The supermarket sector’s battle for both market share and consumer love has been unrelenting. The challenges are well- documented. The "big four" continue to decline in value, with Tesco and Asda losing ground to discounters Aldi and Lidl. Shopping habits are changing – for instance, gigantic out-of-town one-stop supermarkets are no longer relevant to shoppers wanting more local produce or more trips to smaller stores. Supermarket price wars show little sign of abating. And then there is Amazon making its foray into grocery. It’s hard to imagine how much more upheaval this sector could take.
"When things get tough, advertisers think they need to review everything about their business. And guess what is most easy to review? Advertising," Neil Christie, managing director at Wieden & Kennedy London, says. He should know. Early last year, Tesco – reeling from an accounting scandal, a damaged reputation and declining market share – moved its £110m creative account from W&K to Bartle Bogle Hegarty without a pitch.
The main battleground in the sector is the "big boys in the middle who are pretty much offering the same thing" in an attempt to win back customers, Christie believes. Much of their advertising lacks differentiation and relies heavily on price-oriented marketing.
All supermarkets have allowed their brand strategies to become led by messages focusing on price and competition. Copycat marketing has also led to blurred identities, with little clarity of brand vision. Where is the creative spark that will allow super-markets to rekindle their connection with the great British public?
"The ‘big four’ are struggling in the absence of making a competitive play on nothing other than price. They need to stand for something," Melissa Robertson, chief executive of Now, says. Now’s founding client Waitrose shifted its £25m account to BBH five years ago. Last year, BBH ended its relationship with the brand in order to pick up Tesco. Waitrose subsequently appointed Adam & Eve/DDB after a competitive pitch.
"The marketing strategies of both Tesco and Asda, arguably, continue to be driven by price. Sainsbury’s is slightly in no-man’s land, where it doesn’t really know what it is any more; and Morrisons shares a similar space," Robertson says. "The challenge is how these brands can differentiate themselves. The supermarkets need to up their game in this regard, as Aldi and Lidl have certainly been the most effective at doing this over the last two years."
Aldi and Lidl have both been ramping up their advertising spend. Lidl is now the biggest UK retailer in terms of traditional media spend after increasing its marketing budget over three consecutive years. The "big four" all cut their adspend in 2015.
In search of differentiation
"The disruption to this sector began with the arrival of the discounters, but now they are cranking up that pressure with the sheer volume of advertising they produce with a very clear proposition in price blending into quality and service," Leo Burnett planning director Max Keane explains. The agency recently launched The Co-operative Food’s retro-rebrand TV ad – the first campaign since it successfully retained the business earlier this year.
Amelia Torode, chief strategy officer at TBWA\London, which looks after Lidl, says 2016 is the year the discount supermarkets have found their confidence and a sense of self, which goes way beyond price. She confirms that the new Lidl campaign, to be unveiled in a few weeks’ time, will take the brand out of the discount category and "talk loud" about its brand values. "There is an inherent problem with trying to be everything for everyone, hence this confusion in advertising in the sector," Torode says.
There’s always been a perception that convenience stores are a bit shit. Our approach is to show that you can have great quality food right at the heart of your community - Max Keane, Leo Burnett planning director
Aldi, meanwhile, has more than doubled its market share in the past four years, overtaking Waitrose to become the UK’s sixth-largest supermarket. Neil Godber, J Walter Thompson London’s head of planning, says the discounters have every right to be full of chutzpah because they are confident in their offer. "The trouble is if a Tesco offers you cheap but decent quality, you expect the middle man to be squeezed and it can hurt a consumer’s ethics," Godber says. "Lidl and Aldi have both managed to find a way around that, which is incredible, and therefore the reason why they are being so expansive in their advertising. It is not just about focusing on the basics any more – they are much more than that. The Aldi spoof Cadbury ‘Gorilla’ ad for Easter, for instance."
But that is not to say there has been silence on the part of the "big four". Asda, Tesco, Sainsbury’s and Morrisons have all tried to venture beyond shouting about pricing by inspiring shoppers to love them that little bit more.
Try something new today
Beyond good food, quality and service, is there something more purposeful that supermarkets can stand for? It is not that they have not played their part in helping communities through some creative strategies. Take the Sainsbury’s campaign that challenged shoppers to feed their family for a fiver, the Tesco "Computers for schools" initiative and Morrisons’ "Let’s grow" programme encouraging schoolchildren to learn more about how food is grown.
In a market that can appear oversupplied and undifferentiated, the survivors will be those that offer something truly distinctive. So supermarkets need to ask themselves tougher questions about what kind of value they want to offer – for instance, resolving a social issue such as obesity through health initiatives or owning a clear point of view in its food offering such as local sourcing, according to Tammy Einav, managing director at A&E/DDB.
Both Einav and Torode add that it is not just the advertising approach that needs to change but also business models. The problem, Christie argues, lies in the fact that the sector does not look beyond its own and is therefore unable to deliver any kind of promise that could motivate and inspire people.
The answer might be to look at other categories that are being disrupted just as much as supermarkets, Robertson suggests. For example, the finance industry, which has been trying to show its core value and purpose in order to rebuild a battered reputation.
"All these highlight advertising in itself isn’t the answer – but that there’s never been a more critical time for agencies to demonstrate their value through bold ideas that shape the direction of a business, not just a campaign," Einav concludes.
It is too early to predict whether the recent spate of advertising reviews will lead to a creative resurgence in the sector. But it is clear that supermarkets urgently need differentiation and a strong voice in their marketing.
From the John Lewis "Man on the moon" Christmas spoof last year – a tactical ad marketing its telescopes – to the recent Easter campaign mocking Cadbury’s classic "Gorilla", Aldi has demonstrated both agility and confidence in its brand voice, one planner says.
Aldi’s ads have been warming the public’s hearts since 2011, when one of its first stars – an 83-year-old woman – became an online sensation. In the TV spot, she told viewers that her husband likes both branded and Aldi’s own teabags before adding: "I don’t like tea. I like gin."
Saatchi & Saatchi
Asda recently unveiled the first work from Saatchi & Saatchi since newly installed chief marketer Andy Murray handed both the brand’s creative and media accounts – worth an estimated £95m – to Publicis Groupe agencies in a dramatic move. The new campaign – reminiscent of Sainsbury’s partnership with Jamie Oliver – has recruited celebrity chef and former Saturday Kitchen host to showcase recipe ideas.
"Martin is a very astute choice for Asda. He’s liked both by men and women, has food credentials, is a Yorkshire lad, and speed and modernity are his thing. A brilliant fit for the brand," an agency executive points out. "Asda is, of course, trying to ‘do a Jamie’ with this campaign – even the tagline, ‘Save money, live better’, is very similar to Sainsbury’s ‘Live better for less’."
The highly successful "#LidlSurprises" brand campaign has helped move Lidl to the forefront of conversation with topical, reactive ads.
"The quality of the food and the variety at Lidl have always been the same pre-advertising, but nobody trusted or believed in the quality. Advertising shone a light on this and wrapped it in a brand that people could relate to, believed in and liked," Torode says. "You have to remember, before it started advertising, we all knew it was cheap. But it doesn’t matter if it is cheap but you don’t want to buy it."
The Lidl shopping bag is now a badge of honour for the savvy shopper, she adds.
The "family drama" campaign – the first work since Morrisons appointed Publicis London as its new agency earlier in the year – was unveiled in March. The work, which brings out the emotion of food, launched the supermarket’s new brand proposition, "Morrisons makes it", and featured a family inviting relatives and friends around the table for Easter.
One insider says the time that Morrisons "stormed it" was when it had a very clear objective to up the food quality in people’s minds. That campaign featured celebrities pushing trollies up and down the country, showcasing Morrisons’ in-store Market Street.
"The new campaign neither delivers emotional punch nor says anything about the brand proposition or value," the insider adds.
Abbott Mead Vickers BBDO
From Jamie Oliver to the Paralympics, the 90s "Famous recipes" ads (which frequently resulted in items that featured selling out) to the most recent Mog Christmas campaign, Sainsbury’s has produced some of the most successful ad campaigns in the sector.
Critics, however, say a lack of clearly defined marketing strategy recently has meant that the grocer is now in a difficult position. Godber sees a missed opportunity in its current strategy. "Sainsbury’s can be so much more confident. It has the opportunity to teach the nation how to cook better or teach us the value of food – that is its gift to give," he says. "In a world where brands are trying to offer people help, it could be pushing so much harder, rather than simply pushing lots and lots of product ads with a slight twist."
Bartle Bogle Hegarty
Tesco unveiled its first significant work since former marketer Dave Lewis took the helm and appointed Bartle Bogle Hegarty to help turn around its dented reputation. Tesco refreshed the iconic "Every little helps" slogan for the campaign featuring Ruth Jones and Ben Miller.
Christie finds the campaign disappointing because it fails to deliver on its promise of entertainment and information. "I can see why Tesco’s gone down that character-based route. It will help it accommodate anything from a service promise to a price message across the bank to mobile service," he says. "It just seems weak. I don’t see a strong point of view that is geared towards winning the trust of its customers, and that may be because it just hasn’t got anything it can say."
Godber, however, commends the work: "Whether or not you like the campaign creatively, its proximity to the Dotty campaign has to be applauded. It goes back to the time when Tesco understood shopping is a bit of a pain and that it could make it less of a pain. From a planner’s perspective, I think Tesco is back on track."
The Co-operative Food
The Co-operative, an "ethos-driven" brand, is a planner’s gift, one agency strategy chief says.
"The Co-op is a community-based brand – that is in its DNA. The new campaign embraces this core strength in community and convenience," Keane explains. "There’s always been a perception that convenience stores are a bit shit. Our approach is to show that you can have great quality food right at the heart of your community. That’s really where the brand wants to be."
But it was hard to find many enthusiasts for the new retro campaign. Torode says the Co-op has a fantastic business model that differentiates it from others in the market but the new work "leaves me cold".
Adam & Eve/DDB
In a recent campaign, a dairy cow wearing a lightweight camera took centre stage in the hope that shoppers would connect with the farms that their food and drink come from.
Christie and Keane believe Waitrose has a very defined marketing strategy that allows creativity to flex its muscles.
"Waitrose’s ‘Everything we do goes into everything you eat’ campaign taps into deeper values around natural-ness and slow food. What’s smart is that this approach helps set the brand apart by reframing what quality is and how only Waitrose’s values give you that," Einav adds.
In the supermarket’s latest results, sales grew 2.1% year on year in the 12 weeks to 22 May, with share of the UK grocery market reaching a record 5.3%.