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Q&A: Asda CMO on Christmas and loyalty

Asda’s CMO Stephen Smith talks to Marketing Week about the switch from functional to emotional messaging in its Christmas advertising, loyalty schemes and his marketing priorities for 2013. Smith joined Asda from sister company Wal-mart’s China business this summer following former CMO Rick Bendel’s move to an international role.

AsdaChristmasAd

This year’s Asda Christmas ad

Marketing Week (MW): Why has Asda taken a different approach to advertising this year for Christmas?

Stephen Smith (SS): Being fresh to the UK market meant a few observations came together for me when I arrived in the summer. First that Asda’s marketing has been very effective, but it’s very functional. We deliver a hard hitting message but we don’t spend much time connecting on an emotional level.

When I arrived in June/July there was a lot of research looking back on last year’s Christmas activity and also our Mumdex research that found so many nuggets of information about how mums plan for Christmas. That helped us deliver a really compelling message, but still be really Asda about it, and offer ways to solve those problems that mums face this time of year. The best way to do that is in an emotional fashion.

MW: What is different about the pressures facing consumers this year that prompted that shift?

SS: So much has been communicated around austerity in recent years and Christmas is a moment where you should be able to step away from that. People deserve it. It’s been a tough year.

I think this year is different, but I’m not sure why - there has been a lot of hard austerity and not a lot of good news but our monthly income tracker has improved for the past four months.

MW: Beyond the TV ad what other ways is Asda marketing around Christmas and communicating this emotional message?

SS: We’ve really looked at what mums need for Christmas and part of that is our continued investment into keeping the price of basics like milk and bread low throughout quarter 4, so we’re helping weekly budgets and freeing up some money for something extra special. Also in our gifting and George gifting range we have gifts for under £5 to answer the needs of mums.

In terms of marketing channels, we’re using all the obvious channels and we’ve brought back radio in the second half of the year because I think radio is a really great channel for retail. We’ll carry on using press to deliver a hard hitting [price] message, and we’re also doing some great stuff in social. We’re working on a way to show all the great Asda products that feature in the ad together in one place connected to Facebook.

We’ll also be doing more around our multichannel and click and collect this year and will have rolled out free Wi-Fi to all stores by Christmas. We’re going to be fully integrated and using all the channels to make sure that we are wherever our customers are. You only have to look at the astounding growth of mobile to see it’s the future.

Our voucher activity will be similar to last year - whether you like it or not, vouchering is part of the market.

We had a successful Christmas last year, we’re not complacent and know we have to improve and we’ve done a lot of good pricing, advertising and marketing but vouchering is part of the plan.

MW: Will you take this emotional approach beyond Christmas?

SS: Yes, It’s something I’m interested in but also I’m aware that Asda’s marketing has been really successful in recent years so i’m not looking to come in a blow everything up and go a different direction. I’m trying to figure out the correct adjustments to make to continue to grow the business.

MW: Since you’re bringing a fresh perspective to Asda’s marketing approach, is a loyalty scheme something you will consider?

SS: We have a loyalty programme called EDLP (Everyday low prices) and I honestly believe that if we can be the lowest price supermarket, we don’t have gimmicks, we don’t make you buy products or brands you don’t want, you know what you’re getting and we’re guaranteeing were the lowest price by 10 per cent with Asda Price Guarantee - that is fantastic loyalty with our customers.

A CRM programme is just another kind of marketing, and it’s expensive. It’s not in our domain - we are an EDLP operator and we can treat everyone the same, offer everyone equally and give them the best value every day. If there are new and different ways to communicate to customers, as mobile and online grows if there are more ways to communicate with them then fantastic. Loyalty schemes like our rivals have are expensive and you have to have high-low pricing to make it work and we don’t believe in that.

MW: You’ve moved between the US, Belgium and China in the last 18 months, how is that international experience influencing your approach to Asda?

SS: It helps on a macro level and how I think about marketing. The content of marketing is always specific to the country but the experience I’ve built up all builds to a better approach. I’ve spent a lot of time observing in the UK and all the research has really helped me get into the mind frame of the Asda mum in the UK.

MW: What are your priorities beyond Christmas and into next year?

EDLP and making it a compelling message to customers so they truly understand the value of EDLP is a big deal for us. I believe that EDLP is not as well understood as it could be and it’s a huge competitive advantage that we need to push.

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