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Sainsbury's will rely on data

News, 07 May 2015

LONDON: Sainsbury's, the UK supermarket chain, is planning to make better use of data to communicate with its customers "in a fundamentally different way" its chief executive has said.

Mike Coupe was speaking as the company reported its first pre-tax loss in ten years, in large part due to a write-down in store value. Rival supermarket Tesco recently took a rather greater hit on such writedowns and announced it would cut the range of products on offer and get back to focusing on the consumer.

Sainsbury's is likewise intending to look at its customers and make greater use of the information it holds on them – Coupe claimed it "knows more about its customers than anyone else", thanks to its Nectar loyalty scheme and online shopping and financial service businesses.

That data can be used, for example, to decide "how we range shops and do a better job than competitors. At the other end of the spectrum we can use it to sell financial services, credit cards, loans.

"This customer knowledge is a great base to boost our business," he declared, and he anticipated it would also help better serve customers on an individual basis.

"We are moving towards communicating with customer on a personalised basis and interacting with them in a fundamentally different way," he stated.

One significant step in that direction will be the joining up of Sainsbury's online portfolio, where Coupe revealed customers struggled with 20 different sign-ons. "We want to focus the customer proposition through a single identity sign-on," he said.

Unlike Tesco, however, Sainsbury's has no plans to reduce the range of products on offer. "Time and time again customers tell us they can buy things in our shops that they can't buy elsewhere," Coupe said.

"One plays with one's ranges at one's peril," he added, citing the supermarket's FreeFrom range – free from wheat gluten and/or dairy – where some products "would be at the tail end" leading to discussions about cutting them.

"But they appeal to customers at the high end of the income spectrum who will usually spend more with us," he said, as well as offering a point of differentiation.

Data sourced from Marketing Week, The Drum; additional content by Warc staff