By Fiona Briggs
Plugged in convenience retailers in the U.K. are talking to their customers face-to-face, and increasingly online, in an effort to drive loyalty and win more sales. Previously, shoppers have voted with their feet — now they are having a say as well and larger retailers are getting in on the act.
Asda, a part of the Walmart family and the U.K.’s second-largest supermarket chain, has launched a series of initiatives designed to engage its customers and maintain their loyalty.
Billed as a new era of “democratic consumerism,” the retailer is lifting the lid on its business model and empowering customers to make decisions that influence Asda’s product mix by focusing on three key pillars:
- Aisle Spy: A series of blogs from Asda buyers who take consumers behind the scenes of Asda’s operations.
- Bright Ideas: A program that rewards cash to customers who share the best ideas to help Asda save money.
It’s a savvy move — Asda promotes to shoppers with phrases such as “Your Asda” and “Chosen by you” — but talking so intimately with customers is far from new.
Convenience stores have been talking to their customers for years and in fact, are better poised to do so. Many convenience retailers are now ramping up the dialogue and involving new technologies, such as websites and loyalty cards, to extend and strengthen their reach.
Because their stores are visited more often by customers and because owners are very involved in their businesses, convenience store retailers have a dynamic combination of personal service and a deep understanding of their customers. “Now there is a drive to combine that personal insight with technology and new methods of communication,” said Stephanie Rice, principle at marketing consultancy Rice Retail Marketing.
Local customer forums and panels are one example. These gatherings are typically held biannually with 10 to 12 customers who receive a small amount of money for participating. “They will usually engage for one and a half hours talking about experiences in the context of the store in the community,” said Rice, explaining that this provides a richer picture of the role of the store rather than focusing on one-off occurrences, such as running out of baked beans.
Convenience retailer James Graven has been hosting customer panels for at least six years at his Budgens store. Operations Director Jonathan James chairs the panels, which are held once a quarter or every two months.
According to Graven, the panels comprise around half a dozen people, including one elderly customer, one young mom and a shopper who does not visit the Budgens stores. In thanks for their input, panelists become custodians of an annual £1,000 community grant, donated by the retailer, and can choose how to allocate the money among local groups.
“I use the panel for all sorts of things — competitions, staff training, local suppliers, community involvement — but I really like the honest feedback,” said Graven. “Nine times out of 10, people won’t come up and criticize my shop but they don’t mind telling somebody who they know will tell me.”
Warner’s Budgens, a chain of five neighborhood convenience stores in the Cotswolds, has taken customer dialogue to the next level with the creation of a Taste Club, an online membership program comprising 2,000 shoppers who sign up for monthly special offers.
According to the retailer, Taste Club is designed to reward loyal customers and invites comments on products and any changes that they would like to see.
Today, Warner’s Budgens is testing a loyalty card scheme to build on the success of Taste Club.
While communication between stores and shoppers is a good thing, it does have to be managed.
According to Rice, convenience retailers must “do the right thing” by their customer comments. “They need to show customers they are genuinely listening,” she said. “Everyone is informally listening to their customers but what is ultimately at the heart of this is how the convenience store is going to respond.”
Graven at Budgens agrees. “You can’t just take — you have to give back and demonstrate that an idea about a change on a deli counter, for example, has been done,” he said.
Coping with criticism is critical, too. “You do hear the negatives,” said Graven. “Being in retail, you are not going to please all of the people all of the time. But I would rather hear it from people [directly] than through the back door, so it is constructive and you can be seen to be doing something about it.”
In one recent case, Graven received a handwritten letter from a retired army officer complaining about the lack of small shopping carts at a store. Graven responded with an explanation that they were on order and enclosed a £10 gift voucher. “It felt I had done some good and it was nice that he could approach me,” he said.
Andrew Thornton, another Budgens convenience retailer, welcomes criticism too. “I’ve done a lot of discussion groups and my e-mail address is plastered all around the store. I get lots of e-mails — good and bad — and I encourage people to complain.”
Mike Blowing, a Spar retailer in Buckinghamshire, has certainly taken it on the chin in listening to his shoppers — he invited them into his home. It was hard-hitting stuff, he said. But there were many positives, too. As a result of the meeting, the store, which bakes its own bread, now telephones shoppers when the bread is ready. Previously, the service wasn’t advertised — now it is.
“He’s taken the good and bad criticisms,” said a Spar spokesperson. “Retailers don’t necessarily see what a customer sees…What you are selling in the store may not be what your customers want you to sell. Listening to your customers and making changes in-store leads to customer loyalty and a gain in increased sales.”
At his stores in North London, Thornton is closely tuned into shopper needs. “Our strategy has evolved by understanding the people in the area and what their needs are,” he said.
For Thornton’s Budgens this includes a focus on specialty and local foods with an emphasis on free range and organic products. It follows through to environmental initiatives such as “saying no” to plastic bags and reinvesting the money in a trust fund for local charities, energy-saving initiatives and community programs involving local schools and events.
Back at Budgens, Graven reports his customer panels have even been involved in store retrofits. At one store, customer demand prompted the installation of a butcher’s counter and wet fish counter. The panel is also helping communicate the construction efforts to customers during the one-month retrofit, to minimize disruption.
Similarly, Graven has created a residents’ panel to oversee the build of a new forecourt store. It’s headed up by early opponents to the site. “I brought them in at an early stage,” he said. “Where they were once the enemy, they have nicely come around.”
As the efforts to learn more about — and communicate — with customers evolve, it will be interesting to watch how up close and personal Asda can actually get to its millions of shoppers. Convenience store operators, such as Graven, are already on intimate terms with their customers, and will continue to strengthen their allegiances in the meantime.
Fiona Briggs is a retail business journalist. She is also consulting editorial director at the U.K. PR company Cirkle. She can be reached at fionalbriggs@ gmail.com.