Whether you love or loathe supermarkets, there is no denying they are an enormous part of our everyday lives and the economy. Having spent a large proportion of my working life at an agency that helped drive the rampant growth of Tesco, Asda, Sainsbury’s and Morrisons (known as the ‘Big Four’), I happen to be very fond of supermarkets. However the ‘Big Four’ have recently stumbled into turbulent times. Despite holding more than 70% market share, they are facing fierce competition from smaller and more agile challenger brands (Aldi and Lidl) nipping at their heels and successfully stealing valuable market share.
Why are supermarkets losing market share?
The critical question for many supermarket executives is why is there a significant shift in market share? If you listen to industry pundits the answer is simple – price. Of course price is important but the whole picture is more complex. Brand loyalty and consumer behaviour is far more dynamic than single factors such as pricing and, in my opinion, the problem for supermarkets is due to a severe lack of brand positioning and the disconnect between brand proposition and communications strategies.
Anyone shopping at any supermarket understands that, while they all sell fast moving consumer goods, they all do it in very different ways. Some only sell online, some only sell offline, others do both. Some stock luxury brands, others stock copycat brands. Some have a consistent stock of everything, while others have limited stock that is always changing. These are all valuable attributes that can be packaged together to create compelling brand propositions that will resonate with consumers. Yet few supermarkets are willing to do this. Instead they choose ‘me too’ propositions and regurgitate the same generic market-wide messaging, choosing only to engage in a single battle – the price war, which has no long-term winners (from a long-term economic perspective suppliers and even consumers will lose out).
What can the big four do to create change?
While it is far from game over for the Big Four supermarkets, there is a real opportunity to regain customer loyalty and defend market share. I don’t believe the challenge lies in identifying and defining compelling brand propositions, the challenge is having the bravery to reconnect the brand and communications because the outcome is a message that is different to your competitors. It takes a brave soul to say something completely different, but in doing so you create ideas and perceptions that have the ability to take the battle away from pennies and pounds.
What can you take away?
In today’s crowded business environment we all face fierce competition. We should learn from the brand positioning errors of UK supermarkets and ensure we create unique brands that act and communicate based on individual strengths rather than mimicking each other’s behaviour, identity and messaging.
Whether you manage a B2C, B2B or public sector brand, here are 5 actionable brand principles that will help you build a brand that standouts out amongst competitors:
1. Find a real purpose that people can believe in and connect with.
2. Be exceptional at one thing – don’t try to be everything to everyone.
3. Identify your strengths and use them to fight a battle where you have the upper hand.
4. Listen to what your competitors are saying and say something different.
5. Always be brave.
Article originally written as part of Nuance & Fathom’s portfolio.