Asda’s bold consumer empowerment drive has the company convinced that it is on the right track. Some campaigners remain to be impressed
UK supermarket chain Asda’s new Democratic Consumerism project is a raft of customer-empowering initiatives. They are intended, in the words of chief executive Andy Bond, to “involve customers in every aspect of the business, to lift the lid on how we do things, and enable our customers to help make decisions that have an impact on what we sell and how we sell it”.
Wal-Mart-owned Asda is recruiting a panel of 18,000 shoppers who will have “a big influence on purchasing decisions”. The company will reward the customer who comes up with the best idea that saves the business money. It is also to open a “transparent” store in Wales during 2010, where shoppers will be able to see into areas of the store normally not in view.
But if the primary objective of an initiative is to “build trust” with consumers, then becoming embroiled in a dispute with a consumer organisation on an issue of trust probably isn’t a particularly good idea. Barely a month after the initiative’s launch, the retailer opted to use its Aisle Spy blog, a key element of the consumer empowerment programme, to break a publication embargo on Consumer Focus’s Green to the Core? report on supermarkets.
Asda was given the lowest rating of the UK’s major supermarket chains. But the company disagreed with the research methodology and, fearing adverse publicity from the report, decided to get its defence in first. Julian Walker-Palin, one of Asda’s regular Aisle Spy bloggers, published a detailed critique of the report on Friday November 6, when a news embargo had been set for the following Monday.
Dominic Birch, Asda’s head of corporate communications, says the Democratic Consumerism initiative is primarily aimed at building trust directly with Asda’s customers. It was how the press coverage would be interpreted by those customers that was the prime concern. “If a quango is going to put out a report that we think is going to seriously damage our reputation and misrepresent us, then we believe that in the modern world ‘prebuttal’ is the new rebuttal,” Birch says.
Living up to another theme of the initiative, “transparency”, Asda published a comment on the blog by Philip Cullum, acting head of Consumer Focus, criticising the retailer’s actions.
Both Asda and Consumer Focus appear to wish to move on from their contretemps and while Asda may still have some work to do in regaining the full trust of Consumer Focus, the organisation was at least prepared to give the Democratic Consumerism initiative a qualified welcome. “We are pleased to see that Asda has recognised the importance of consumer input into their decision-making,” says Consumer Focus’s sustainability expert, Lucy Yates, who was also the author of the Green to the Core? report. “But only time will tell if they actually use this to change the way they do things.”
Indeed, Yates warns against Asda hyperbolising. “Business must be careful not to over-egg the rhetoric without following through on their promises,” she says. “Otherwise consumers will start to see all this talk of ‘listening’ as nothing more than PR window dressing.”
The UK consumer organisation Which? suggests Asda may have some issues to address in terms of consumer satisfaction. “Asda didn’t perform particularly well in our recent surveys, so it will be interesting to see what happens to its customer satisfaction levels as a result of this new customer engagement,” says Which?’s Sarah Dennis. However, Dennis says “it’s good to see that Asda is offering consumers the chance to be involved in some of its decision-making”.
Paul Kelly, Asda’s corporate affairs director, accepts that consumer groups will want to see the company follow through on these undertakings. “People will quite rightly say we want to see proof not promise and I agree with that,” he says. “We’ve got to demonstrate that first of all customers are engaging with it and secondly that we’re listening and then acting.”
He adds that the firm is making this move against a “background of mistrust in business”, stemming from the credit crunch and the collapse of the banking system. “People are saying, ‘We’re not going to take what we see and are told at face value. We want to dig beneath it.’”
However, while Asda seems very enthusiastic about this inclusive approach, the question is whether its customers are really that interested in engaging. Edward Garner of business analysis and market research company TNS believes what Asda is doing is “innovative”, but wonders how far it will “reach into the shopping base”.
He says his company’s research bears out that the primary concern of Asda shoppers is price. And Asda has been relentless and successful in its price-positioning, so much so that the retailer has taken market share even from hard-discounting competitors during the recession.
However, he warns against stereotyping Asda customers. Even if take-up is relatively slow, he says, Asda has “to play a long game”. Garner adds: “These things have a slow burn. This is not something that is going to change people overnight.”
For Garner, the initiative is not just about issues of transparency and accountability to consumers. He believes that it is also simply about the retailer projecting its personality, particularly as its focus on price means that its large stores can appear “impersonal”. Democratic Consumerism also gives the retailer “a human face”.
One subject of particular focus on the Aisle Spy blog will be sustainability and ethical sourcing. Ethical or organic produce might not be perceived as prime Asda territory, in comparison with say Waitrose or Marks & Spencer. But Kelly points to “an increasing interest around sustainability [and] ethical sourcing, where people want to know so they can make informed decisions”. And he believes the Democratic Consumerism push ties in with those heightened sensibilities.
Garner also points out that Asda has always aimed to link its statements on sustainability with its overall price message. In other words, making the business more sustainable saves costs, improves efficiency and allows it to offer more competitive prices.
On a similar tack, Asda stresses that it wishes to make ethical product choices more affordable. Indeed, a further criticism the company had of the Consumer Focus report was that it failed to examine issues of price. Asda’s Dominic Birch says the report should have looked at whether companies are “making going green affordable”.
However, environmental campaigners are sceptical that the Democratic Consumerism initiative will accelerate Asda’s progress on sustainability and ethical sourcing.
Helen Rimmer, food campaigner for Friends of the Earth, suggests the retailer’s message on transparency is at odds with its opposition to the creation of a supermarket ombudsman. This was proposed by the Competition Commission earlier this year following its inquiry into the UK grocery market.
“This isn’t really about transparency,” Rimmer says. She argues that the Competition Commission was proposing transparency, with an independent ombudsman who would look at supply chain practices. “This is what [Asda] has been vociferously lobbying against. It’s transparency on its terms. If it really did want to change it would have supported the supermarket ombudsman.”
Rimmer says the Asda initiative is “a PR gimmick”, and not a genuine attempt to change a business model “based on getting more for less that is going to have an impact on the environment”.
The sustainable agriculture pressure group Sustain takes an even more sceptical view. Sustain’s Jeanette Longfield describes the Asda move as a “cop-out”, saying: “If Asda is serious about being a proper, sustainable supermarket, they don’t mess around with blogs. They get on and they do it.”
Clearly, Asda believes it is serious about these issues. In Kelly’s own words, Democratic Consumerism is about “giving customers what they want, giving them the feeling the store they’re walking into is a reflection of what they would like to see, and not what we think they would like to see”.
Longfield suggests the majority of Asda’s consumers “just want it cheap”, and Garner’s analysis to a degree bears that out. So while Asda may be anticipating a lot of discussion of sustainability and more ethically sourced goods, its customers and bloggers may have other ideas.
What the blog will allow the retailer to do is promote what it is doing on sustainability. And this can be challenged publicly. If this initiative is about anything it is about Asda’s preparedness to discuss such issues in a public forum.
Kelly stresses that the blog is “unredacted” and cites Philip Cullum’s comment on Asda’s criticism of the Consumer Focus report and breaking the embargo as evidence that it is prepared to post material it may not find comfortable.
So, campaigners can engage with Asda via the blog. But this has not happened so far and there does not seem to be a huge appetite to do so for now.
Fairtrade thumbs up
The Fairtrade Foundation is positive about Asda’s initiative. It says it “welcomes Asda’s move to listen to its customers”, and says it expects Asda “will hear shoppers asking for more Fairtrade products listed in more of Asda’s supermarkets.”
Demand for organic and fairly traded goods grew from people lobbying supermarkets to stock products, and through campaign groups mobilising their members to push retailers. And this is something that would have been immeasurably easier and more effective if all supermarkets had had blogs. Environmental campaigners can therefore seize upon this as an opportunity to take Asda to task publicly. In the process they can really test the retailer’s commitment to transparency and engagement.
As the spat with Consumer Focus has shown, the democratic consumerism concept comes into its own when the retailer is debating important issues with parties with differing perspectives. And if anything it is this that can set what Asda is trying to do apart from PR.
Asda: fast facts
- Owned by: Wal-Mart
- HQ: Leeds
- Chief executive: Andy Bond
- 170,000 employees
- 370 stores
- Average store size: 45,000 sq ft
- Turnover in 2008: £18.5bn
- Second largest supermarket chain in the UK, behind Tesco, with a 17.3% market share.