Monday, August 3, 2009

Why Social Media Isn’t The Answer For Coles

shopping 1 Via a Tweet from Gavin Heaton I read a post on Walter Adamson’s blog where Walter highlighted the volumes of negative feedback that Coles have received for announcing today that they intend to be more consumer led and embark on a massive reinvention of the brand.

Walter highlighted that on news.com.au that the article covering the announcement attracted 134 comments in 30 minutes -  1.3 comments per minute! All of them were negative. As at time of writing there were 353 comments (a quick scan shows that recent ones are also negative).

It is pretty clear that the readers who left comments don’t know jack shit. Half of them say that Coles and Woolworths jack up the prices and the other half say they lower the prices and drive out the smaller shops. Which is it?

A lot of the comments suggest going to the markets to get cheaper food and better quality. This advice shows a complete lack of understanding of anyone outside how they do things themselves. Let me get this right. To save myself $20 in a weekly shop I should buy the essentials at Coles, get them into the car and the take a 1 hour round trip to get meat and fruit n veg (which will probably cost me $5-10 in petrol). Would be worse if you threw a couple of kids into the equation. Think about the value proposition you heathens!

The sheer volume of negative comments has left Walter “… flabbergasted enough to say that it is going to take more than social media to fix this lot” and he believes that “In the meantime Aldi and Costco stand to make huge headway if they develop and deploy effective social media strategies.”

Whoah, back up there buddy. What?  Since when do a few comments on a news website make Coles’ strategy all about social media? Certainly nothing in the article suggest so.

This is what is wrong with marketing and social media today. Too many people think that social media IS marketing.

shopping 2 Lets unpack what Coles have decided to do. Assuming that what they are sprouting is true, and they will actually take a consumer led approach, then this approach is known as The Marketing Concept (or being consumer centric). I have gone over it before on this blog but essentially it is about creating the marketing mix and a value proposition that is built from the ground up to meet the consumer’s need or solve a problem. It shifts the focus from selling to marketing (and yes there is a difference tut tut).

However, none of this can be done without the first step – market research. How can you truly create an offering without first understanding what the consumer needs or wants?

Social media certainly has a part to play but anybody who thinks that social media will be the driving force behind Coles’ approach is delusional. Sure they can listen to, and engage with, consumers through social media but social media isn’t the strategy.

So I agree with Walter. It certainly will take more than social media but I am unsure how anyone could get the impression that Coles’ approach is social media driven. Additionally, if Aldi and Costco do have an opportunity to develop and deploy effective social media strategies then it won’t mean anything if they aren’t customer centric themselves and are focused on solving customers problems or needs. Social media is a tool and a tool that needs to be considered and then either used or not (but you must listen).

Walter also believes that “In any case, it's going to take just a little more than a brand makeover!” That’s right, I agree. Again however, where does anyone get the impression that Coles think that a brand makeover will do the trick? In fact they don’t. The foundation, once again, will be The re-invention of the brand will a by-product of being consumer led. to be consumer led.

Coles are saying that they want to listen more and the consumers certainly have plenty to say so there can be no excuses for not getting a customer led approach correct.

I personally think that it is great that Coles have gotten back to basics in a marketing sense and will attempt to put the customer in the centre of what they do. I will watch keenly.

5 comments:

Gavin.Heaton said...

Great post, Daniel. I am always surprised (though I shouldn't be) that people confuse social media with marketing. Perhaps it is because social media is flavour of the month.

While it was interesting that 300 or 400 people posted their opinions - how many actually go into Coles each day? I dare say 10 times that number use my local Coles.

Do you think any of them heard about this? Or care? Not me.

Daniel Oyston said...

Gavin, good point. I tried to work out what percentage 400 is of 22 million but my calculator started smoking … I think the answer was “not many”.

The problem with the comment section on sites like news.com.au is that the comments very rarely add to the conversation. Instead it just gives a voice to clowns who think that the space is perfect for them to tell people how it is. Quite often they just highlight how stupid they really are.

However, it is certainly a great starting point for Coles to hear what people think – at least the consumers are honest! But it should be those that don’t shop at Coles that they should be most concerned with. I shop at Coles and am not changing. I am in my routine. Sure they can make it better but I am not switching unless it degrades significantly. Their focus should be on attracting more customers (as well as getting more share of my wallet).

It will be interesting to see how they take the first steps and listen to consumers.

Matt Granfield said...

I'm right there with you Daniel. I think what Coles are doing is fantastic and hopefully it pays dividends for them. They can't own 'The Fresh Food People', so they need to carve a niche for themselves. I can't honestly see Aldi as a competitor, given their poor, sporadic range of bizarre shit. The negative comments on news.com.au serve only to bely the intelligence of a large portion of their readers.

On another note, I've been trying to subscribe to your blog for the better part of 2009 so as to not miss gems like this. What, pray tell, is the URL of your RSS feed?

Daniel Oyston said...

Thanks Matt. I agree. Aldi obviously has a good value proposition for a certain market segment but I don’t get it. I went there once, did a lap of the supermarket, got to the end, had three things in my trolly and looked at my wife and said “is that it?”

We left the trolly at the end of the aisle and headed for Coles.

RSS feed. I have just updated the buttons on the front left so try them otherwise I think it would be http://theoysterproject.blogspot.com/feeds/posts/default

Matt Moore said...

So while I agree that social software ain't marketing (they overlap a bit but neither is a subset of the other), the question I would ask is: what role can social software technologies & techniques play in what Joe Blundell wants to do at Coles?

There's an important issue here: Every business claims to be customer-centric, just as they claim to be sustainable & innovative. Yet many plainly are not - or are 'conflicted' in their attitudes to their customers ("they are people, no they are wallets, they are king, no they are our slaves"). We'll see what happens.

The role I can see social software playing is in making the customer experience at Coles richer for customers and more visible to decision-makers. But it will only be a small part of what Coles needs to do.