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Sainsbury’s: Dominating the Retail Industry in the UK

by | Nov 29, 2016 | Customer Engagement, eCommerce, Omni-Channel | 0 comments

When the economic downturn first hit the UK in 2012, Sainsbury’s managed to emerge as the most successful British food retailer. The significance of this can be gauged by the fact that many retail industry experts thought that the chain, with its mid-market position, would suffer the most. But Sainsbury’s marketing team and their colleagues squarely proved them wrong.

Somehow Sainsbury’s recent results replicate the 2012 scenario. Despite a 0.4% drop in sales last year, Sainsbury’s online and in-store sales rose 0.1% in the nine weeks to March 12th. Total sales were lifted by a 14% increase in online grocery sales, a 10% rise in sales of clothing, and an 11% lift in sales of entertainment products, such as CDs and DVDs, buoyed by the release of Adele’s latest album and the Bond film Spectre. Again, the retailer proved many people wrong. Obviously, success, especially after a lot of difficulties, has many learning curves. And generally, success is an accumulation of many tiny and big factors. Sainsbury’s success is no exception. From clever acquisition to enticing marketing, there are many things that the retail giant has done right to survive the rough economic weather. We will analyze all those factors one by one.

A) Brand Match Promotion

With each passing day, the UK retail market is becoming more and more cluttered and ultra-competitive. And price-comparison schemes have become a popular competitive tool. Asda has used that by plugging its Price Guarantee and Waitrose by extending its Brand Price Match. The biggest challenge for Sainsubury’s marketing team amidst such moves by competitors was to convince shoppers who thought that Sainsbury’s was too expensive for them, that the company could actually provide them with value-for-money.

It was important to take into consideration the fact that consumer confidence was at its lowest ebb for 30 years and that disloyal shopper are always willing to weigh up which retailer offers the best value. Sainsubury’s overcame that through its Brand Match promotion, which compares with rivals Tesco and Asda the price at which it sells branded products.

B) Early Mobile Use In Stores

Now it doesn’t even sound interesting to hear that retailers are using mobile phones to improve the overall customer experience or operational efficiency. That has become a common thing. But Sainsubury’s was the first British grocer to use it in an innovative way. The company experimented Mobile Scan & Go in its stores, allowing customers to shop and scan items with their own smart-phones. Until that moment, retailers were doing it in stores with handsets. Allowing customers to use their own phones to scan items was pioneering and Sainsbury’s did that right.

C) Crave-Worthy Content Marketing

Considering that content acts as a communication bridge between the company and the customers, it can sometimes be considered as valuable as the product itself. Sainsubury’s marketing team understands this perfectly and acts accordingly.

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The company began a signature magazine- the biggest and fully paid for- to elevate foodie content to a multimedia art form. It delivers recipe features that are tested by some of the U.K.’s best home economists and aim to serve all types of readers’ culinary needs. The magazine is great but Sainsbury’s marketing pros didn’t stop there.

To give a real multimedia touch to its content, they have created a successful portfolio of social media channels, sell-out live cooking demonstrations, weekly newsletters, the magazine’s Food & Drink Awards, a series of editorial one-shots. The magazine has assured Sainsbury’s a multi-platform audience engagement, which is something content marketers break their heads trying to achieve. Here are just a few of the results reported by Sainsbury’s marketing team:

  • 50,000 magazine readers receive the Sainsbury’s newsletter every week, which has achieved a 35% open rate and 31% click-through rate — well above the industry average.
  • The magazine has over 24,0000 followers on Twitter and 162,000 on Pinterest.
  • 81% of readers have cooked a recipe after reading the magazine, and eight out of 10 have bought a product from Sainsbury’s after reading about it in the magazine, according to a 2015 survey.

D) Customer Service for Even the Smallest

Sainsbury’s is an example of how good customer service can pay dividends. Sainsbury’s customer service executive responded to a three-years old’s letter about renaming their Tiger Bread to Giraffe Bread. The response went viral, which resulted in the supermarket chain changing the name of its product to ‘Giraffe Bread’. The new Giraffe loaves went on sale eight months after toddler Lily Robinson sent a letter to the supermarket suggesting the splotches on the bread’s crust resemble a giraffe’s pelt more than that of a tiger. The customer manager Chris King, responded to this sweet letter as follows:

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As you can see it, the customer service manager didn’t respond by just accepting the toddler’s request, but he also included a £3 gift card in it to thank the little girl for her help. No wonder the story was shared on Facebook 14,000 times and that the Customer Manager received tons of compliments. That was indeed a great example of amazing customer service.

E) Shopping for a Cause

People nowadays have the urge to give back to their communities and when they see a brand doing that, they have an extra incentive to buy from that brand. Customers take pride in being associated with brands that do what they can to make the world a better place, and Sainsbury’s marketing team capitalizes on that.

The store donates food that is still healthy, nutritious and within its use-by dates to a number of places. Those places include food banks like Corsham Churches. Sainsbury’s Chippenham also donates flowers to the Seymour House care home situated in Monkton Park, Chippenham.

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Chippenham’s store manager Val Atwill once said, “There are hundreds of hungry mouths to feed in your local community and by donating food to charities and organizations we are saving thousands of tonnes of food needlessly going to landfill.” Clearly, the efforts to avoid the wastage of food by giving to those in need is a beautiful gesture and resonates with people.

F) Try The Buy Sainsbury’s Range

 It has been observed that in the segments where big brands have a sound presence, customers generally tend to overlook the retailer’s in-house brand. There’s some common assumption that retailer’s products may not taste as good as the big brand’s. And that can significantly affect the retailer’s sales numbers.

Sainsbury’s marketing team found a solution to tackle this problem by launching a campaign called “Try The Buy Sainsbury’s Range”. It installed large PoS in the stores highlighting the price of a brand along with the price of its own equivalent product next to it. Examples include Sainsbury’s chocolate ice cream for £2 versus Ben And Jerry’s ice cream for £ 2.50. Obviously, the goal here is to make shoppers buy Sainsbury’s own version of their favorite brands. The campaign ran in 600 stores and it saw a great success as its own product range grew at twice the rate of the branded goods. The retailer also said that 97% of its customers bought Sainsubury’s products, which was a huge accomplishment.

Indeed, the great lesson from retailers like Sainsbury’s and Topshop is that even though the quality of the products and services is going to be the most critical element in any success story, the other things like customer service, tech adaptability, innovative use of content and marketing policies hold vital importance. They cannot take a back seat. Simply because the moment your competitor brings a quality product or service, you may lose your customers. But if you are adding a value proposition through your offers, content and customer service, customers will at least think twice before leaving you!

Note: Sainsbury’s is not the only major retailer whose success story we have chronicled. You can read here what made Williams-Sonoma a smashing success. Here is the reason why Home Depot is dominating the home décor and home improvement industry.  Don’t forget to read about Michael Kors’ successful marketing strategy either.    

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