ASDA launches transparency strategy

In October 2009, the chief executive of the ASDA supermarket chain announced a radical new commitment to transparency at the company. “Customers want transparency around how we do our business,” said Andy Bond. “They are interested in understanding what factory conditions are like and what our stores are like behind the scenes. They’re interested to make sure that we operate in an ethical manner.”

According to Dominic Burch, ASDA’s head of corporate communications and new media, the strategy follows extensive customer research that found growing suspicion among consumers of all public bodies – the government, the media, big business.

Supermarkets still rank fairly highly for trust, says Burch, “but the long-term future is that people are going to trust us less”.

This effect has been exacerbated by the social media revolution. “It allows people to rely more on other people like themselves for opinions and discussion,” he says. “We found that our target customers – mums – spend 47% of their leisure time browsing on the Internet.”

The combined effect on the way businesses interact with customers is dramatic. “The days of making big bold claims and expecting everyone to take your word for it may not be over, but they are numbered,” says Burch.

Since Bond’s announcement, ASDA has installed webcams in a small number of its locations (including offices and farms), and a number of buyers within the organisation have begun blogs. These measures are ‘symbolic’ of where ASDA wants to take transparency, but already they have had an impact.

When ASDA announced that it would sell the latest Dan Brown thriller for just £5, a number of customers were disappointed to learn that stores had run out of copies. “Previously, we would have just seen a lot of customers complaining about this on the social networking sites,” says Burch.

But ASDA’s book buyer explained on her blog how she had bought 50,000 copies of the book to sell at the discounted rate, and 50,000 to sell at the normal price. So popular had the £5 offer been, however, that she decided to let them all go at that price. This revelation diffused what might otherwise have been a public embarrassment, with one visitor to the blog saying that it had eased “suspicious minds”.

The most exciting element of its social media play, says Burch, is the ability for customers to contribute. “A lot of our customers want to be engaged with how we do business, and we want to overtly insert customers into how we do things.

“For example, if you are the employee responsible for buying next year’s Christmas baubles, you can show people on your blog or via Twitter the kind of decisions you have to make. This is not handing control over to the customer, but involving them in the process.”

Burch expects ASDA’s transparency strategy to have two outcomes. The first, he says, is customer loyalty. “Our view is that loyalty comes from having trust,” he says. “By lifting the lid on how we doing things, we believe we will encourage loyalty.”

The second is that it will encourage ASDA employees to do the right thing. “With transparency comes responsibility,” he says, “but it drives the right kind of behaviour.”

This story accompanies the following feature

The open enterprise

Social and technological change is forcing business to become more transparent

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media (now Bonhill Group plc) from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The...

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