After decades of growth, Britain’s top four supermarkets – Tesco, Sainsbury’s, Morrisons and Asda – have struggled in recent years to contain the threat of discount retailers Aldi and Lidl. Capitalising on consumers’ penny-pinching associated with the recession, the German discounters have gained market share at a steady rate (see box, p54 ), while the major players continue to engage in a price war. Competition is such that there have been 18 successive falls in grocery inflation; shoppers are now paying less for a representative basket of groceries than they did in 2014. 

While the market share of each of the UK’s ‘big four’ supermarkets fluctuates, the latest annual Brand Finance Retail 50 report revealed Asda to be the only one to have avoided a drop in brand value in the past year. 

Liz Lamb, senior director of insight and pricing at Asda, believes that – while there will be “a hundred and one reasons” behind this trend – one of the key drivers is the supermarket’s “single-minded focus on the customer”. This, she explains, is enabled by insight. 

“It’s just a very aligned and focused organisation, and everything always comes back to what we’re delivering for the customer,” Lamb says. “If we are ever off the ball from a pricing, service-delivery or quality point of view, we’re alerting people to that straight away, and action’s taken off the back of it.” 

Insight planning

“It’s not the type of place where you deliver insight, and people sit around and nod and smile, and you go away and never hear about what’s happened to it again,” she adds. “You instantly know it’s driving action around the business.” 

Lamb credits this ability to turn insight into action to the structure of her department at Asda. There are two data teams – one looking at customer relationship management (CRM) activity and another at customer analytics – plus pricing, market research, and customer and market data teams. However, she believes the insight planning team is key to disseminating the insight generated by the department. Lamb is well-versed in its work; before moving into her current role earlier this year, she led that team. “It’s rare in the industry to have a team that’s dedicated to pulling out the insight and landing it in a commercially compelling way,” she says. 

Focused role

Asda’s planning function sits as an umbrella across the other teams. The planners take the information and “try to make sense of it – sorting the wheat from the chaff”, then place it at strategic points within the business. 

“A lot of the success, in terms of being heard and being acted upon, is dependent on that piece of work,” says Lamb. 

“You often get insight managers tasked with doing so many things: agency management; data analysis; the presentation. But this team of people can just focus on that stakeholder relationship, and landing those compelling insights.” 

This focused role, says Lamb, means that the planning team are not only responding to the needs of the business, but are actively pointing out knowledge gaps that need to be filled. 

“They have got a real ear to the ground for what’s happening from a business point of view, so they can be reactive, but also proactive in saying: ‘This is what you need to be focused on; you need to be hearing this; you need to be challenging teams on this.’ I think that’s quite an interesting place to be.” 

Three years ago, when Lamb joined Asda, the insight team had fewer than 10 members, all of whom were generalists. Asda decided to build a team of “real expertise” – to build data and research capabilities, then bring in planners with business, as well as insight, experience. That way, Lamb says, they could put a commercial edge on any information delivered. 

Having that commercial overview is useful at any time, but perhaps even more so during times of change within a business. In recent months, there have been some significant changes to the senior team at Asda: marketing director Chris McDonough left the business in January and was replaced by Claire Harrison-Church; and chief customer officer, Steve Smith, rejoined Walmart after a two-year secondment. He has been replaced by former chief merchandising officer Barry Williams. 

Lamb says Williams is “absolutely obsessed with the customer” and has been pivotal in driving that focus since he joined. However, even before then, the team had been growing steadily, as a result of hard work and its success with stakeholders. 

“We are being heard and are being taken very seriously,” Lamb says. “We’ve gone from being a support team to being a real strategic asset for the organisation. We’re at all of the key meetings. More people are getting to find out about insight, and they use it – and see it – as the asset that it really is.” 

Understanding loyalty

A piece of work that Lamb feels contributed to the wider appreciation of the strategic value of insight within Asda is the ‘Mums Immersion’ project (see case study). Still going today, it was the first time the whole business had been galvanised around an insight scheme, adds Lamb. It led to other workstreams and has driven a lot of action for the supermarket. 

Looking ahead, Asda’s focus will be on re-engaging with existing customers, and drawing in new ones – although Lamb says she would be surprised if this wasn’t every retailer’s focus. It is especially important, she explains, at a time when shoppers’ relationship with supermarkets is changing. 

“Loyalty isn’t what it was some years ago. We’ve got such promiscuous shoppers now and – with multi-site and multi-channel shopping – the big four are very much part of this squeezed middle. Everybody is fighting for a share of the customer’s wallet,” says Lamb. 

“All retailers have some customers that are fundamentally more loyal than others. But then you have these floating, secondary – tertiary – shoppers, who will shop around a bit more. 

“Earning loyalty in this competitive climate is harder than ever. It requires true understanding of your customers and their needs – and, crucially, delivering against them.”

As part of its quest for understanding, Asda tracks customer satisfaction via instore and online programmes, and talks to 40,000 shoppers a month via its customer-perception tracker, and 20,000 via its ‘pulse of the nation’ customer panel. Lamb estimates that her team talks to around 100,000 people every month across all research programmes. This includes 12 families that the company has ‘adopted’ in the past four months, in order to understand them “as shoppers and as people outside the shopping environment”. 

Asda is trialling other new approaches, too. Video cameras have been placed at strategic points in a number of its stores to monitor customer traffic and flow, as well as how people interact with items on shelves. This is intended to offer insight about whether they are being distracted by things such as advertising or palettes, and how their journey is being enabled – or not – throughout the store. 

Lamb says the company will be looking to use behavioural economics to get under the skin of shopper decision-making. This means using new tools and techniques to explore how people are shopping, in order to optimise their experience and spend. 

At a fundamental level, Lamb’s team – and Asda as a whole – is using the values of its customers to inform its business. 

Where other businesses might outsource their customer-closeness work, data analysis, and management of its customer panels, Asda does this in-house. 

“We talk about EDLP for our customers – everyday low prices – but in order to fuel that, we need to be an EDLC business: everyday low cost,” she says. 

“As a team, we’re doing some phenomenal bits and pieces that I think – if we were to commission an external source – would be costing in the region of £1m. We’re doing it at next-to-nothing because we’ve got smart people around the table working on it. That’s something that we’re really proud of as a team. 

“Even though we function with that [EDLC focus], we’re more creative because of it.”