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Latest news from The Drum

Fixing retail: From robots to redesigns ​– what can be done to save Tesco, Asda and other supermarkets?
Posted on Wednesday May 27, 2015

The UK’s love-hate relationship with the supermarket began in earnest on 7 November 1964, when the first out-of-town superstore opened on the outskirts of Nottingham. American-owned GEM, offering everything from groceries to clothes and furniture under one roof, was like nothing British shoppers had seen before. As its local newspaper advert trumpeted: “This is shopping as you want it! Streamlined. Modern. Convenient.”

And Brits did want it. Some 30,000 people flocked to GEM on its opening day, according to the Nottingham Evening Post, prompting the paper to solemnly intone that “the store had to be closed several times to clear the mass of shoppers in the food hall through the pay-out counters. Some buses ran as much as an hour late”.

The GEM brand’s popularity would ultimately prove short-lived – the store’s lease was soon taken over by a new business – a certain Asda, no less – but its warehouse-style approach to retailing lives on in the endless aisles we trudge around today. In fact, ‘the big shop’ has changed remarkably little over those 50 years. The difference now is that the supermarket’s appeal is wearing off.

In April, Tesco crashed to the biggest loss in UK retail history. Its £6.4bn plunge prompted the Channel 4 News economics editor, Paul Mason, to call for Tesco and its counterparts to reinvent themselves. “To modern consumers the average supermarket – not just Tesco – can feel like a chilly, toothpaste-coloured, fluorescent-lit hell,” he wrote in the Guardian. As this magazine goes to press, Asda has just posted a 3.9 per cent sales drop at a time when it is supposed to be in the midst of a ‘turnaround strategy’. Like that other ubiquitous 1960s innovation – the tower block – the once futuristic supermarket does not appear to be ageing well.

So what can be done to fix it? As part of a new occasional series we’re running peering into the world 10 years from now, we asked a mix of design, digital and retail experts to imagine what the supermarket – if it still exists as we know it – will look like in 2025. Nathan Watts, design director at Fitch, believes the supermarket will still be around in some form in 10 years’ time – but it might not be humans doing the shopping.

“There are companies now developing single-item picking robots that can actually start to create what could be a kind of automated supermarket,” Watts says. “I might be able to pre-order some food on the way to the supermarket on my phone and then some robots are picking it so that when I get to the store it’s already pre-packed for me, and I might use the time I’m there to handpick fresh produce.

“There’s this idea that’s been put forward called bimodal shopping, where you can actually create a better experience for the fresh produce but automate the basic grocery aspects of your shop, to help that sense of convenience basically.”

Given that we’re already accustomed to a lemming-like march through the aisles, mindlessly throwing the same items into our trolleys time and time again, automating this drudgery might not be such a big leap for shoppers. Most of the people we spoke to felt some kind of ‘Spotification’ of the grocery shop was on the way.

Carl Engelmarc, general manager of Shopitize, says: “In 2025 there will still be some physical stores, although they’ll be focused on technology and convenience. Instead subscription shopping services will be much more prominent, gradually replacing the conventional transaction model. The signs are already there, click-and-collect is on the up, and brands are looking for new revenue models.”

As much of a grocery shop consists of a reordering of ‘staples’ and therefore a repetition of data – 2kg of potatoes, 12 eggs, a jar of coffee – this could easily be systemised by retailers, according to Amaze’s business director for commerce, Nik Rolfe. “They can then say ‘your shopping is in the van ready for your fortnightly delivery’; the only other thing they need to ask is ‘do you want us to change the quantities?’”

Rolfe says this service could be offered already, but supermarkets have got to work harder to win consumers’ loyalty first: “While many people would be prepared to give exclusivity to a single provider, they are only likely to do so if they are rewarded with loyalty pricing. Retailers need to do more than just use data for promotions; instead they need to make intelligent recommendations if they are to secure our custom.”

Assuming that people will still want to visit stores to pick up fresh produce, genuine rewards and intelligent recommendations should come into play there too. Jamie King, executive planning director at Live & Breathe, says: “Tech-driven experiences and individual context will play a crucial role in how tomorrow’s consumers relate to physical space, allowing retailers to offer real-time promotions and dynamic personalised promotions via consumers’ mobile or wearable devices – however these evolve.”

And the devices we carry with us will interact with the products we find on the shelves, according to Gillian Garside-Wight, packaging technology director at Sun Branding Solutions. “If you have specific dietary needs, these technologies can highlight which products are not suitable for you through a mobile app,” she says, a move that would save us the effort of having to labour over small print. Embedded ‘touch code’ technology within packaging could transmit other messages to shoppers’ devices too, Garside-Wright says, such as recipes they can make with the products.

Customers’ own technology might be more effective than supermarkets’ maddening self-scan checkouts with their heart-sinking queues. “The solution might be taking technology out,” suggests Lola Oyelayo, director of user experience at Head. “For example, queueing at the tills and self check- out areas can be one of the least enjoyable parts of the shopper journey. They could introduce on the move mobile payments, not with clunky devices but with your own device.”

What all this points to is a future supermarket – whether physical or digital – that is streamlined, modern and convenient. Just like in the good old days, this will be shopping as you want it.

This feature was first published in the 27 May issue of The Drum.

Good times roll for retailers as UK consumer confidence hits nine year high
Posted on Wednesday May 27, 2015

Consumer confidence in the UK is on the rise once more with the latest gauge of retail sector sentiment to be published by Nielsen showing that the proportion of shoppers believing now to be a good time to buy reaching its highest level in nine years.

The closely watched UK Consumer Confidence Index hit 97 in the first quarter, close to the crucial 100 mark marking the separation between optimism and pessimism with a higher number indicating a stronger positive feeling.

The survey found that this has fed through into lower saving with the number of people adjusting their spending habits to save cash reaching its second lowest point on record as the number of respondents believing the UK to still be in recession dropped for the eighth consecutive quarter.

Nielsen UK managing director Steve Smith, said: “Consumer confidence in the UK continues to rise. The UK is one of the fastest growing major economies, unemployment is falling and people are benefiting from zero inflation and lower prices in supermarkets and petrol stations.

“Whilst the majority of people are still cost-cutting – perhaps habitually now – wages, for others, are rising faster than household expenses. This is leading to more optimism about their future spending, so we expect to see confidence continue to rise in 2015.”

The figures were attained by assessing the attitudes of 30,000 consumers in 60 countries.

Boots BetaLab: Can the Boots brand really become known for tech and innovation?
Posted on Wednesday May 27, 2015

The traditional shopping experience is changing rapidly. AR, VR, touchscreens, immersive experiences and smartphones have all played their part in transforming the retail environment we once knew – and with it, shopper expectation.

The Post Office is using biometrics to better understand the pressure points for its consumers. Wagamama and Apple are looking to let you pay with your watch. It’s a brave new world.

There’s also a lot of hype as retailers rush to promote their latest technological offerings before they’ve really proved their usefulness. So it’s been interesting to note the relative lack of fuss made about a recent initiative by Boots, which points to some rather exciting possibilities for technology and retail.

The company has opened a new operation, Boots BetaLab, featuring a sizeable and entirely newly recruited team of technologists and tech product managers based in the heart of trendy digital Shoreditch. They’re charged with developing new products and services for one of the UK’s biggest retailers.

So what, you may say. Isn’t that what Boots has always done? Yes and no. Boots has always been an innovator, investing significant sums in new product development with great results down the years: Ibuprofen, E45, Soltan, Strepsils and No7 Protect & Perfect to name just a few.

But great product development of this sort is no longer enough. Boots has been savaged by commoditisation of healthcare and everyday beauty products, losing significant market share to supermarkets. Cheaper prices and the ultimate convenience of picking up the items as part of the weekly grocery shop have been hard to counteract.

Boots BetaLab sounds good, but will the retailer be able to make a difference or is it simply jumping on the digital bandwagon? One that Argos arguably started 12 months ago when it scrapped its iconic paper catalogue. Can the very traditional Boots brand really be known for technology and innovation?

Done right, it could be. Rather than trying to fight the supermarkets on their own turf, Boots is trying a different approach with BetaLab. In an age of the ‘measurable self’, people are interested in managing their health and wellbeing through technology. We’re starting to see apps, wearables and associated software to manage our wellbeing and Boots could be ahead of the game here.

That’s because around 18 million people carry its Advantage loyalty card, and they’re a lot more active than other loyalty card members so the data is richer. It also has a 70,000-person panel that answers questionnaires and tests products. Overlay this with biometric, transactional and health data, and the opportunities for new products and services start to appear.

The service area is particularly intriguing. With the NHS squeezed, some health authorities and CCG (clinical commissioning groups) are running campaigns to convince members of the public to go to pharmacists instead of GPs for minor ailments.

This opens the door for the development of innovative new services and products. Digital health coaching programmes, health apps and virtual health specialists are all on the cards. Boots is taking the fight away from commoditisation to create new revenue streams. Of course, some might wonder if the private sector should be making up for the funding cuts of the NHS, but at least this way the technology is being made available.

Will people pay for this more bespoke premium approach? Boots seems to think so, and with most of the UK within 10 minutes’ drive of a store, the opportunity to bring together physical retail and technology in a new and profitable way, could be huge.

The level of investment Boots is committing points to something more meaningful than a half-hearted piece of incremental innovation. But can an entirely new team, in a new office and a new location, really deliver something that is both valuable and true to the Boots brand?

Personally, I look forward to finding out.

Professor Leslie de Chernatony is a board director at LIFE Agency

Inviting the wrong people to the party: Real-time bidding and the pitfalls of audience buying
Posted on Wednesday May 27, 2015

Audience buying might be a key success story of RTB, but it can also be its potential downfall says Essence head of planning and mobile Erfan Djazmi.

It was my birthday last month and I decided to throw a party. So naturally I got hold of some demographic data, identified some people around my age and income bracket and invited them over. Sounds strange, doesn’t it? That’s because it’s something that no one in their right mind would do.

Network and holding company agencies are under scrutiny when it comes to transparency in real-time bidding (RTB). But there’s another dangerous trend that’s being overlooked in the programmatic process and it involves buying audiences, ignoring insights and, essentially, inviting the wrong type of people to interact brands.

The growth of RTB in media has brought with it efficiency, impact and control of advertising investment. But while audience buying is a key success story of RTB it can also be its potential downfall.

With programmatic worth over £1bn in the UK last year (according to the IAB), agencies and advertisers have rightly fast-tracked their RTB operations to try to keep pace. Simply buying ads against demographic data is the easy thing to do and that’s the thing lots of agencies are getting wrong.

Where many have blundered is by creating teams, functions, specialist agencies and separate business units such as trading desks that operate in silos. The risk is that RTB becomes an operational function as it automates media buying without any acknowledgement of consumer attitudinal insight. Essentially they’re forgetting about people in the whole process.

By being isolated, RTB teams are lacking the foundation of any great advertising campaign – proper planning. Whatever the channel, great advertising is based on great insight. As long as the trend for isolation continues, no one should expect anything great from the programmatic world.

How, then, do you avoid the pitfalls of treating RTB as a commodity buying method?

Firstly, integrating research, consumer insight and outputs from planning and strategy functions with RTB is key to ensuring that audience buys match the real world consumer. This may be challenging for silo functions, teams and specialist RTB agencies, but is critical to targeting the right audience with the right message at the right time.

Secondly, always focus on real people rather than demographics. Drill down into the audience segments and think about their real world behaviours and attitudes.

Finally, fuse attitudinal statements with automated buying. Panel based tools in the industry allow advertisers to understand consumer behaviour and attitudes. Without this, you’re essentially just taking a stab in the dark. And people don’t like being stabbed.

Today, the media landscape is overloaded with irrelevant, annoying and repetitive advertising. In response, consumers are empowered to block, skip or even pay to avoid advertising. The result is too many ads that have too little impact.

Only by combining insight with the automated tools available can we create communications that are more valuable. With this type of approach, programmatic can go some way to fulfilling its potential. And, next year, my birthday party should be a lot more fun.

FIFA marketing executives amongst those charged following dawn raid
Posted on Wednesday May 27, 2015

Several marketing executives are said to be amongst a number of top FIFA officials to be charged with corruption by Swiss police following a dawn raid on a luxury Swiss hotel.

Undercover officers stormed the five star Baur au Lac hotel in Zurich during a gathering of football’s governing body to collar individuals identified as having accepted bribes and kickbacks.

Four sports marketing executives from the America’s, named by the New York Times as Alejandro Burzaco, Aaron Davidson, Hugo Jinkis and Mariano Jinkis, are accused of paying in excess of $150m in bribes and kickbacks. Authorities also charged José Margulies as an intermediary who facilitated illegal payments.

They join nine other officials charged with racketeering, wire fraud and money laundering, identified by the NYT as Jeffrey Webb, Eugenio Figueredo, Jack Warner, Eduardo Li, Julio Rocha, Costas Takkas, Rafael Esquivel, José Maria Marin and Nicolás Leoz.

An unnamed law enforcement officer was quoted in the paper as saying: “We’re struck by just how long this went on for and how it touched nearly every part of what FIFA did. It just seemed to permeate every element of the federation and was just their way of doing business. It seems like this corruption was institutionalized.”

The swoop comes as embattled FIFA president Sepp Blatter seeks a fifth term as president of the body with an election scheduled for Friday.

Meet the Dadi Awards judges: Virgin Media's Rhona Bradshaw on making digital the brand's 'number one commercial channel'
Posted on Wednesday May 27, 2015

Continuing our series of interviews with the Dadi Awards judges, Virgin Media director of digital Rhona Bradshaw tells us about the media giant's journey to becoming digital first.

Digital may be a relatively new industry, but it still comes as a surprise to hear that Virgin Media's digital department has only existed in its current form since December 2013.

Before that, Rhona Bradshaw explains, digital was seen as "another channel to drive our marketing and sales agenda through, as opposed to it being a way of thinking".

Steadily, that mindset is changing. "Digital is part of pretty much all of the conversations [now]," says Bradshaw. "We’re hugely more mature than we were 18 months ago but we’re still on a journey of where we can be and we’ve got a five to six year plan that ultimately should see us have digital as being the number one commercial channel, where it’s the number one point of entry for customer care or sales."

Virgin Media's move to become a more digital-orientated organisation is a simple response to consumer demand, according to Bradshaw. "Digital allows us to be much more customer-centric and probably truly customer-centric because we know over 80 per cent of decisions and sales journeys begin online."

But satisfying customer demands – whenever, and wherever, they have them – is not without its challenges. "The minute you tell your customer you have a digital option they do assume it’s 24/7. So your management of their expectations becomes probably the most important thing that ultimately makes a great strategy. We’re certainly not a 24/7 company as of yet but that’s certainly the vision."

Bradshaw will join counterparts from Visa Europe, Bacardi and Sky Sports in judging the Dadi Awards in association with Workfront this year. So what is she hoping to see from the entrants?

"I’m hoping to see innovation in their ways of thinking, how they’re approaching problems, how they solve them. I’m looking forward to seeing how they take quite generic user behaviour and customer behaviour and translate it into how it’s appropriate for their world.

"I think I’m trying to see how other companies are approaching the digital-first agenda, and that 'customer-centricity' kind of role because it’s pretty much the buzzword of the moment and the way in which people are moving, but I think few companies have been able to make it work within their space."

The Dadis (The Drum awards for the digital industries), celebrates digital excellence, and are open for entries to agencies and clients throughout the UK until 5 June. See this year's judging panel in full.

For more details about the Dadi Awards in association with Workfront and sponsored by Shazam, and to enter, visit dadiawards.com.

27 May issue of The Drum – from iconic bottles to fixing retail
Posted on Wednesday May 27, 2015

BuzzFeed seeks applicants for new San Francisco bureau
Posted on Wednesday May 27, 2015

BuzzFeed has fleshed out its plans for a San Francisco based bureau for the development of new hardware and software for journalists, scheduled to become operational by late summer.

BuzzFeed Open Lab for Journalism, Technology and the Arts is a pet project for the fast growing global media brand as it seeks to cement its position with an increased outlay on research and development spend.

A staff of five are currently being sought to work in the lab targeting a diverse range of issues from drones, robots and sensors to AI, data science and machine learning. Crucially the fruits of the team’s labours will be open source ensuring all technologies developed will be public domain, for the benefit of the media industry as a whole.

Mat Honan, BuzzFeed News San Francisco Bureau Chief, said: “I came to BuzzFeed largely because I wanted to be in a place that embraced experimentation, where smart people were frantically pushing the boundaries of what is possible, and what is permissible. That’s what this lab is all about. We want to embrace fearlessness and the possibility of failure. We want to jump the fence. We want to see what else is out there. And then we want to bring the world with us. Come on. Let’s go.”

Greenpeace turns up the heat on Shell with latest attack ad
Posted on Wednesday May 27, 2015

Oil giant Shell remains the focus of attention for Greenpeace after the environmental organisation released the latest in a series of video attack ads critical of the businesses bid to drill for oil in the Arctic.

A song of oil, ice and fire depicts three idyllic landscapes before being burned away to reveal a dystopian landscape of charcoal and smoke, replete with drill machinery, oil spills and explosions.

Devised by creative agency Don’t Panic and montage artists Kennardphillips, the same pairing behind Greenpeace’s Save the Arctic campaign, the piece aims to illustrate the potential environmental effects of the industry.

Artist collective Kennardphillipps, explained: “We sorted through hundreds of photos of oil accidents. We have superimposed these real oil spills onto the American dream and the pristine icebergs of the Arctic.

“The poet Shelley wrote that as artists and writers, ‘we must imagine what we know’. We have tried to imagine through images what we know about oil exploitation. We must imagine what we know about Shell. We know that whatever the consequences to life, they are drilling for one thing – dollars.”

Artworks torched for the work include include ‘Pearblossom Highway’ by David Hockney, ‘Christina’s World’ by Andrew Wyeth and ‘An Arctic Summer: Boring Through the Pack in Melville Bay’ by William Bradford,

Danish radio presenter defends slaying rabbit live on-air
Posted on Wednesday May 27, 2015

A Danish radio presenter who achieved worldwide infamy after slaying a baby rabbit with a bicycle pump live on-air has attempted to justify his actions by saying it was an attempt to draw attention to the hypocrisy of animal rights campaigners who eat supermarket meat.

Asger Juhl, presenter of Radio24syv, was hosting a discussion on animal welfare when he rose from his chair and hit the nine-week old rabbit three times with a bicycle pump before wringing its neck and then making stew from the body.

The incident immediately drew outrage from listeners with some urging people to boycott the station in future.

Defending the stunt however Juhl told Sky News: “We wanted to raise a discussion about why animal welfare is an issue for some animals but not for other animals.

"In Denmark, at least, we have a very industrialised agricultural industry and a lot of these animals in this sector are not basically viewed as animals, they're machines delivering meat to our tables and we don't really care about their animal welfare.

"We have some animals that we have decided that we care about their animal welfare and that discrepancy we wanted to address. The rabbit is something you can eat, but also an animal we care a lot about. Why don't we care for a piglet, why don't we care for a small cow, or lamb?”

Commenting on the methodology behind the killing Juhl said he took advice from experts beforehand to minimise the animal’s suffering.