The appointment of Roger Burnley as CEO from January and his subsequent appointment of Thakrar as his Chief Strategy Officer implies we should expect change at Asda over the coming 12 months.
The last 12 months have seen a simplification of the business, reduced cost, fewer promotions, clearer messaging, which is ideal for a business in pursuit of a clear goal. Phase 1, tick. Not very dynamic though. Changing lots of things by a small amount has impact, most certainly, however to have a significant impact on its path, there needs to be step change in strategy, to compel more customers through the till.
Where Asda have been left behind in recent years is store formats. Asda do not have a convenience offer. An Asda customer cannot get a meal for tonight’s dinner in town on the High Street. The rate of growth of sales coming through this format for the other major grocers is significant and presents Asda with an opportunity to grow if they can find a way to that market.
Morrisons tried and failed with their own facias, so they took a different approach, reaching that customer through their deal to supply Amazon. Then there is the opportunity to supply our newsagents and corner shops through a whole sale division. Thinking laterally has borne fruit for Asda’s competitors. Asda need to engage that part of the organisations thinking.
Asda pulled out of Black Friday last year despite the fact that they were the first to launch it in the UK. They took customers at their word, listening when they asked for EDLP. However, with the noise and deals that surround Black Friday, the customer will be drawn away, no matter how loyal. Asda may consider re-joining the Black Friday foray next year and take their chances, or they may consider creating their own unique twist on Black Friday to stand out from the crowd again. EDLP strategy does not have to mean no promotional excitement in the calendar at all. It can sit alongside discreet and focussed events that present something new to the customer outside of their normal shopping patterns.
We hope that the incoming Chief Strategy Office will have an influence on marketing. The Asda Christmas advert this year takes the excitement and fun of Christmas food and shows how it has been created in the Imaginarium. Appealing to children and adults, the advert features some of the innovative products Asda has to offer at Christmas, giving the customer a reason to visit the store.
From the ubiquitous roast potato to a smashing igloo dessert, the appeal is evident, price is the only thing missing. What messages resonate with the Asda customer though? What is core to their reason for shopping at Asda? Price sits up there. We have seen Aldi’s clever, fun focus on price and product and see an opportunity for Asda to take back that place in the customer’s conscious.
Optimism is definitely high for Asda, despite a few words of warning starting to permeate from the analyst’s quarter of a slow Christmas. Christmas spending could be early, taking advantage of Black Friday, or late, waiting for retail nervousness to trigger early discounts. It just depends which report you read. Our view is that Asda will muddle through this Christmas, but with Burnley’s strong leadership skills on board, Asda will be upping the pace next year.