Sainsbury’s has said ‘new digital media channels’, namely Facebook and Twitter, will command an increasing share of its media spend as it moves forward on its £1.4bn merger with Argos.
The comments came in the grocer’s prospectus for the acquisition of the Home Retail Group, which was published today (5 July) where it explained that as the combined entity looks to engage new and existing customers, digital as well as its loyalty scheme Nectar will prove to be key channels.
“The Sainsbury’s Directors believe that new digital media channels will become increasingly important in the Sainsbury’s Group’s marketing and advertising strategy,” it said.
“Recognising the growth in the use of a wide variety of social media platforms like Facebook and Twitter, there is an increasing focus within the Sainsbury’s Group to build engagement with customers through these new platforms/media.”
It underpins Sainsbury’s ambition for its marketing efforts to be felt throughout the year. It’s customer-facing comms strategy has historically centred on the landmark Christmas campaign however the retailer is currently reviewing its creative account, potentially ending its near 40-year relationship with AMV BBDO, in an effort to shift to this ‘always-on’ mentality.
The second core pillar of its marketing function as Argos integrates into the business will be the Nectar loyalty scheme.
Over 15 million Nectar cardholders shopped at Sainsbury’s during the 52-week period to 12 March 2016, making it the main source of intelligence on how customers are shopping and interacting with it.
As it looks to entice Argos customers on to Nectar, not only will it deepen this pool of insight into shopping behaviour but will also expand its reach for direct communication.
During the 52-week period to 12 March 2016, Sainsbury’s sent approximately 50 million personalised mailings to Nectar cardholders, using their shopping preferences to offer vouchers and other special offers, a figure that will likely grow in the coming year.
"Sainsbury’s has identified a number of initiatives which are expected to create additional benefits that are not included in the Quantified Financial Benefits Statement, including [...] utilisation of the Sainsbury’s brand, marketing and loyalty database to increase Argos sales," it said.
While the prospectus emphasised that Argos and Sainsbury’s would continue to function as two separate entities – with both retaining their head offices in Milton Keynes and Coventry respectively – the leadership team will be comprised of both Argos and Sainsbury’s management (which includes marketing roles) and as a result there will be cuts made in the event of role duplication. Little more detail was given, with any redundancies will dependent on regulatory approval and a shareholder vote.
Despite the economic turmoil which has arisen from the UK’s decision to leave the European Union, chief executive Mike Coupe added that it “remains absolutely convinced by the strategic rational of the deal.
“We remain committed,” he said.