The Grocer – 20 July 2019

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comment & opinion

What do we mean by ‘customer-centric’?

the saturday essay

W

hen Tim Steiner spoke
last week about ensur-
ing Ocado’s tie-up with
M&S was responsive to the needs
of their combined shoppers, he
joined a long list of businesses
loudly proclaiming to be ‘cus-
tomer-led’ or exploring a ‘cus-
tomer-centric strategy’.
No doubt about it, Ocado’s cus-
tomer base will change when it
swaps Waitrose for M&S, and
Steiner is right that the business
must adapt. However, when
retailers look to put customers at
their centre, who exactly are the
customers they are referring to,
and are these organisations oper-
ating with too narrow a mindset?
It’s a question worth exploring,
because too many retailers – and
brands – think only about their
existing shoppers. However, they
mu st lo ok w ide r, b e c au s e i n rea l-
ity there is no such thing as an

‘Ocado shopper’ or an ‘M&S shop-

per’. The most likely behaviour

of any individual is to not shop

with a specific retailer or brand,

so there’s simply no way they can

try and ‘own’ consumers.

People usually go to buy food

and drink four or five times a

week. But factor in every other

kind of shopping trip they’re

making and that number goes

up to nine. Add in online pur-

chases and we hit double digits.

As a grocer, you might be lucky to

account for £6 in £10 of a person’s

retail spend, and more than half

of people visiting a supermarket

will make another shopping trip

the same day.

Competition is already fierce

among the supermarkets. But the

truth is that the competitive set

goes far beyond the grocery sec-

tor, and that’s something that is

often forgotten or indeed ignored.

This is understandable. It’s

very easy for retailers to focus on

their own shoppers – after all,

that’s one thing they can see and

understand. But unless they look

at the bigger picture they’re going

to miss out.

Why? Because on average the

main grocers lose 16% of their

shopper base from one 12-week

period to the next. That means

they typically need to acquire 1.8

million new shoppers each quar-

ter just to stand still, let alone

grow. So if customer-centricity

means trying to improve loyalty

among an existing cohort, the

re s u lt won’t b e a r s ig n i fic a nt f r u it.

Focus on acquiring new shop-

pers, though, and success will be

more likely. It’s important to start

with the individual, because a

new shopper won’t necessar-

ily easily fit into an existing or

neat marketing mould. Consider

how people behave in the wider

retail universe – what do they do

on the same day as visiting your

store, for example, and is there

a way they can be encouraged

to do those things at your store?

Grocers are specialists in grocery,

but their shoppers are interested

in so much more and retailers

ne e d to show t he y re cog n i s e t h i s.

Taking a truly individ-

ual approach, of course, can

be costly and time-intensive.

Retailers should draw on their

branded and own-label partners

and consider how they can best

understand shoppers to take into

account not just what they buy

but their wider interests and val-

ues beyond grocery.

Otherwise, the risk is that

retailers follow a customer-cen-

tric approach that is laudable in

aspiration but doesn’t necessar-

ily get results.

Fraser McKevitt is head of retail

and consumer insight at Kantar

“The truth is that

the competitive set

goes far beyond

the grocery sector”

Fraser McKevitt

Food needs an online comparison service

third party

of food science, retired from

Manchester Metropolitan

University

the green paper points out, add-

ing more information does not

always empower consumers to

make better-informed choices.

Instead, information should

be presented in a format that

allows consumers to see at a

glance how products differ from

each other and align with their

personal preferences. In par-

ticular, the ability for consum-

ers to pre-select for provenance

• and therein for British quality-
  assured food – would be a mas-
  sive step forward for the UK.
  Such a system could offer a
  shopping list of ranked alterna-
  tives for products based on pref-
  erences (including price and

labelled information such as

nut r ie nt s , a l le rge n s , re l ig ion a nd

ethics, in addition to provenance)

consumers could use.

Instant online information and

easy choices are now expected,

especially among younger demo-

graphics. Online comparison and

switching services – as already

exist for utilities – are a use-

ful reference point for the food

industry in this regard.

Given the range of products

and selling options available,

this is of course a challenging

proposition. There are already a

number of price apps that pro-

vide price information and com-

parisons. In addition, several

barcode-based apps help con-

sumers choose from a limited

range of foods on the basis of

health preferences, such as free

from allergens, salt or FODMAP.

These services are valuable,

but none is a one-stop shop.

It needn’t be this way. We

now have the IT capacity to help

empower consumers to choose

foods through personalised pref-

erence systems. Food informa-

tion needs a co-ordinated and

independent approach.

Richard Moody is professor

I

n its 2018 green paper,
Modernising Consumer
Markets, the government
committed to ‘harness the power
of new technologies for the ben-
efit of consumers’ – a move rele-
vant to food information.
After all, the way consumers
buy food – and consume infor-
mation – is changing. Food infor-
mation systems need to adapt to
keep pace; the Food Information
Regulations, plus new aller-
gen labelling legislation, only
increase this need. However, as

Richard Moody