Here it is - ‘that’ speech by Andy Bond at the IGD annual convention. We’ve had to cut out bits for space reasons, but the rest is straight from the horse’s mouth, so to speak…
I know it’s standard practice to start your speech off with a joke. But I’m not a standard sort of guy and I don’t think Asda is a standard sort of retailer - so I’m going start off with a question. How many of you think our industry has flair?
I don’t just mean the supermarkets and I don’t just mean the suppliers - I mean the entire industry. If you looked at the bumph you were sent before you came here today, there was a lot of stuff about the flair factor. And flair was described as a combination of imagination, charisma, vision and energy.
Do we have that? Are customers getting any of those things? Quite frankly, they’re not. And I think that’s one of the reasons so many of us are struggling, not just in the grocery trade but in every customer-facing business.
Every day there’s another gloomy trading statement from another well-known brand. In the supermarket sector, nearly everyone is having a tough time. Sainsbury is trying to turn itself around; Morrisons is - well, I’m not even going to go there; and us - we’re not where we used to be and we’re not where we want to be. I’m not saying it’s bad, but it’s not good enough. Even Tesco is complaining.
So, why are we all finding life so hard? Of course higher taxes, higher energy prices and all that economic stuff are partly to blame for consumers not spending as much as they did. But it’s too easy to blame external factors. We must shoulder the blame too, because we’re not delivering what customers want. They want flair -- and they’re not getting it. Instead, they’re getting bland, amorphous sameness.
Look at the businesses that are thriving - Primark, Virgin Mobile and Innocent in the UK, or Loblaws and Target in North America and Inditex in Europe, the owners of Zara. These businesses have all thought outside the box and changed the paradigms. Zara is a classic example. When it burst onto the scene, it would take up to 52 weeks to get a fashion item from designer’s notepad to shop floor. Now it takes four to six weeks to design, source, make and distribute clothing globally.
That’s flair, that’s innovation and that’s success. Coming from George, one of the first things that struck me about food retailing was how stuck in the mud it was. The flair ain’t there. Nothing much has changed since M&S produced its first convenience meals back in 1973. The point is: what we are producing is simply not interesting enough.
If you look at two Asda ready meals - one from 15 odd years ago and one from today - you can see how little has changed. We’re just not innovating enough. And think about how long it takes to put a new product on the shelves - between 24 and 26 weeks - and sometimes longer. Yet common sense would suggest clothing is more complicated than food. So how can the clothing trade do it in six weeks and it takes us half a year?
Our whole process is stifled by inertia and bureaucracy. It’s almost as if we don’t want to be inventive. I can see a lot of you nodding your heads, particularly the suppliers. You’re probably thinking, ‘Doesn’t Andy realise that it’s his guys who are making it hard. Doesn’t he realise what we have to go through when we come up with a new idea?’ Of course I do - and I’m saying things have got to change. Can you imagine what a huge difference it would make if it took us a few weeks to go from idea to shelf? It would be fantastic.
And it would mean we could afford to be a bit more daring. A lot of us are confusing innovation with incremental change. People think they’re being innovative when they bring out a variation on an old theme - a new type of Kit Kat, for instance - but really, it’s just more varieties of sameness, rather than truly new ideas. So what does this tell us? Quite simply, we’re being far too cautious - far too grey-suited. And we need to be radical. Because customers don’t notice incremental change. Most of them are too busy and in too much of a hurry to care.
It’s time to stop thinking evolution and start thinking revolution. If we don’t start being more innovative and acting with real flair, we’ll all end up converging. In fact, it’s happening already. If you look at the interiors of the major supermarkets in the UK, you can’t tell the difference. They all look the same. No wonder so many people hate supermarket shopping. It’s boring.
The first bad thing about convergence is, it’s dull. And the second bad thing is that the biggest operator always wins. Because, if there’s nothing to differentiate one store from another, the supermarket with the most sites wins out. It’s self-perpetuating, it’s dull and it’s not what customers want.
Perhaps one of the reasons we’re all being so boring is because we’re focusing too narrowly on productivity. I don’t mean that we shouldn’t care about it. It is absolutely vital that we keep costs down and efficiency up. But we need to move beyond it. We need people who are truly excited by what we do - traders, operators, creators.
So I’m throwing out this challenge today. It’s time to show customers that we can turn them on, if we try. Right now, I don’t have all the answers but I do have loads of ideas and I’m in a great position to have a go - because I’m not a grey suit and I work for Asda, which has a history of being innovative.
One area where we really try hard - and where we’ve always done our best to stand out - is in our dealings with suppliers. We’re happy to deal with local suppliers, even if they can supply just one store.
We have a history of working hard at supplier relationships because we always thought that if we were good to our suppliers, they’d be good to us - and the customer would benefit. But it doesn’t seem to be working lately. We’ve gone out of our way to be nice, but we’re not getting much payback. Suppliers seem to treat us all the same. And that’s part of convergence.
It seems to me that suppliers simply don’t dare to establish points of difference between supermarkets any more. But what is the point of Asda being good to its suppliers if we get nothing in return? What is the point of me putting myself out for them when they don’t put themselves out for me?
This isn’t meant to be a threat to suppliers. Actually, it’s an invitation - an invitation to start changing, to start thinking about flair. Let’s work together and put the fun back into food. Let’s re-establish points of difference between Tesco, Sainsbury, Morrisons and Asda. None of us retailers can do it on our own. We need to work with our suppliers.
At Asda, we want to be at the forefront of the new flair movement. I’m asking suppliers to help us. Help us to implement with flair. Don’t be afraid to stand up to bully-boy tactics from other stores. Don’t be afraid to say that different companies will have different terms and different relationships. Don’t dumb down relationships so there’s no longer any point in working at them.
Remember that we’re all in this together - manufacturers and retailers. We have to stop giving customers what we think they want and start giving them what they really do want. In a world where consumer habits change at the drop of a hat, it’s the customer-centric businesses that are going to win out. So how many retailers have really sat back and thought about what’s happened to shopping habits over the past 10 years?
Consumers used to be split between those who were happy to overspend and those who focused on price. Now consumers are more savvy. They’re into smart value - brands that have style, quality and truly low prices.
We have to be prepared to take risks. You can’t always get it right first time and if you’re not prepared to get it wrong sometimes, there’s a big risk that you’ll never get it right. So let’s start really listening to what customers want. Let’s stop copying each other and start standing up for ourselves. Let’s put the passion back into our business.
The flair movement is starting right here, right now. Let’s make it happen. At Asda, we’re determined to do it. Are you?
I know it’s standard practice to start your speech off with a joke. But I’m not a standard sort of guy and I don’t think Asda is a standard sort of retailer - so I’m going start off with a question. How many of you think our industry has flair?
I don’t just mean the supermarkets and I don’t just mean the suppliers - I mean the entire industry. If you looked at the bumph you were sent before you came here today, there was a lot of stuff about the flair factor. And flair was described as a combination of imagination, charisma, vision and energy.
Do we have that? Are customers getting any of those things? Quite frankly, they’re not. And I think that’s one of the reasons so many of us are struggling, not just in the grocery trade but in every customer-facing business.
Every day there’s another gloomy trading statement from another well-known brand. In the supermarket sector, nearly everyone is having a tough time. Sainsbury is trying to turn itself around; Morrisons is - well, I’m not even going to go there; and us - we’re not where we used to be and we’re not where we want to be. I’m not saying it’s bad, but it’s not good enough. Even Tesco is complaining.
So, why are we all finding life so hard? Of course higher taxes, higher energy prices and all that economic stuff are partly to blame for consumers not spending as much as they did. But it’s too easy to blame external factors. We must shoulder the blame too, because we’re not delivering what customers want. They want flair -- and they’re not getting it. Instead, they’re getting bland, amorphous sameness.
Look at the businesses that are thriving - Primark, Virgin Mobile and Innocent in the UK, or Loblaws and Target in North America and Inditex in Europe, the owners of Zara. These businesses have all thought outside the box and changed the paradigms. Zara is a classic example. When it burst onto the scene, it would take up to 52 weeks to get a fashion item from designer’s notepad to shop floor. Now it takes four to six weeks to design, source, make and distribute clothing globally.
That’s flair, that’s innovation and that’s success. Coming from George, one of the first things that struck me about food retailing was how stuck in the mud it was. The flair ain’t there. Nothing much has changed since M&S produced its first convenience meals back in 1973. The point is: what we are producing is simply not interesting enough.
If you look at two Asda ready meals - one from 15 odd years ago and one from today - you can see how little has changed. We’re just not innovating enough. And think about how long it takes to put a new product on the shelves - between 24 and 26 weeks - and sometimes longer. Yet common sense would suggest clothing is more complicated than food. So how can the clothing trade do it in six weeks and it takes us half a year?
Our whole process is stifled by inertia and bureaucracy. It’s almost as if we don’t want to be inventive. I can see a lot of you nodding your heads, particularly the suppliers. You’re probably thinking, ‘Doesn’t Andy realise that it’s his guys who are making it hard. Doesn’t he realise what we have to go through when we come up with a new idea?’ Of course I do - and I’m saying things have got to change. Can you imagine what a huge difference it would make if it took us a few weeks to go from idea to shelf? It would be fantastic.
And it would mean we could afford to be a bit more daring. A lot of us are confusing innovation with incremental change. People think they’re being innovative when they bring out a variation on an old theme - a new type of Kit Kat, for instance - but really, it’s just more varieties of sameness, rather than truly new ideas. So what does this tell us? Quite simply, we’re being far too cautious - far too grey-suited. And we need to be radical. Because customers don’t notice incremental change. Most of them are too busy and in too much of a hurry to care.
It’s time to stop thinking evolution and start thinking revolution. If we don’t start being more innovative and acting with real flair, we’ll all end up converging. In fact, it’s happening already. If you look at the interiors of the major supermarkets in the UK, you can’t tell the difference. They all look the same. No wonder so many people hate supermarket shopping. It’s boring.
The first bad thing about convergence is, it’s dull. And the second bad thing is that the biggest operator always wins. Because, if there’s nothing to differentiate one store from another, the supermarket with the most sites wins out. It’s self-perpetuating, it’s dull and it’s not what customers want.
Perhaps one of the reasons we’re all being so boring is because we’re focusing too narrowly on productivity. I don’t mean that we shouldn’t care about it. It is absolutely vital that we keep costs down and efficiency up. But we need to move beyond it. We need people who are truly excited by what we do - traders, operators, creators.
So I’m throwing out this challenge today. It’s time to show customers that we can turn them on, if we try. Right now, I don’t have all the answers but I do have loads of ideas and I’m in a great position to have a go - because I’m not a grey suit and I work for Asda, which has a history of being innovative.
One area where we really try hard - and where we’ve always done our best to stand out - is in our dealings with suppliers. We’re happy to deal with local suppliers, even if they can supply just one store.
We have a history of working hard at supplier relationships because we always thought that if we were good to our suppliers, they’d be good to us - and the customer would benefit. But it doesn’t seem to be working lately. We’ve gone out of our way to be nice, but we’re not getting much payback. Suppliers seem to treat us all the same. And that’s part of convergence.
It seems to me that suppliers simply don’t dare to establish points of difference between supermarkets any more. But what is the point of Asda being good to its suppliers if we get nothing in return? What is the point of me putting myself out for them when they don’t put themselves out for me?
This isn’t meant to be a threat to suppliers. Actually, it’s an invitation - an invitation to start changing, to start thinking about flair. Let’s work together and put the fun back into food. Let’s re-establish points of difference between Tesco, Sainsbury, Morrisons and Asda. None of us retailers can do it on our own. We need to work with our suppliers.
At Asda, we want to be at the forefront of the new flair movement. I’m asking suppliers to help us. Help us to implement with flair. Don’t be afraid to stand up to bully-boy tactics from other stores. Don’t be afraid to say that different companies will have different terms and different relationships. Don’t dumb down relationships so there’s no longer any point in working at them.
Remember that we’re all in this together - manufacturers and retailers. We have to stop giving customers what we think they want and start giving them what they really do want. In a world where consumer habits change at the drop of a hat, it’s the customer-centric businesses that are going to win out. So how many retailers have really sat back and thought about what’s happened to shopping habits over the past 10 years?
Consumers used to be split between those who were happy to overspend and those who focused on price. Now consumers are more savvy. They’re into smart value - brands that have style, quality and truly low prices.
We have to be prepared to take risks. You can’t always get it right first time and if you’re not prepared to get it wrong sometimes, there’s a big risk that you’ll never get it right. So let’s start really listening to what customers want. Let’s stop copying each other and start standing up for ourselves. Let’s put the passion back into our business.
The flair movement is starting right here, right now. Let’s make it happen. At Asda, we’re determined to do it. Are you?
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