Retail Roundup: P&G turns to Asda for YouTube advice; Asos faces brand backlash; Tesco PR offensive fails; and what Lidl will learn from £20m campaign
This week's retail update takes a look at Asda's Mum's Eye View channel and the results which have sparked interest from the likes of P&G, Unilever and Reckitt Benckiser; delves into reports that Asos' brand partners are dissatisfied with its discounting strategy; disects Tesco's PR offensive in the wake of reports that profits were overstated by £250m; analyses Lidl's £20m brand campaign; and looks at why online retailers must get their websites up to scratch to avoid losing customers to Amazon.
Asda's YouTube success sparks interest from FMCG giants
Asda’s YouTube channel – Mum’s Eye View – has exceeded all expectations with the retailer revealing that the likes of P&G, Unilever and Reckitt Benckiser are now eyeing up the commercial opportunities.
The channel soared past the two million views mark and attracted over 55,000 subscribers within just six months; by comparison the main Asda channel, which is nine years old, has struggled to reach a fraction of the subscribers – of which it has 1,877 – views and engagement Mum’s Eye View has achieved.
Dominic Burch, Asda’s senior director of marketing innovation and new revenue, admitted he “took a punt” on creating the channel and working with UK YouTube talent such as Pixiwoo, Zoella, and Tanya Burr.
But the gamble has paid off and with big hitters like P&G asking for a piece of the action it won’t be long before the financial rewards are reaped and the venture becomes a truly viable proposition.
However, currently there is only “anecdotal evidence” from user comments that content is driving traffic and sales online and in-store across the featured products.
Brands looking to get involved will also have to play by the rules set by Burch and the YouTubers he works with – which means handing over complete editorial control to the talent.
“We’re treading lightly in terms of the commercial partnerships as we don’t want to do something that’s clunky or makes the content less engaging,” Burch said.
Asos must tread carefully as retailers revolt
News of dissent in the Asos ranks this week has been overshadowed by the troubles surrounding Tesco. But reports that some brands are reconsidering contracts unless it revises its strategy of frequent promotions and heavy discounts is a threat that would be seriously damaging to Asos’ proposition.
The e-tailer works with over 850 brand partners, ranging from high-street retailers like Warehouse, River Island and French Connection to designer brands like House of Holland, DKNY and Dolce and Gabbana.
According to James McGregor from Retail Remedy, the threat of brands walking away is that no-one to be underestimated.
Reconsidering the strategy – which chief executive Nick Robertson has already described as a “blunt tool” - would also begin to help it move away from being known as a pure-play value retailer.
As Ian Humphris, founder and managing director at Life told The Drum – grocery retailers have trained consumers to be value led and if Asos similarly encourages those behaviours it will “become no better than a TK Maxx."
Tesco's PR offensive in wake of £250m deficit
And so to Tesco where news of a £250m profit error sent shares plummeting to an 11-year low and pushed four of its execs swiftly out of the back door.
In an opinion column for The Drum, 10 Yetis chief Andy Barr said Tesco was handling the considerable PR fallout with “style and class”.
“Announce an external investigation (tick), suspend some very senior people (tick) and reinforce that the new CEO has been parachuted in earlier than expected to try and steady the, not quite sinking, but very much keeling, ship (tick).”
Unfortunately, the latest trading figures from Kantar show that Tesco still has a mountain to climb as sales continued to sink another 4.5 per cent in the 12 weeks to 14 September.
Will Lidl's brand campaign work?
Last month, Lidl rolled out a £20m campaign in a bid to woo the Sainsbury’s shopper. At the centre of it was an ad showing people in a market tasting different foods and being surprised by the quality, the price, and of course, that it was from Lidl.
The tagline, #lidlsurprises, also encouraged people to take to social media to share their experiences of the brand the end of this campaign and marked the discount chain’s first push on social.
Paul Kitcatt, chief creative officer and co-founder of Kitcatt Nohr, analysed the campaign, scoured through the inevitable mocking tweets, and came to this conclusion.
“Lidl will have learnt a lot more about how its brand is viewed, but I predict the campaign won't have changed brand perceptions at all. The jokes will still all be much the same. Valuable information for Lidl to use in future, perhaps, to create communications in other, more effective media.”
78% of UK shoppers will turn to Amazon if preferred brand’s website is poor
Finally, new research from Digital River this week found that 78 per cent of British consumers would buy an item from Amazon if their preferred brand’s website was poor.
The research highlighted how vital is it for brands to not only allow consumers to buy directly from their website, but that the experience offered is clear, comprehensive and seamless across different touchpoints.
Several brands were named and shamed in the report.
“Nokia’s phone prices are always very inflated compared to other sites,” said one respondent while another stated that Black and Decker's site “is too busy and difficult to navigate” and Diesel’s seems to be “style over substance”.
Interestingly, the report also found that nearly half of all shoppers (49 per cent) expect to pay less when buying directly from a brand’s website compared to a rival or outlet – Asos brand partners may want to take note.