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Sainsbury’s has to differentiate on experience rather than price due to rise of discounters, says customer experience boss

The rise of discount supermarkets such as Aldi and new entrants has driven more premium brands such as Sainsbury’s to focus on brand experience, the boss of Sainsbury’s customer experience design has said.

Muscutt: Consumer desire for cheapest prices has meant "Sainsbury's has had to look outside the 'big four' grocery store competitive set"

Muscutt: Consumer desire for cheapest prices has meant “Sainsbury’s has had to look outside the ‘big four’ grocery store competitive set”

Speaking at Mumbrella’s Retail Marketing Summit in Sydney, Clare Muscutt, head of customer experience design at Sainsbury’s,said the rise of discounters has seen customers trade down in search of cheaper prices, meaning Sainsbury’s has had to look outside the “big four” grocery store competitive set.

“In recent times these discounters have appeared in the UK market. I’ve seen Aldi in Australia now. What we have seen is customers trading down to have what they perceive to be great quality for a low price,” she said.

“The discounters have done a great job at marketing their brands in the UK.”

Muscutt said the rise of the discounters led Sainsbury’s to reconsider its value equation.

“In a commoditised  market place there’s a bigger opportunity – great experience. Given we can’t just compete on some of the prices the discounters offer, this is something that is absolutely fundamental to Sainsbury’s being able to stay ahead and keep a competitive advantage,” she said.

“And then there’s this multiplier that we call ‘brand warmth’. If you’ve got great prices and quality, you’re delivering a great experience, you can multiply that by how customers feel about our brand.”

Muscutt told Retail Marketing guests that Sainsbury’s competitors were no longer just the big four supermarket brands now that digital and mobile had changed the landscape.

clare-muscutt-head-of-cx-design-sainsburys-retail-mktg-summit-2017

Muscutt: “There’s this multiplier that we call ‘brand warmth’. If you’ve got great prices and quality, you’re delivering a great experience, you can multiply that by how customers feel about our brand”

“What used to be true was you’d think about going shopping and you’d just go to the shops and get what you want, but because of digital – particularly mobile – now the whole world is accessible right in your hand,” she said.

“For retailers that means the competition is much greater than ever and isn’t necessarily just the big four anymore.”

Muscutt said retail brands need “to change the way [they] talk to customers and change the experience in order to meet their needs”.

“The big question for us is how we are going to make sure we’re in the right places with our digital ecosystem and are ahead of consumer technology trends so we can tap into the way the consumer is shopping in the future.”

Muscutt told the room her number one tip was to “take a customer-led approach” when considering redesigning customer experience.

“That is essentially what customer experience is – it’s thinking about the customer at the centre of whatever you’re doing and being able to build a proposition around them and then thinking about the commercial constraints and what you need to do because you can’t afford to deliver that capability, but starting with the most aspirational view of what the customer wants.”

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