BrainTrust Query: Asda Takes the ‘Pulse of the Nation’
Commentary by Joel Warady, Principal,
Joel Warady Group
In an interesting experiment,
Asda, which is what Wal-Mart is called in the U.K., is turning over some
of the buying decisions to its customers. Asda will start to e-mail to
a group of 18,000 customers, which it has termed its "Pulse of the
Nation" group.
The e-mails will contain
images and descriptions of new products sourced from the Far East, and
the Pulse group will have the option of providing a positive or negative
response as to whether or not they think it is a product that should be
carried in the stores.
According to a microsite
for the Pulse of the Nation panel,
those responding to the e-mails each month will be entered into a drawing
to win free prizes in addition to "having the opportunity to make your voice heard." Currently,
the two top winners each month receive a gift worth £250. The program also
on a monthly basis hands out four vouchers of £40, eight vouchers of £20,
and 16 vouchers of £10. Although sponsored by Asda, Pulse of the Nation
is owned and operated by the market research firm TNS.
Asda sees it as a way
to engage more effectively with its customers through the use of the digital
channel.
Not only does this take
more power away from the manufacturers and brand owners, it also takes
the power away from the buyer, and turns it over to the customer. This
can make for a very interesting dynamic, if it works, and it will be interesting
to see how the product mix might change that exists on the store shelves.
In essence, it becomes
a "Focus Group on Steroids," and puts the power of brand decisions
into the hands of the end-user. Think about how this might work for your
business or service. Can your business develop a Pulse group, and can you
use it to help plan your product launches? Letting customers choose
your next products helps build-in initial sales as soon as the products
are launched, because the engaged customer now has some skin in the game.
All the more reason why
it is so important to continue to build the long-term relationships with
your customers, and work towards making them an integral part of your business
decisions. As we always say, when all is said and done, the Customer Owns
Your Brand, not you!
Discussion Questions: What do you think
of Asda’s move to get customers involved in buying decisions? What
opportunities do you see in online consumer panels for this and other
functions? What are the overall challenges of getting consumers more involved
in business decision-making?
I find the “Focus Group on Steroids” comment very telling, both in terms of the program’s benefits and risks. On the plus side, this program will be an interesting way to engage shoppers and to anticipate demand trends earlier. On the downside, it will also suffer from some of the drawbacks of focus groups–most notably, people often say one thing and do another. The single best indicator of what people want to buy is, unsurprisingly, what people do buy. Stores with loyalty cards capture the data today, but the challenges of inadequate tools, insufficient staff, and competing priorities mean that for many retailers, this rich resource is underutilized.
So, Asda needs to be sure it doesn’t overreach with this program. If they are looking for a better measure of demand for existing products, I think they will be disappointed. But as long as they see this as a weather vane to help identify what the next product trend will be, I see promise.
I’m reminded of the saying that goes like this, “Don’t ask my opinion if you won’t follow it.” ASDA has a fertile idea yet this question arises: Will ASDA change their purchasing schemes to the tune of the majority of 18,000 customers? Or is this just a shrewd PR program? Whatever, this is worth watching.
I think this is a trend past due. The ease of communication with people via email and now through social media channels means retailers have no excuse for getting in front of their customers and finding ways to engage them in the business. Frankly, I’m still waiting for the day when customers are invited to be a focus group/panel for their local store–like a store advisory board.
If I were a store manager, this is one of the first things I would do: I would invite my 10 best customers to join an advisory board for my store, where they would meet once a quarter to talk about what they like about my store and what needs improvement, and use it as an opportunity to make them feel special both by the special engagement and perhaps by putting new products in front of them. The objective: get an inside ear on my best customers, while also getting them engaged in my store.
It’s not necessarily representative, and that’s the thing you have to be careful of with any of these kinds of panels–mistaking the input you get as being representative of all customers. Asda’s panel is pretty big, but they’re still going to have to do analysis across different customer segments within the panel to make sure that there aren’t big differences hidden in the averages.
I concur with Mr. Sprecher’s comment regarding focus group saying one thing and doing another. We have seen that occur many times in our work as well. If this process is used as a screen to narrow the possible selection down it can have real value. However, the best way to determine if a product will sell is to put it in stores and monitor the results.
Excellent! Why not let the consumer have an opinion in what you buy? Isn’t this basically what threadless.com does, by letting consumers design and then vote on their favorite designs?
This is simply a good idea. Successful retailers have always used customer input. Look at Wal-Mart. Sam’s merchandise strategy was to carry the number 1 and 2 item in the category. This clearly has the consumer voting on what items they want to buy.
I recommended to a chain that if everything was equal on two items, put one in a group of stores and the other in another group. This way the customer could decide. They declined my recommendation and selected the item with the greatest slotting fees. They then planned to discontinue the item in some months and replace it with the other one, or a new item. This way they collected more slotting fees. No customer focus here.
This is a brilliant marketing move in my opinion. If they handle it properly it should be a win/win for everyone but the buyers. No matter what happens they should get great marks with the public for caring about their wants and needs.
If Asda plans to make buying decisions this way, I’m afraid they are creating great risk. Just because there are 18,000 people in the panel does not insure they are representative of the store’s consumers. When Asda asks the panel what they prefer the respondents won’t have the context of how they shop in the store, the competitive set, the price implications, nor the issues related to distribution and merchandising.
The greater use of this approach is to identify what “not to buy.” When a large majority of consumers reject a product, you can believe them. However, Asda should probe to understand “why.” Is it a value proposition or a flat out rejection of the product? This understanding can lead to better planning as to which new products to consider in the future.
The panel of 18,000 will feel good about their contribution to Asda and will probably be more loyal customers. However, if the product selection process fails to populate the shelves with desirable products, that is products the consumers will buy, the loyalty will not stop shoppers from heading to other stores to fill their baskets. In the meantime, those other customers who were not part of the Asda panel will also be out and about for their shopping needs.
Love the concept! Power to the Shopper! But, a caveat is the sweepstakes overlay. I worry that it inspires response that is not reflective of intent to buy the product, but just a quick glance and a vote to meet the quota.
One reads so much recently about the wisdom of crowds. It’s an interesting case study in seeing how wise–and/or consistent–crowds really are.
Who are these 18,000 customers? A randomly selected group? Asda’s most profitable customers? Their opinion leaders? Representatives from each segment? Without knowing that information, the results will be interesting but they are the opinions of 18,000 people who may or may not be important customers and may or may not be planning to purchase the items.
Wording of the question is important: “Would you be interested in buying the item?” is different from “Would you be interested in buying the product at this price?” is different from “Would you try the product if given a coupon?” Success depends upon the information gathered and how it is used.
From a marketing perspective, this is a great idea. The customers involved in the panel will feel a greater sense of attachment and loyalty to ASDA. The downside is the potential limited usefulness of the information collected.
As mentioned previously, the panel members’ suggestions might not track their ultimate purchases. In addition, buyers, rather than customers, are better informed and more skilled at managing assortments. The panel members may suggest stocking a lot of niche products dramatically increasing SKUs and inventory. The panel will not have information that the buyer has concerning new products. So what happens when the panel members see that their suggestions are not being implemented?
Engagement leads to connection. Connection leads to loyalty. The more personal the engagement the stronger the loyalty will be. The research part of this is only a means to make the shopper part of the ASDA family.
That doesn’t mean the research can’t provide valuable information and direction. It will, if everyone understands is limitations.
If ASDA hasn’t already, they should make this site very interactive. As they choose items to add, tell all the participants what they chose and why. If they find those items are bombs and they discontinue them, tell all participants why and suggest other items that may meet their needs better.
Great PR initiative. Lousy way to merchandise a store.
Once upon a time we had merchants who were close to their customers and had their hand on the pulse. Now we seem to have buyers that we need to work around because they’re not being effective?
I agree that there’s a big disconnect between what people say they’ll do and what they actually do. Far better, in my judgement, to task merchants and buyers to aggressively explore new markets and new vendors, and test, test, test, in a controlled and measured way.
Social media is an important emerging tool, and soliciting input on product ideas is one way of taking advantage of that tool. But this approach carries great financial risk if it becomes anything more than one of many sources of input that merchants and buyers use to make sound merchandising decisions.
When the internet moved to Web 2.0, the fundamental change was that communication on the internet ceased to be one-way in nature. It was no longer a broadcast. Suddenly, the audience could talk back. Readers became authors, consumers became pro-sumers and the audience became part of the show.
Asda (Wal-Mart) is merely engaging in Retail 2.0. Why should a buyer, who may or may not be reflective of the target consumer group, be making all the product decisions for that segment? Infinitely better buying decisions will be made through this kind of “crowd-sourcing” of ideas and opinions.
I think all companies everywhere should consider this formal notice that the game has changed forever.
Right, so purchasing decisions are going to be based on customer opinions (and I endorse questions raised about who these particular customers are and how they are chosen) based on emails with images and product descriptions? Very informed and sensible, that is. What if they get sent, and like the look and sound of, images and descriptions of Green Cheese imported from The Moon? I hope Asda is going to give prizes to the best copywriters. What a brilliant idea.
Customers are already involved, they already shop alone online and make decisions based on reviews from other customers (trip-advisor), eventually people will be able to shop across store types to get the best price without visiting an actual store.
Groceries are already delivered, You are able to order a whole animal cut up and packaged ready for the freezer from your local butcher. All these options are there and whether stores tie into them or not will determine how many big brand retailers thrive.