Charlene Li & Josh Bernoff: Groundswell: Winning in a World Transformed by Social Technologies
Chris Anderson: The Long Tail: Why the Future of Business Is Selling Less of More
Clive Humbly: Scoring Points: How Tesco Continues to Win Customer Loyalty
David Weinberger: Everything Is Miscellaneous: The Power of the New Digital Disorder
Don Peppers: Return on Customer: Creating Maximum Value From Your Scarcest Resource
Don Tapscott and Anthony D. Williams: Wikinomics: How Mass Collaboration Changes Everything
Jim Taylor: Space Race: An Inside View of the Future of Communications Planning
Kate Fox: Watching the English - The Hidden Rules of English Behaviour
Malcolm Gladwell: The Tipping Point: How Little Things Can Make a Big Difference
Mark Earls: Herd: How to Change Mass Behaviour by Harnessing Our True Nature
Shelly Palmer: Television Disrupted: The Transition from Network to Networked TV
Tim. Ambler: Marketing and the Bottom Line (2nd Edition) (Financial Times Series)
Coles and Woolies' Death Star moment: the beginnings of the brand rebellion in Australia's Supermarket Store Wars
my return from a rather long winter blogging break has been greeted with the glad tidings that some brands have finally chosen to take a stand against the big two Australian supermarkets. Adnews reports today that Glenn Cooper, boss of Coopers Brewery has described Coles and Woolies as being the "killers of Aussie brands". Cooper went further:
SMH only last week reported that this is an opinion recently echoed by no less than Heinz' chief financial officer and executive vice-president Arthur Winkleblack. in a briefing to US analysts on the company's first-quarter earnings, Winkleblack specifically name-checked the Australian supermarket sector and blamed them for an erosion of its margins. sentiments echoed by Heinz' chairman and chief executive Bill Johnson:
the supermarket's argument is manifold and includes the rationale that this is all in consumers' interest - a Coles spokesman, in response to Winkleblack's comments, stated that "We agree with Heinz's comments that companies need to be competitive to ensure the best outcomes for customers."
but consumers don't benefit from Supermarket competition. the concensus of an April opinion piece in the Sydney Morning Herald was that consumers - if they see any benefit at all - see it only in the short term. Academic Angela Paladino commented that:
Nick Stance, Chief Executive of Choice agreed:
there are only two winners in Coles and Woolies' Store Wars; and that's Coles and Woolies. brands have and continue to exist at the mercy of these distribution Death Stars. now Coopers and Heinz have come out of the supermarket closet. it's just two brands. but that's two more brands than a few months ago.
Coopers and Heinz's coming out is important. brands standing up to Coles and Woolies is important, because the dominance of Coles and Woolies is hurting brands ... not least in expectations of media investment...
I've sat in more meetings that I care to recall where there have been two invisible seats at the table. in discussions where the spectre of supermarket's expectations for media investment loom large over marketers, marketers dependent on these two Death Stars for significant - and often increasing - distrutions volumes.
it's a sweeping generalisation to say that Australian brands are too dependent on the broadcast interruption model (of which TV spot advertising is the main solution) for their marketing needs. never-the-less its a generalisation that I believe is true. a reliance on this 20th Century marketing model isn't just down to the pressures and expectations of Coles and Woolies on media spends, but they sure as hell play a very significant part: too many brands over-invest in broadcast interruption because its what supermarkets want and expect to see on those brands' media schedules. supermarkets' expectations are holding back brands' media innovation potential.
but the effect and influence isn't limited to consequences above-the-line (a term which I hate but I'll run with anyway). prices are down. great. but its not the supermarkets funding this price decrease - it's brands. manufacturers are paying for prices to be down with their below-the-line (ditto) budgets. and because prices are down for good manufacturers will be paying for them to be down ... for good.
The Order of Coopers - owned and earned media curating a community for the brand
what is phenomenal in this context are the levels of innovation that do get out of markets and agencies' doors and into the world. despite the vast majority of bought media investment being diverted to an outdated (and actually never that well proven model), Coopers - for example - have built a hugely utilised online site and community. they are investing in owned and earned media that are building a community with direct links to their brand and business that side-steps the supermarkets' Death Stars.
brands, it would seem, are starting to have had enough. the Supermarket's weaponary have become simply too powerful to ignore. to paraphrase Senator Organa, 'the more you tighten your grip Coles and Woolies, the more brands will slip through your fingers'.
the rebellion, I very much hope, has begun.
full disclosure: I work as a media strategist for several brands that have distribution through Coles and Woolworths in Australia. the above comments reflect my, and my opinions alone. the advice and recommendations I make to brands take these - as well as other - opinions and considerations into account.
Posted by chris stephenson on Wednesday, 07 September 2011 at 18:38 | Permalink | Comments (0) | TrackBack (0)