Are UK Supermarkets Conning Customers?
According to the press, the consumer watchdog Which? has been investigating the UK’s dominant supermarket chains for the last seven years. Based on the ‘findings’ Which? put forth a super-complaint against the supermarkets. A super-compliant is not something that is done lightly. So what is the basis of this super-complaint?
Despite Which? repeatedly exposing misleading and confusing pricing tactics, and calling for voluntary change by the retailers, these dodgy offers remain on numerous supermarket shelves.”
– Richard Lloyd, Which?
How Are The UK’s Supermarkets Conning Customers?
As I understand it, Which? is asserting (based on the evidence it has collected) that the UK’s dominant supermarkets are misleading customers through dishonest communication. Through which mechanisms is this dishonest communication occurring? Through “dodgy multi-buys, shrinking products and baffling sales offers”: the supermarkets are communicating / promoting illusory savings and fooling shoppers into choosing products they might not have bought if they knew the full facts.
What is the purpose of this dishonest-misleading communication and customer facing practices? As I understand the purpose is to keep existing customers and protect margins by conveying the illusion of a good deal – as opposed to providing a genuinely good deal. Does Which? have any examples? According to the Guardian:
Seasonal offers: higher prices only applied out of season, when consumers are less likely to buy the item. It found a Nestle Kit Kat Chunky Collection Giant Egg was advertised at £7.49 for 10 days in January this year at Ocado, then sold on offer at £5 for 51 days.
Was/now pricing: the use of a higher “was” price when the item has been available for longer at the lower price. Acacia honey and ginger hot cross buns at Waitrose were advertised at £1.50 for just 12 days this year before going on offer at “£1.12 was £1.50” for 26 days.
Multi-buys: prices are increased on multi-buy deals so that the saving is less than claimed. Asda increased the price of a Chicago Town Four Cheese Pizza two-pack from £1.50 to £2 last year and then offered a multi-buy deal at two for £3. A single pack went back to £1.50 when the “offer” ended.
Larger pack, better value: the price of individual items in the bigger pack are actually higher. Tesco sold four cans of Green Giant sweetcorn for £2 last year, but six cans were proportionately more expensive in its “special value” pack, priced at £3.56.
Are these crafty (the marketing folks will be saluting themselves for their ingenuity) yet dishonest business practices of any significance? Given that some 40% of supermarket sales are driven by sales promotions of this kind, it occurs to me that the answer is likely to be yes. Further, these are the practices that these chains are using to stave off the genuine price-value completion introduced in the supermarket sector by the likes of Aldi, and Lidl.
What Are The Customer Experience Implications?
At one level, it occurs to me that the key customer experience is rather simple: it is relatively easy to fool customers and keep fooling them over years through misleading communication, misleading pricing, and dishonest business practices. As I look into this, I find myself concluding that most customers, most of the time, are trusting of the folks they do business with. Why? Because in the absence of this trust, human lives become practically unlivable. The cost of being constantly vigilant is too high – those who can afford not to pay this cost choose not to pay it. These creates the space for businesses (supermarkets, utilities, banks…) to do that which they do do: take advantage of customers to extract ‘bad profits’.
What Is The Cost Of Addiction To These Dishonest Business Practices as Opposed To Focusing On Creating Genuine-Superior Value For Customers?
It occurs to me that the cost is paid over the longer term. Whilst the folks in your organisation are busy congratulating themselves on their ability to dupe your customers, or provide the bare minimum to keep customers, there is someone out there busy doing the work of coming up with compelling value propositions. Think back to the american automotive industry and the rise/dominance of the Japanese automakers. Think about Amazon and what it has done to retail. Think about Apple and the impact it has made. Think about First Direct ….. I say that the use of misleading communication and dishonest business practices is a form of subsidy to the least competitive players in an industry. From whom is the subsidy extracted? Customers.
Does an Organisation Get To Be And Keep Being A Customer Experience Leader Through Misleading Communication And Dishonest Business Practices?
Is USAA a CX leader because the folks in the business genuinely show up to do the best for their customers or because they have found slick ways of conning customers? Is Apple a CX leader because the folks in the business create great products that resonate with customers or because it has found a slick way of conning customers – perhaps through advertising and the outward veneer of its products?
I am clear that sustainable CX leadership requires straight communication and fair business practices in the context of going full out to simplify-enrich the lives of the folks impacted by the business: employees, customers, suppliers / partners….
You are welcome to disagree. If you find yourself in disagreement then I invite you to share your perspective by commenting. I am opening to learning that which I am not present to.