A few weeks ago I did a presentation for the managers of a major global food manufacturing business on digital tools and what they might mean for their business. One of the major topics for discussion was using digital tools to connect to the consumer in order to try and level the playing field between food suppliers and the major supermarkets.
I was watching the ABC news here in Australia last night and there was a story about that iconic Australian biscuit the Tim Tam being pulled from the shelves at the major supermarket Coles because the supermarket was refusing to pay a higher price.
The story is a microcosm of the one that is being played out across the spectrum of products in Australian supermarkets and is now moving into new territory. You can see more detail on the story at:
Coles pulls Tim Tams from shelves as Arnotts price war goes public
In the end Coles relented because there is so much demand for Tim Tams. There are only a handful of products that can afford to go head to head with the major supermarkets in Australia because their hold in the mind of the consumer is so strong. Tim Tams is one, Coca Cola is another, Huggies nappies and Pal dog food are on the list. The rest are in a perpetual battle on price and shelf space where the supermarkets hold the whip hand because they control the gateway to the consumer.
The supermarkets hold that gateway and also now hold masses of data connected to loyalty cards and credit cards so they have a a continual view of what is working and what is not. The standard way of the suppliers to gain a greater foothold has been branding and marketing campaigns that try and catch the mind of the consumer.
Over the last few years social media has been the added tool that many have used to try and capture the hearts and minds of the consumer. That does not always work as evidenced by the disastrous taxi social media campaign (#YourTaxi campaign backfires as passengers share horror stories) here in Melbourne:
@yourtaxis Every single woman I know has, at some point, been sexually/verbally abused by a cabbie & now every single woman I know uses uber
.@yourtaxis Got kidnapped by a driver who wanted me to pay more than was on the meter. Had to call police to pull us over. #YourTaxis
.@yourtaxis last time I caught a taxi he had no idea where he was going and stayed on his mobile the whole time. Uber from now on #YourTaxis
Good and bad news is that messaging apps like Facebook Messenger and WeChat are moving heavily into this space as described in this great Wired article Facebook Messenger: inside Mark Zuckerberg’s app for everything .
Essentially Messenger seems to be trying to emulate the WeChat model of putting services inside the app like payment systems, airline bookings, etc in order to keep users inside the app and therefore in their ecosystem rather than elsewhere in the mobile or internet ecosystem. This is both good news and bad news for suppliers to supermarkets. The good news is that the way the apps are configured is creating a much closer one to one relationship with a wider range of customers rather than just communicating with “fans” on social media. The bad news is that if they go down this route then they will be swapping one gateway controller for a different one.
Now the supply of supermarket items is much different than the supply of airline booking services as described in the Wired article. Suppliers can think about product changes or they can reconfigure the delivery system. In my next post I will put forward some ideas on how that might happen.
You can read that at:
Beans, Uber and the Post Office