Andy Bond, chairman of Asda, revealed his future vision of retailing at the Consumer Goods Forum’s Global Summit yesterday.
“There has been an irreversible shift from shoppers as consumers to consumers as participants in every one of our businesses,” he said.
According to Bond, companies have started to be run by the consumer for the consumer.
Bond pinpointed global trends and said people throughout the world were reevaluating how they spent their budgets as a result of worldwide recession.
In Mexico, for example, mums have stopped shopping with kids to spend less, while in China consumers are shopping less frequently and close to home.
In the UK, meanwhile, people are taking advantage of the internet before they shop in order to make sure they are extracting as much value as they can out of their pound, said Bond.
And he cited Asda’s new Price Guarantee tool, which lets customers examine the cost of their shopping online and will refund the difference if found cheaper elsewhere.
As part of the Wal-Mart family, Bond said Asda was entering a new era of price transparency when shoppers can switch allegiance at the touch of a button.
Bond warned delegates that although customers may look the same the means of engagement with retailers has changed.
“The age of abundance is over,” he said, and revealed 75% of people have a longer term attitude to waste and two thirds are recycling more.
Trust is at its lowest level ever and people are reaching out to take control of their own lives, he said.
Via the internet, they are better informed. Its scope is immense, and Bond said that if facebook was a country, it would be the third largest in the world.
Bond highlighted social trends such as 16-year olds who have never known life without the internet or mobile phones.
“To them CDs are little quaint or novel,” he said.
Bond revealed Nielsen data, which shows half of all 10-year old children in the world have a mobile phone and the average teenager sends 2,000 texts a month.
Bond referred to his 12-year old son, Ben, who buys all his own cricket equipment but has never been in a shop. He likes music but has never bought a CD, likes sport and drama but doesn’t watch it on TV and has never used a landline to make a telephone call.
However, Bond warned delegates digital trends were not solely focused on young consumers.
“Don’t be fooled about this being about the youth of today,” he said, “adults spend three times the amount of time browsing the web.”
Bond said Asda shoppers were engaged online more than the UK average – 56% have a social networking profile and 7% own a blog and they are no longer satisfied with just buying a product or service, he said.
The shift to customers as participants was revealed on Asda.com, which has received 90,000 product reviews in the last year.
Bond said that in this new era of ‘democratic consumerism’ people are reaching out for help – customers want more say and more involvement.
Bond told delegates there were three ways of embracing this trend:
- give consumers control
- greater transparency
- harness consumer desire
Bond stressed it was “not about losing control of the business but that we all run a better business by letting consumers in”.
He went on to present three Asda initiatives, which do just that.
‘Chosen by you’ hands over control to customers to approve own label lines before they go on sale. Bond said 4,000 products would be vetted by a consumer panel before going on sale in October,
“Shoppers tell us face to face what they think about our products,” he said.
Similarly, 1,000 mums have been consulted about the fit of school uniforms. As a result, Asda has changed the length of zips, introduced easily adjustable hems and waist bands and put extra pockets on boys’ trousers.
Secondly, Asda has increased transparency on its Your Asda corporate website with a series of regular buyer blogs about products and services and it has installed webcams across areas of its business.
“Any business that is not prepared to open up to increased scrutiny will be viewed with suspicion by customers,” he said.
Bond said there were 200 facebook groups for Asda alone and only one was the retailer’s own.
Bond revealed that in another trial Asda was allowing reviewers to become advocates of its products and highlighted Zeebee, its number one contributor in Oxfordshire, who has completed more than 100 product reviews of George clothing.
“People want references from people like them versus us,” he said.
Bond said Asda was encouraging people to post reviews and if they were bad it would share its response.
Finally, Bond said Asda’s Bright Ideas initiative was designed to make the retailer an ideas factory.
“We are going to look to our customers and reward customers who come up with clever ways of saving money,” he said.
Bright Ideas launches later this year and will reward customers with 5% of the savings they make for Asda.
“It’s a time of great change but if we all embrace it we will continue to have great success in uncertain times,” Bond concluded.