The Danish grocery market has for a long time been dominated by discounters who have sought to attract customers with a strong price profile while still promising quality, fresh food. In this market, the supermarket chain føtex found itself facing numerous challenges, including a decline in customer traffic, lower turnover and market shares under pressure.
These challenges called for the need of a strengthened brand position and a clearer, more distinct concept to stand out in the market.
Together with Kunde & Co, the føtex management team set out several clear aims: to formulate a reinforced positioning strategy, create a stronger and more consistent concept, to focus on the most valuable customer segments and build a coherent, integrated presence in the market space. The ambition was to regain the quality perception that had historically distinguished føtex in the grocery market, but which had been under severe pressure in the years following the financial crisis alongside the emergence of more reluctant consumers and fiercer competition.
A starting point of profound and relevant insights
When commencing the project, føtex already had a wealth of market reports and analyses. This material provided good general market insights, but lacked a deep understanding of customer attitudes towards føtex and how to improve.
To move føtex ahead of competition, it was clear that a better understanding of customers, their requirements and purchasing habits was necessary. Kunde & Co collaborated closely with føtex to conduct an extensive assessment to understand the point-of-departure and symptoms of the company’s current state as well as to recognise where to go.
The first step of the project involved pre-interviews with management, HQ employees and store staff from all over Denmark. Discussions and insights gathered in these interviews led to a number of hypotheses to be tested by consumers.
Internal and external concept test
The next step was to translate hypotheses into a testing framework including creative test material and a questionnaire. This included the development of a number of creative test material, comprising consumer trends, company descriptions, mission statements, values payoffs, concept directions and in-store design.
The concept test was conducted as an online survey among more than 3,000 consumers as well as more than 1,200 internal respondents across the entire organisation, from top management to store staff, to gain a thorough understanding of the current and future expectations of the company.
New customers with new demands
The test underlined that customer mind-set has changed dramatically. It has become more price-conscious, more reluctant and acts with greater care. This has put greater pressure on føtex to cater this mentality. The test also stressed a need to focus more exclusively on core customers that are the most valuable to føtex instead of approaching them with a general one-size fits all attitude. Interestingly, these core customers are shopping both in discount supermarkets as well as traditional supermarkets. Føtex therefore had to define how to offer value-for-money to these customers, who are not only driven by low prices but also demand quality groceries and an inspiring shopping experience. In addition, consumers in the aftermath of the financial crisis are more demanding when it comes to their expectations of how a modern responsible retailer should behave.
The test provided insights into which themes and specific groceries føtex should own in order to attract the most valuable customers. Here it was evident that fruit and vegetables, meat and bread are the most important categories to own in the market to drive a higher quality perception.
Back to basics
In the competitive battle against discounters, føtex had found themselves focusing intensively on low prices on low-quality products but with little success. The consumer test confirmed that this outlook proved dangerous. It had caused great confusion about føtex – who they are and what they want – resulting in a weakened position in the market. In the meantime, discounters have focused heavily on parameters that matter most to customers, with better quality meat, baked good, and more quality fresh fruit and vegetables.
Furthermore, the test made it clear that føtex had to go back to basics. Back to the heritage position føtex had been built on, but was left out in the price battle. Yet with real butchers in all stores, bread baked by its own bakers and trained fruit and vegetables personnel, føtex was already well-equipped to capture ownership of the most valuable shopping categories. This could allow it to focus on providing better quality, and leverage itself with highly-trained people and craftsmanship behind the products. Underlining this all would be a stronger focus on organic groceries and the Danish origin of relevant products.
A strong platform for the future
With the findings of the test analysed, the brand strategy and platform was formulated. With only three months before it had to be ready for approval by the executive team and presentation to the top 600 level, a stringent road map ensured an efficient development process. The overarching mission: Making good quality available to everyone in Denmark would be supported with six focus areas that are decisive for delivering on the mission. These should both ensure focus in the execution, but also be what the customers associate with føtex in the future.
Among these focus areas is the ambition to become the best within the fresh categories: meat, bread and fruit and vegetables. This has resulted in an upgrading of the assortment and development of strong category concepts that build on the most important customer drivers. Another focus area ensures that føtex remain the supermarket where customers understand that they can handle all their everyday shopping – thanks to good quality at attractive prices, and the wide range of everyday essentials and household items.
Focus on the core customers
Another important cornerstone of the brand strategy is the focus on core customers, both in terms of content and distribution. Based on a match between føtex offerings as a wide-range supermarket and the most valuable customers in the market, core customers were identified as families with children and couples aged 50+. This focus means all offers and marketing activities should be executed in line with these customers’ preferences. To strengthen the relationship to highly valuable customers, segment concepts were developed specifically to cater to their needs and interests. As a central category to the 50+ market, wine has been given its own universe where customers can explore a world of wine with relevant offers and online content. For families with new-borns and small children, a baby club concept demonstrates that føtex has everything they need for a good start in life.
After just four days, more than 18,000 members signed up to receive a weekly newsletter with relevant offers tailored the age of their child. Today, more than 50,000 have signed up in total - exceeding KPIs tremendously.
Efficient internal alignment for 12,000 employees
In order to ensure a common understanding and alignment of the new brand strategy and platform, a big-scale kick-off for føtex top-600 leaders was carried out by Kunde & Co. Here they got an introduction to the new strategy and through workshop exercises they were encouraged to provide input on how føtex should fulfil the strategy for instance with regards to the product assortment. Following the kick-off all føtex stores held individual min kick-offs where all 12,000 employees were presented to the strategy and with tools supporting them in how they should live brand in daily life in their contact with the customer.
A new effective marketing system
To create more customer awareness in a broad target group and generate more qualified store traffic, the marketing system has also been revised to increase efficiency in the marketing investment. Instead of relying largely on a printed leaflet with a very narrow market reach, more effective and segmented media channels have been applied. These are activated every week to ensure relevance in terms of season, top-of-mind and a constant push in the market.
Broadcast TV and print advertisement are the broadest marketing channels activated, to help manifest the brand position with offers and themes catering to core customers. When relevant, media is targeted towards specific markets, such as baby families, to ensure a clear presence with these customers. To further support business objectives, weekly offers are distributed on Facebook with a strong focus on the family and 50+ segments. Weekly newsletters to the føtex permission database supplement broad media with even more targeted offers and content, such as food recipes and other inspirational themes.
A clear conclusion from the consumer test was that føtex had to refresh its look. This included a revision of visual identity, such as the logo, which integrates a more organic appearance while respecting the heritage, but with a more contemporary feeling that balances recognition and renewal. This approach guided all revised communication and in-store elements, which today appear in clear alignment and reflect a more distinct quality profile. Kunde & Co has also developed the new visual layout for all stores, including navigation principles, which are continuously being refurbished.
With a well-defined strategy and successful internal kick-off in place, føtex and Kunde & Co co-operates closely on a daily basis to plan, develop and produce marketing activities across all platforms. These include an on-going development of campaigns and weekly advertisements.
Off to a successful start
The new brand platform of a revitalised føtex has ensured a clear profile in the market and a common strategy for all employees to execute, both centrally and within individual stores. In addition, results of the advertising tracking and brand positioning analyses underline that føtex is on the right track to being known for better quality, and is today perceived as the supermarket best in meat, bread and fruit and vegetables.