It doesn’t take a genius to work out that
Wal-Mart are not having a good time of things recently. The month started badly
with the news that their market position in the UK had slipped mostly due to
impressive performance from the discounters.
Asda have struggled to hold share for most
of 2013 and this issue has not gone unnoticed by the management team who plan
to address some of the issues faced with a £1 billion reinvestment plan. If you
want to run through the detail you can check out the below article however I
wouldn’t expect any surprises. In fact you could be mistaken for confusing this
to something Tesco may have released years ago. With a strong focus on
convenience, increasing online sales and addressing quality you might be
forgiven for asking where is the innovation?
It is clear that Asda are working to the
motto that spending money makes money, which is a popular strategy for many of
the big boys in retail recently. However will any of the planned changes make a
difference to some of Asda’s underlying issues as a company?
For a long time Asda Wal-Mart have had a
chip on their shoulder when it comes to the power of loyalty and data. The
American juggernaut is convinced customers are purely motivated by price and
the concept has traditionally allowed them to grow into the company they are
today. But is this proposition viable as we move into a world where
understanding big data becomes more and more important?
Wal-Mart’s recent negative press in the US
regarding the treatment of staff and the subsequent attention this has garnered
via social and more traditional forms of media demonstrate why Wal-Mart may
want to consider their loyalty proposition.
As customers become more informed and the choice
they have increases they will begin to transfer more of these beliefs and
values into their consumption decisions. Wal-Mart need to understand how these
types of decisions can impact their brand reputation and consequently sales. If
they truly believe that price drives the loyalty of customers then they are
also in a position where they will continue to loose to the smaller discounters
who can offer further discounts. So the Brand Avenger would suggest spending a
little bit of that money in building a loyalty proposition may not be so much
of a bad idea.
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