as much as possible, on-line and off-line),
  • Comparative-competitive analysis (cheating on Sainsbury, comparatively, with-almost- anyone else, supermarkets and not-make a note this last one is key),
  • Observation (meandering about the aisles),
  • Accompanied shopping (including even my wife, which takes patience beyond love),
  • Taking Online Surveys for money (yes, mea culpa, mea maxima culpa),
  • Collecting and using Nectar points and vouchers ruthlessly,
  • Asking for a duplicate Nectar card, because I needed.

I had never really done any comprehensive strategy work in Food retail before…it was great fun and a journey of discovery.

The findings ended up going well beyond the scope of a single post. Maybe almost a pamphlet…so today you will find “only” reflections on the Problem: Shopping for Groceries, Supply side (Supermarkets) and Demand Side (Consumers).

The next episode (at draft stage today) will be about Sainsbury’s Brand Strategy to address that Problem, and it will be published in Mid-May because this blogger is just very busy these days.

The Problem. For everyone’s relief, let’s start with a graph.

Capture

In essence, there are win-lose behaviours as both sides try and achieve their goals.

Let’s go through the homework, notes 1 to 4 in the graph.

1: The Consumer-Good Game

  • Offers and promotions are ongoing and can make you save up to £20 (maybe more) on the price tag of a weekly family shopping of £80+ (two adults and a 2 year-old Mr. PacMan).
  • Taking on-line surveys can make you up to £10 a month in Sainsbury vouchers.
  • You get Nectar points on the nominal spend (higher) not on the actual spend (lower because of the above); after some patient/clever collecting you can redeem them, even on-line. Maybe another £2.5 off the bill each time.
  • Choosing the delivery slot carefully may mean £2 instead of £6: accountants tell us it counts as saving.
  • Overall roughly £35 off the bill and delivered to your door, timely and nicely.

Note 2: The Consumer-Not So Good Game

On the other hand, “We”-The Poor Consumer are not all that alert, or responsible, all the time.

In fact the Consumer seems to be swinging between two extremes: either they sleepwalk through the aisles (brilliant examples from AMV BBDO for Sainsbury’s), i.e. always buying the same old same old.

OR

They go compulsive: before 2008, a British Gas ad in the Tube depicted the quite common scenario of somebody who, instead of bothering to cook, was getting Thai take away plus bottle of wine for dinner.  £25 for one meal thanks very much.

From those days you may disallow:

  • The Crisis factor: maybe that scenario is no longer that extreme.
  • Now decent exotic ready-meals are available for £10-15 per household and you have the meal deals for £3 for lunch.

Still:

  • Lots of non exactly cheap eateries are still fully packed at lunchtime, and NOT just in the Square Mile.
  • Really we are all, be A, B, C1, C2, D’s, guilty of all those compulsive behaviours: singles, young couples, families. How often? Maybe two, three times a week for dinner, plus lunchtimes x no. of people in household…?

So you get my drift, the numbers are there…we probably do not really spend that clever and make our pound get that far for us. That is not minor point, I believe in individuals’ responsibility…

Note 3: The Supermarkets-Good Game

Carefully planned pricing policies and a strong mix of incentives do create some habit if not full-on loyalty: when I use “My Supermarket” to compare my shopping basket in Sainsbury vs. others, there is more or less no contest. You really “live well with less”.

Sometimes I get the option to save even more by arranging a combined Sainsbury /Asda delivery. However you now get Brand Match vouchers vs. Asda from Sainsbury anyway, not sure if online as well but surely in store.

So that is a good experience, as described by Ellen Monaghan. I would stick to Sainsbury then…

Note 4: Supermarkets-Not so Good Game

However it is not all that nice when you really try and squeeze all the Nectar out…

1) Loyalty schemes such as Sainsbury’s are not really working in your favour all the time:

  • How much is a Nectar point worth at Sainsbury’s ? 0.5p i.e. 0.5%?…well, every little helps…however, how many people are aware of this? I do not see that in big, block capitals when you join the scheme…the same goes for other schemes. Can we really compare and control?
  • Why can I only use my Nectar points on the “home” shop? This is something you only find out if you try and use your points in any other Sainsbury. Why should I not? I see the brand not the shop. Is it not the same brand in my Local in the City or in Fulham or in my Supermarket in Fulham Broadway?
  • Also, do points expire? I have found myself with less point from one day to the next in January without any apparent reason. It looks like points do expire but nobody seems to know, not last the good people at Nectar or in the shops. Where is it written?
  • The Nectar helpline is expensive and not precisely manned by geniuses: have you ever tried and explain you need a double of your Nectar card key fob? Good luck…horrible experience indeed and worse results.
  • On a less negative note, you can indeed use your Nectar points when you shop on line BUT that costs you going through a number of FAQ pages and a not so straightforward process. Overall, no full marks on transparency and usability.

2) All this bonanza, with all its pros and cons, prompts the question:

Is this price war (or rush to bribe the customer, call it what you prefer) sustainable? Even with on-line efficiency savings? How about margins?

3) Is the rewards bonanza really producing its intended effects for supermarkets anyway?

As I started shopping at Sainsbury in Fulham and they realised I had moved in the area, here is a bonanza of 4 free delivery and £10 off for a shop of at least £60, to use over a period of two months.

Great but:

a) it creates some form of expectation, which is going to be frustrated sooner or later, and

b) I can always play opportunistic: I can use this bonus to stock on certain commodities only (paper rolls, chicken to freeze etc.) and clock as many points as possible. Once the extra bonus is over, I can bank my points on re-occurring offers like those on Pampers Active or on pasta De Cecco and Berio Olive Oil (every 2-3 months). Recently I have build a 3-month stock of pasta, plus 3 weeks of nappies and olive oil with £30 approx.

And when even that is over, will I come back? Yes and No.

  • Yes, I did quite like their brand experience overall so I have not written them off altogether and, after all, the opportunistic option is always there, thanks to all the double-point vouchers you get in store.
  • No, I need my money to go further and I have found a number of viable alternatives/complements. Will keep you posted about that.

In summary:

The Consumers enjoys an incentive bonanza but maybe they do not make the most of it because they are shopping “passive-aggressive” (so it’s win AND lose).

On the other hand, Sainsbury’s, and for that matter any other supermarket, try and incentivise/build loyalty (legitimate) but they do somehow in an indiscriminate fashion. Possibly in a way that is not even sustainable (again, wind AND lose at the same time).

More questions rising there:

Does the “incentive machine” really work? Is it really achieving more repeat and predictable sales? Or does it rather encourage “scientific” opportunism from the Consumers that may leave the Supermarket worse off?

And even that is in the Consumers best interest? Could it not be that Supermarkets, may have to compromise on certain standards (health, freshness etc.) in order to contain the costs of the very same bonanza they have unleashed in the first place?

Last but not least, is the Supermarkets game really that transparent? Or more simply, do they (and their employees) make it work everyday and everywhere?

What is then the set of behaviours that may minimise “win-lose” and maximise “win-win” scenarios?

Let’s analyse Sainsbury’s Brand Strategy in response to the Problem. See you in May.

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