When retailers start using phrases like “world firsts”, “revolutionary” and (this one especially) “game changing”, the exaggeration alert sounds loudly in the minds of seasoned industry watchers.
There will, therefore, be plenty of wisened figures not getting too carried away with the nationwide launch of Waitrose’s ’Pick Your Own Offers’ scheme yesterday.
Despite the flurry of headlines, it’s worth remembering that when The Grocer first broke the news of this plan more than a month ago, most of the media (and you could argue most Waitrose shoppers), were far more concerned about a proposed crackdown on Waitrose’s free coffee offer.
However, like the coffee reward, the new scheme has got people talking. Not about the 1,000 products that Waitrose has unveiled, from which customers can pick their shortlist of discounts. They’re not talking about the fact that, of all the available products, the people of the North West (who were the first to trial the offer), chose packets of loo roll.
No, the tantalising thing is what this list could look like in six months, or even five years, time.
Waitrose MD Mark Price is spot on when he suggests most consumers (not to mention suppliers) are sick of bog standard promotions (no loo roll reference intended) which the public don’t really trust, and which risk brand loyalty heading down the drain.
The alert may have sounded again when Price suggested that all suppliers “bit his hand off” to take part in the Pick Your Own offer, especially as it seems they will have to pay a large part of the estimated £5m a week it will cost to run. Neither will suppliers be too encouraged by his admission that “we could be talking telephone numbers”, especially if the hoped for sales spike doesn’t materialise.
But many will see this is a breath of fresh air in the battle over price and promotions, a battle which has seen the discounters wipe the floor with the major supermarkets.
A three-year analysis by Nielsen of 212 million promotions in multiple retailers in the West showed that UK brand owners were among the biggest losers, with brands in the US faring even worse.
Against that dire backdrop, it’s no wonder that suppliers have, for years, been urging supermarkets to be more imaginative. If Price is to be believed, and this new offer is just the first step of a move to give the power in promotions to the people, then it could be a ‘game changer’ after all.
He predicts that far more than the current 1,000 lines will become part of the deal, and forecasts that suppliers will even be able to choose the level of discount.
If that notion takes off among Waitrose customers and, even more interestingly, if others are tempted to follow suit, the new promotions “democracy” could really take on a life of its own.
Price pointed out that retailers have long searched for the Holy Grail of providing personalised offers and matching them with the scale to make the reductions involved worthwhile.
This is where the scheme could run into trouble. The wider the range of brands and own label extends, the less guaranteed the volume spike for each brand will be. Thus, the more potential losers as well as winners there will be out there.
Yet for an industry which has been crying out for ways to increase loyalty and to give brands a chance to stand up and be counted beyond the promotions treadmill, the scheme deserves supplier support, even if Price’s arm remains in place for now.