Aldi uses social media to engage customers in different markets. In Germany, Aldi has 1,614 Twitter followers, while in Australia they have 4,615 followers. In the US, Aldi is working to build a social media presence to have customer dialogue and manage their reputation. The challenges for retailers are that customers can use social media to instantly damage or enhance brands, and technology allows more transparency in how companies target consumers.

1. Creating Added Value
Post Crisis Trends
Clive Woodger, SCG London

2. Creating Added Value
Post Crisis Trends
• Customer Mindsets – staying relevant
• Shopping Modes – formats … multi channel
• Differentiation – brand development
• Social Media Challenge

3. Strategic Consulting Group
International Strategic branding and
design consultancy.
13 years … 60+ Russian managements
We work in the retail, financial, real estate
sectors by creating

4. Creating Added Value
Customer Mindsets
Staying relevant

5. Customer Mindsets
Staying relevant – Lifestyle changes
Changes in Society, needs and aspirations
• Marrying later …
• Rise of single households
• Time poor – cash richer
• Value
• ‘Values’
• Freshness … Health … Choice

6. Return of Consumer confidence?
International
• Increase
• Decrease
• No Change
Consumer confidence –
Russia = ‘average’

7. Return of Consumer confidence?
International

8. Return of Consumer confidence?
Russia

9. Universal Values?
Shared Norms for the New Reality
“we live in a world that is becoming increasingly
complex and interconnected but also
experiencing an erosion of common values and
principles”. DAVOS 2011
Opinion poll 2010 … global values for cooperation
40% chose honesty … integrity … transparency
24% chose others’ rights, dignity and views
20% chose the impact of actions on the wellbeing of others
17% chose the preservation of the environment

10. Food Trends – Customer
Attitudes
Value
Health
Connectivity
Home Dining
Fresh
Sustainability
Energy vs. Relaxation
Internationalism

11. Food Trends
Value
“Constrained consumers”
More for Less
pragmatic .. careful… planned shopping
Price led but value driven
Quality …
Choice …
Experience … environment / service / process
The best quality at the best price
A good ‘deal’ … every time you shop

12. Food Trends
Health … nutrition
food / pharmacy
realistic claims – growth of ‘proven’ products

13. Food Trends
Connectivity … social media marketing
campaigns

14. Food Trends ‘eating out at home’
Home Dining … indulgence at home /
new products for creative home cooking
Tesco launches City
Kitchen range
Premium ranges – gourmet and
restaurant dishes
Budget – cooking from scratch
‘Ingredient foods’
– less pre-made / packaged

15. Food Trends
Fresh
Demand for Freshness
Minimal processing, chilled, minimal packaging
Food safety
Organic products
Diet books
Increased frequency of shopping trips
Highlighting ‘sell by’ dates
Organic and Ethical label range opportunities

16. Food Trends
Fresh
Back to basics – Fruit & Vegetables
Less packaged / processed food
Smoothies / packaged fruit snacks

17. Food Trends
Sustainability … environmental / ethical /
social … People … Planet … Profit
• Consumers want to feel ‘good’ about what they buy - how was it
procured, grown, reared, caught, manufactured, transported, by
who, how?
• Emergence of the ‘principled consumer’
• Did it harm the environment, people, communities?
• Was it ‘Fair Trade’
• CSR industry - differentiated by values
• ‘Look behind the label’ …. M&S

18. Food Trends
Energy vs. Relaxation

19. Internationalisation
Regional / Locally sourced
Ethnic / Fusion cuisine
“Now all fresh meat at Morrisons is 100% British”

20. Creating Added Value
Shopping Modes - Formats
Multi Channel

21. Shopping Modes - Formats
• shopping centres
• hypermarket
• supermarket
• convenience stores
• discounters
• online
“MULTI CHANNEL”

22. Shopping Centres
Trends ….
Food Experiences & Services
Crisis exposed weak developer strategies
In UK 60% of centres in trouble, only super
regional will survive?
What lessons for Russia?

23. Shopping Centres
“the city centre at your doorstep”
Kaleidoscope Tushino, Moscow

24. Hypermarkets
Lifestyle pitstops /centres - ‘everything for your life’
More than functional warehouses – providing services
and non food as lifestyle pit stops and community
destinations
big was better?
• Choice
• Price
• Services
Retail theatre … events
/ workshops / parties

25. Supermarkets
“making shopping a pleasure”
• Balancing convenience, quality and experience
• Range – focused to local catchments …
demographic … ethnic
• More space for deli and fresh produce
• Food to go / Cafes
• Services – financial, mobile phones, …
Sales densities vs better environments

26. Supermarkets
“making shopping a pleasure”

27. Convenience Stores
“my place”
• Near to the customer … work or home
• Baskets not trolleys
• Coffee cafes - takeaways
Open … “Marks & Spencer struggle
7am to 11pm to keep up with demand for
wine by the cup concept”

28. Discounters
“quality repositioning”

29. Online
“total convenience … to your door”
According to sales data
collected through the UK’s
leading website
MyVoucherCodes.co.uk,
Tesco enjoys the majority
share of online grocery
shoppers, with 41% of
supermarket sales through
Tesco.com, compared to
27% via Asda.co.uk

30. Online
“total convenience … to your door …
to your store”

31. Founded, $50m $40m in annual
of seed capital sales, average Bankruptcy
raised order value $81
Deliveries began IPO valued at $600m $800m in
accumulated losses
1997 1999 2000 2001
2010 HIGHLIGHTS Owned by amazon.com
2010 HIGHLIGHTS Owned by amazon.com Only ships non‐persihable, household goods and office supplies Sales $10m
Only ships non‐persihable, household goods and office supplies Sales $10m
OCADO = New webvan.com … Amazon … What is the difference?
Founded, first First automated EBITDA positive IPO, valued at £1bn
distribution conveyor for first time
agreement with warehouse
Waitrose
Trades above IPO
50’000 orders 100’000 orders
Deliveries began price for first time
delivered in a week delivered in a week
2000 2001 2004 2006 2007 2010 2011
2010 HIGHLIGHTS
2010 HIGHLIGHTS
Gross sales 2010: £551m Average order value: £112 EBITDA: £16m Still loss‐making after 10 years Market cap: £1.13b
Gross sales 2010: £551m Average order value: £112 EBITDA: £16m Still loss‐making after 10 years Market cap: £1.13b

32. OCADO = New webvan.com ? What is the difference?
The difference is structural shifts in the society and higher
acceptance of online shopping
Web grocery sales will increase to 9.5 billion pounds ($15 billion) by 2015, from 4.8 billion pounds this year. More 18‐
Web grocery sales will increase to 9.5 billion pounds ($15 billion) by 2015, from 4.8 billion pounds this year. More 18‐
to‐34 year‐old shoppers are moving online and wider delivery coverage means sales have the potential to grow
to‐34 year‐old shoppers are moving online and wider delivery coverage means sales have the potential to grow
“significantly.” The Internet will account for 5.2 percent of total grocery spending in five years, up from 3.2 percent
“significantly.” The Internet will account for 5.2 percent of total grocery spending in five years, up from 3.2 percent
now. (IGD).
now. (IGD).
In 2010 total retail spending
was up 1%, online retail
spending up 15%.
CONVENIENCE + VALUE
will fuel the online food
sales.
Customers will shop through various platforms and formats –
supermarkets, convenience stores, farmer’s markets or online.
Tomorrow’s sector winners can’t ignore ‐ customers will demand the
best possible experience.

33. Multi Channel
City … Supermarket … Convenience … Hypermarket … Online
“How to grow your business
in a low / no growth industry”
… now towns!

34. Multi Channel
UK grocer challenge
Intense competition … near market saturation
Slow growth … rising taxes … higher inflation
Grow by stealing market share from rivals … enhancing
proposition … adding space (better to cannibalise sales than
lose to rivals!)
Race for space – but diminished site availability
Need for hypermarkets lessening – growth of convenience
stores and online
UK petrol price increase – more local shopping
Leverage of multi-channels – click & collect kiosks … direct
catalogues
Non food needs more space – extensions & mezzanines
More services and facilities … health, finance, travel

35. Brand Experience
CUSTOMER EXPERIENCE BRAND REPUTATION
Awareness Customer Journey Afterglow
Promise Visit Satisfaction
word of mouth, sms… customer journey… collateral …
advertising, direct marketing anticipation … moments of truth bags, cards, leaflets
web site, social media, twitter, first vistas, approach, process, assurance, memories
facebook
layout, environment, products, reminders, triggers,
promotional publicity
staff, facilities, exit experience … after service …
posters, street signs …
Brand Touchpoints
Managing the Process –
Physical … Human … Technical
coordination … consistency … control …

36. Touchpoint Synergy
Food Retail
‘Customer Journey’
Identifying opportunities … solutions

37. Touchpoint Synergy
People
‘Our people make the difference’

38. Creating Added Value
Differentiation
Brand Development

39. Differentiation
Why are you first choice?
Brand Development - Image & Reputation
• Convenience
• Products
• Service “Added Value”
• Experience
• Culture

40. Marketing and Communicating ‘added value’
Using media, activities and events to reinforce tangible and
emotional attributes … head and heart triggers.

41. Differentiation - Marketing
Methods & Media
Talking ‘at’ Talking ‘to’
ATL BTL ‘relationship ‘ marketing
Outdoor advertising Direct mail
Press Email
Radio Printed media through database …
T.v.
Personal contact
Web banners
Events / road shows
Web search engines
‘Brand Awareness’ Defines / triggers purchase
Mass Audience Targeted Audience
Difficult to measure benefit Easier to measure benefit /
outcomes

42. Differentiation - Marketing
Social Media Challenge
ATL Social media BTL
Opinions
Shared experiences
Price
comparison
sites
‘Awareness’ ‘Database Knowledge’
Customer
Target customer groups Individual needs
information / aspirations ‘triggers’ action

43. Differentiation - Marketing - Challenges
Savvy Customers - Product Reviews
‘To buy or not to buy?’

44. Differentiation - Marketing - Challenges
Comparison websites

45. Differentiation - Marketing
Email marketing – customer dialogue
‘immediacy – relevance’

46. Differentiation - Marketing
Brand Reputation … Equity
- P.R. Challenge
TESCO FISH FIGHT
International Benchmark –
credibility crisis …
Inept corporate governance?
‘Damage limitation’
When ‘sorry’ is not enough
…

47. Differentiation - Marketing - Sponsorship
Corporate Imaging’
Who gets the benefit?
Cynical endorsement marketing or mutual
reputation enhancement

48. Differentiation - Marketing
Discounter repositioning
creating quality credibility

49. Differentiation - Marketing
Customer loyalty – wishful thinking?
There is no such thing as loyalty … you are as good as your last
transaction / customer experience
Challenge - loyalty programmes not just cards
Transparent mutual deal - we really reward you - we learn about you - we
can serve you better.
It has to be relevant, clearly worthwhile, proactive.
Role Model - Tesco ... Increased investment ... Key factor in success …
Hard to ensure loyalty of a fickle, frugal
customer!
Retailer or Partner
card?

50. Differentiation - Marketing – Strategy
Different investments
Tesco
Tesco now has 16 million active Clubcard holders
in the UK, compared to 11.7 million people who
have a Barclaycard.
Tesco has earmarked further investment on top of
the £150m it pledged when it re-launched the
Clubcard.
iPhone, BlackBerry, Android, Ovi applications +
Asda
Invests in new TV marketing campaign
Improved likelihood to shop
Created better ‘my kind of supermarket’ perception
… and launched own T.V. channel on YouTube
‘saving you money TV’

51. Differentiation - Marketing - Private Label
- ‘More for Less’ … Something Different
- A key retailer differentiation strategy …
Obvious growth potential with Russian mindset changes
Less status conscious - more acceptable ... for anyone … democratic
Less brand loyalty - consumers more likely to switch
Demand for a bargain - need value for money with economy pressures
Trading Up - psychological requirement to treat yourself - premium own
brands e.g. Tesco Finest
Variety and Choice - new products / ingredients / flavours …
Organic and Ethical - retailer label ranges & opportunities

52. Differentiation - Marketing & PR
Creating awareness … desire .. reputation
Traditiona
l Marketing – promises … promotions ... events
Image ‘what you say about yourselves and offers’
development … billboards, T.V., radio, themed promotions /
activities …
Public Relations – corporate relationships,
Reputation events, messages / crisis management ...
development …
Today
Image and reputation ‘is what people say about you’
Marketing and P.R. activities and audiences are now
symbiotic – social media merges B2B and B2C
communication

53. Creating Added Value
Social Media Challenge
Staying relevant

54. Social Media Challenge
Creating a ‘joined up’ social media strategy

55. Social Media Challenge
Customer Connectivity
“… there are 59.7m internet users in Russia,
42.8% population” (June 2010)
61.9m people will use the internet in Russia by
2013” eMarketer
“Russians are the heaviest social networkers
worldwide in terms of time spent per user” eMarketer
not what retailers say … customers listen to each other ...
iPhones, wifi, … food forums etc

56. Social Media Challenge
Internet Transparency
Software Technology who is targeting who?
Software technology can track
and interface with customers
through loyalty cards, touch
screens and phone apps …
But, …. consumers can use
technology to create instant
damage or enhancement to
your brand
– cut and paste communities –
Facebook, fanclubs, Tweeters,
YouTube
http://www.adturds.co.uk/tag/sainsburys
Brand demolition!

57. Social Media Challenge
Customer dialogue – ‘the good’
Sainsbury Twitter …
‘almost’ real time response
to ideas and complaints.
Waitrose Forum
3500 people viewed single
chat about a food recipe.
24x7 customer service.
Not just
advertising!

58. Social Media Challenge
Managing reputations - ‘the bad’
556,308 fans … “4000 chavs a
year die from tesco cheap booze.
Every little helps”
Tesco had to pull the plug on an unofficial Facebook group of
2000+ called 'Tesco employees could rule the world’ where
staff abused their customers.

59. Social Media Challenge
Aldi Live Aldi Twitter
1,614 followers in Germany
4,615 Australia
USA Aldi
“hate” sites
…

60. Social Media Challenge
Russia
Facebook - Russian winter Twitter – 3,514 followers
campaign, 3,295 people like this
'enjoy the taste of our new cereal'
Perekrestok now have active
Twitter and Facebook pages.

61. Social Media Challenge
Black PR – Instant ‘cut and paste’

62. Creating Added Value …
Achieving a first choice Brand Experience
CUSTOMER EXPERIENCE BRAND REPUTATION
Awareness Customer Journey Afterglow
Promise Visit Satisfaction
word of mouth, sms… customer journey… collateral …
advertising, direct marketing anticipation … moments of truth bags, cards, leaflets
web site, social media, twitter, first vistas, approach, process, assurance, memories
facebook
layout, environment, products, reminders, triggers,
promotional publicity
staff, facilities, exit experience … after service …
posters, street signs …
Brand Touchpoints
Managing the Process –
Physical … Human … Technical
coordination … consistency … control …

63. Creating Added Value …
Achieving an effective management organisation
Brand experience – for customers and employees
Marketing Store Service Internet Workplaces
Departmental activities / functions
human resources
communications
marketing finance
buyers real estate
operations
procurement
logistics management IT
sales
Department collaboration?
Teamwork = Synergy

64. Thank You
8 Plato Place
72-74 St Dionis Road
London SW6 4TU
U.K.
www.scglondon.com