Supermarket engagement high, but can improve
Consumers are now more engaged with their supermarket of choice than they are with their bank or their mobile phone service provider, according to a study of British consumer attitudes toward supermarket marketing by business analytics firm SAS and the Cranfield School of Management.
The majority of participants in the study (91%) said they had some engagement with their supermarket in a single month (be it via broadcast, personal experience, word of mouth, etc.) compared to only 88% for their main bank, and 82% for their mobile phone service providers.
But, the study warned, supermarkets still need to update their campaigns to cater for more online, mobile and social audiences. Among the study's key findings:
- Product availability, especially for promotional items, is a major frustration for customers and the rise of smartphones and social media is making it easier for them to complain publically, but it also gives supermarkets more visibility into what is said.
- Around 20% of consumers shared or received word of mouth experiences, and the experience overall was negative.
- Supermarkets need to update their communication strategies away from TV and newspaper advertising pushing low price offers and instead focus on online and direct engagement to tailor communications to customers.
- Direct mail is highly successful because of the customer insight generated by analytics to create relevant offers. But supermarkets are not applying the same principals to email, and success rates are low compared with other sectors. Consumers reached via email reported only a slightly positive effect (virtually in line with an untargeted broadcast) whereas those contacted via direct mail reported a clear positive effect.
- 20% of supermarket's online interactions take place on their website - mostly with customers doing their shopping. Those that do shop online say the experience is positive.
"Supermarkets have worked very hard to improve service levels, and radio and in-store communications are helping them forge excellent relationships with the customer," explained Charles Randall, solutions marketing manager for SAS UK.
In fact, the supermarkets' highly personalised approach to direct mail - driven by big data analytics - has set the standard which other retailers are trying desperately to match. The downside of that is that customers now expect very high levels of service in the grocery sector, and they are quick to complain if they don't get it.
To address this, supermarkets must now become much better at incorporating data from emerging channels (such as online, mobile and social media) into their loyalty programmes to create a more personalised and relevant experience across all channels. There is also a clear opportunity for supermarkets to enhance their demand forecasting to maintain stock levels, even during promotions, to minimise customer dissatisfaction.
"Consumers already relate strongly to their supermarket on a personal level. But add the intelligence delivered by an integrated analytics platform, and supermarkets would have the opportunity to build on their success, both strengthening and reinforcing already thriving customer relationships," concluded Randall.
Sources: SAS; Cranfield School Of Management / The Marketing Factbook.
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