We look this week at how Morrisons and Sainsbury’s are both investing in the customer experience. The supermarkets both see room to improve their position within the grocery market by offering shoppers a better shopping trip. How they approach that is influenced by their differentiated strategies, both illustrated in this week’s updates.
Morrisons: focus on the customer, while developing wholesale channels
Morrisons said it had “continued to invest in the customer shopping trip, and again improved our competitiveness” in the first quarter of its financial year. The retailer reported total sales, excluding fuel, up by 3.8% in a trading statement for the 13 weeks to May 6, while like-for-like sales, stripping out the effect of store openings and closures, were 3.6% ahead. Within the LFL figures were a 1.8% contribution from retail and a 1.8% contribution from its wholesale channel: Morrisons supplies Amazon as a wholesaler, recently adding McColls convenience stores as a partner. Morrisons projects that the wholesale channel will add up to annualised sales of £700m in its current financial year; it is eventually targetting £1bn.
Chief executive David Potts said: “We are pleased to have made a strong start to the year, again becoming more competitive for customers while delivering growth on growth. We expect to continue to improve in the year ahead.”
Sainsbury’s: understanding customers through data
Sainsbury’s earlier this year bought the Nectar programme in which it was previously a member. By doing so it has gained greater insights into its customers data. Now it is trialling a new approach to customer loyalty through a scheme now live on the Isle of Wight.
Technology company Eagle Eye this week said it had signed a contract enabling the supermarket to use its SaaS digital wallet technology and platform until August 2021. That technology is currently providing the foundation for the Isle of Wight trial which may then be rolled out nationally if successful.
Customers use the Nectar app or website to choose the personalised offers they’d like to get in a move that looks likely to give shoppers more control over the offers they receive, and Sainsbury’s more insights into their behaviour.
It will be interesting to see how the pilot evolves through the trial. Waitrose launched a ’pick your own offers’ scheme in June 2015 but earlier this year is reported to have limited the scheme to personalised offers and vouchers sent out by the retailer rather than chosen by the customer.