Waitrose has increased its market share, grown sales per sq ft and built customer loyalty through the strategic use of advertising and design creativity.
Waitrose combines the convenience of a modern supermarket with the expertise of a specialist retailer. Its philosophy is clear: good food doesn’t necessarily cost less, it costs what it costs for a very good reason. This underpins the store chain’s discreet market positioning in the highly competitive retail sector – at the premium end of a spectrum polarised between price players, such as Asda, and quality-focused brands.
Nb. Since this case study was first written, Waitrose has undergone considerable growth with more than 250 regular stores. It has also created a smaller, convenience store version - Little Waitrose - mainly in London, which it plans to expand further afield on high streets and through Shell petrol stations.
Until the late 90s, advertising was not high on Waitrose’s agenda. The company was comparatively quiet about its price offers and in-store promotions for many years. And design, while an important aspect of in-store presentation, was a support service for the product buying team rather than a dedicated department. Brand communications moved centre stage in 1997, however, when Waitrose realised it had to respond to the increasingly aggressive price positioning of its rivals and Tesco’s advance on Sainsbury’s. It also needed to address the fact that amongst the country’s leading supermarkets it had the largest proportion of ‘secondary shoppers’ – customers who shopped elsewhere primarily and at Waitrose occasionally.
Waitrose’s first national brand awareness campaign launched in June 1998. Since then, advertising and design have worked together to refresh and strengthen the Waitrose brand.
This brand communications strategy has converted Waitrose from an organisation once cautious about self-promotion to one whose approach has motivated its workforce and suppliers, won creative accolades and delivered a tangible benefit to the bottom line (see panel).
Waitrose has a highly regarded relationship with its suppliers. As the owners and managers of their own farm, they have real understanding of food production.
A unique culture
When it comes to brand communications, there are two striking aspects to Waitrose’s recent history. The first is that until 1997 no marketing department existed. Waitrose’s long-standing emphasis on product quality was accompanied by a reluctance to be seen to compromise this through overt product promotion. Past advertising had been small scale and ad hoc. In contrast, design has long played an important role in the business as a primary form of brand communication.
The second is co-ownership. As part of the John Lewis Partnership Waitrose isn’t owned by shareholders but everyone who works for it – workers are called ‘Partners’ rather than staff – and this, too, has had a marked impact on branding.
As each year Partners share the profits that would normally go to shareholders, worker involvement with business objectives is higher than in many organisations. Partners also have a say on significant decisions relating to the future of the business. While strategic decision-making – such as which ad or design should be used – is done by the management team, the business informs its Partners of all key decisions and seeks their buy-in before full implementation.
Another feature worth noting is that Partners tend to stay with the business for a long time so reinforcing a ‘continuity culture’ that extends to Waitrose’s relationships with external advertising and design agencies.
In the light of this, any increased emphasis on marketing – particularly advertising – had to win over not just consumers but Waitrose’s advertising-wary, yet highly motivated, workforce.
Evolution, not revolution
Waitrose’s decision to establish a fully integrated marketing department was more a refocusing to enhance what it was already doing than a ‘Damascene conversion’, according to Head of Press & PR Christian Cull. Nevertheless, the decision to place greater emphasis on advertising and promotion, and subsequent moves to more closely integrate creative themes had to first gain the support and understanding of Waitrose’s 28,000 Partners.
NB. For those unfamiliar with the phrase, a Damascene conversion is a sudden and complete change in belief. (It is derived from Saint Paul's conversion to Christianity while on the road to Damascus.)
Over an intensive six month period in 1997, Waitrose created a new role – Head of Graphic Design – with the appointment of Maggie Hodgetts. It appointed Banks Hoggins O’Shea FCB to develop a brand communications strategy. And it appointed its first marketing director, Mark Price, who introduced a marketing structure to the business. Price began his career at the John Lewis partnership in 1982 as a graduate trainee. Himself the son of a grocer, he was promoted to Managing Director of Waitrose in 2007.
Nb. As proof of their Partners' commitment, Maggie still holds this position almost 15 years later (the time of re-posting this case study to our website) during which time Waitrose has garnered many more D&AD awards.
A marketing department was established with brand managers and in-house designers working side by side. Amanda Bindon was appointed Head of Marketing. A pre-existing structure ensured direct involvement of senior managers in creative decision-making through a system of fortnightly meetings between designers, Head of Graphic Design, product range buyers and the Director of Buying.
Quarterly and half-yearly meetings, meanwhile, included more senior management.
Cross-disciplinary creative focus
From day one Hodgetts oversaw both graphic design across all product packaging and point of sale promotional materials and the visual aspects of Waitrose’s evolving advertising strategy. This was to ensure a more consistent style and tone across all communications.
But against this goal she had to balance Waitrose’s long-standing fear of ending up with too regimented a ‘house style’.
With only a six-strong in-house design team Waitrose outsources 60-70% of its packaging design and chooses to work with a number of different design consultancies. It has worked recently with Interbrand on its Perfectly Balanced and Food Explorers sub-brands, for example.
“We tend to go with gut feeling and instinct: we are not slaves to research”
“We try not to define too many parameters and take things on a specific project by project basis,” Hodgetts explains. “We tend to go with gut feeling and instinct: we are not slaves to research. We like to work with new designers to get fresh inspiration and take a few risks. But we also like to work with others who we know and know us – when quick results are needed.”
When it came to advertising communicating quality, value and consistency was key and Waitrose sought a single agency able to become a creative partner with the business over the long-term. “There’s a huge value in consistency,” Cull believes. “All too often people in advertising are obsessed with moving on. In our opinion, effectiveness comes from a brand communications strategy that’s carefully nurtured over a long period of time.”
Nb. Banks Hoggins O'Shea - the agency they hired back in 1997 - no longer exists, however Ken Hoggins joined BBH in the summer of 2011 to oversee the Waitrose account, a client he has served for two decades.
The first public articulation of the new brand strategy came with the launch of the first advertising created by Ken Hoggins and Chris O’Shea of BHOFCB in June 1998. Target audience for the advertising was secondary shoppers, typically mothers or fathers of young families, aged around 35, and living in the south east. The aim was to reinforce and ringfence Waitrose’s position in the market.
The campaign set out to redefine ‘value’ as the balance between quality and price, not merely low prices, BHOFCB account director Mark Wilson explains. “Retail advertising usually breaks down into one of two styles: tactical-price messages, or more strategic quality messages,” he says. “Yet a price-led campaign can weaken the brand message, and a strategic quality-led campaign can dilute price promotion. BHOFCB developed a creative solution telling stories about individual products – provenance, suppliers, and so on. Crucially, in every execution, this was juxtaposed with a subtle price tag to underline Waitrose’s unique definition of ‘value’. Unusually, the ads never showed the actual product.”
Phase one involved a national, press-led campaign which ran from June 1998. Once the press strategy proved successful, BHOFCB worked with Waitrose to extend the creative theme in-store with shelf barkers, tent cards, posters, and ads in Waitrose publications Seasons, Selections and Waitrose Food Illustrated. Meanwhile print ads directed consumers to a web site where they could find out more detail about products.
The third phase of this strategy came with a move onto TV in 2001. Three commercials – ‘Cod’, ‘Wine’ and ‘Milk’ launched in May 2001 followed by a further two in the autumn.
These followed the tone and style established by the print ads. The campaign was fully integrated in two important ways, Cull says: “First, running each product campaign successfully required the operational integration of the marketing, buying, selling and merchandise departments of Waitrose as well as the advertising and media agencies. Second, all media used was closely integrated around each product.”
The desire to more closely integrate creative themes within its brand communications was one of the reasons Waitrose has revamped its corporate identity, with the introduction of a new typeface and colours, and in-store graphics.
Following a review of older outlets, interiors are being given a fresh style and tone. Greater use of photography was introduced, and design features developed to tell the ‘story’ of certain product lines underlining the advertising message about the longevity and uniqueness of Waitrose’s supplier relationships.
At the same time, the business has developed a new approach to in-store promotions. Previously it ran far fewer than other retailers and set itself apart from competitors by its lack of in-store promotional clutter. Hodgetts and her team looked at ways of communicating offers without creating clutter. BHOFCB developed a range of door drop materials for use in the catchment areas of certain stores.
Meanwhile, Waitrose started to amass customer data via in-store promotions and online shopping to better identify shopping patterns amongst different consumer groups.
Earlier this year it recently appointed data insight specialists SPSS to better analyse consumer trends to improve return on investment on its marketing and drive foot-fall to stores. And it is now considering the potential for highly targeted direct mail and e-marketing.
Convincing the money men
The success of all this has been three-fold.
First, Waitrose’s Partners – particularly those working in-store – have welcomed the new brand strategy which they feel to be perfectly in tune with the business’ traditional product focus.
Second, Waitrose’s advertising and design work has been well-received within creative circles. Both packaging – for a range of carbonated drinks, designed by Carter Wong Tomlin – and latest press advertising by BHOFCB – featured in the D&AD Annual in 2003. Waitrose and BHOFCB also won an 2002 IPA Effectiveness Award. And last, but by no means least: it has produced tangible business benefits.
Unusually, both Waitrose’s marketing and financial departments take a lead role in evaluating the impact of the new focus on marketing. As a result, advertising spend is judged against two investment areas – ‘capital expenditure on estate’ and ‘systems investment’. Financial department analysis showed advertising soon established itself as an important investment category for Waitrose, ranked in importance alongside systems investment and brand expansion.
- Waitrose’s market share has grown from 3.17% to 3.7% against tough competition from the ‘big four’ supermarket chains
- Its share of voice grew too, from 1.6% in 1998 to 2.7% in 2000 (Source: MMS)
- Advertising improved perceptions of Waitrose’s competitive pricing, close working relationships with suppliers, and careful selection of food
- The new emphasis on brand communication was also widely regarded internally as an endorsement of Waitrose’s respect for its suppliers