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How Woolworths lost its mojo

There was a time, those of us of a certain age will remember, when Woolworths was held up in marketing classes as a brand that had been built entirely on word of mouth.
But, on Wednesday, 1 February 2012, the Advertising Standards Authority (ASA) upheld a complaint by Frankie's regarding Woolworths plagiarism of its slogan and Woolworths, feeling that consumer sentiment was against it, announced that it would remove the product from its shelves.

The word of mouth has changed.

The way you build a word-of-mouth brand is to deliver a remarkable customer experience and hope that people would tell their friends and, if they had a similar experience, they would tell their friends in turn and so on until the market all agreed.

Used to take a lot of time


In those days, this took a lot of time because people could only maintain a relatively small network of connections and would only tell two or three or five or a dozen friends. Now, when the marginal cost of publishing is zero, in an instant the average connected consumer can publish to thousands of readers and reach millions in a few seconds. The word soon spreads

I was the client service and strategy director for Woolworths' early advertising agency when it crossed to "the dark side" and became an advertiser.

It did so because of the market's perception that quality, certainly in its clothing section, had declined. This was also the time when the Woolworths' food stores were still being set up. Advertising was the price Woolworths was paying for the reduction in standards and quality and the strap line "quality for life" was designed to turn that perception around.

Revealing



When the Frankie's story broke on Talk Radio 702 end of last year and spread like wildfire through the social networks, I could not help thinking how far from the word-of-mouth brand Woolworths had moved. Apart from the absolutely appalling manner in which it handled the social media firestorm, it was revealing in how it was defended by some.

In essence, the argument ran that, because all the big retailers behave this way, it should be expected. But in a connected world, a social world, you don't want to be like everyone else; you want to be remarkable, you want to be spoken about, you want people to share their experience with their friends. It's about the buzz you generate by the special experiences you deliver that grows your brand.

In the absence of any research to prove it, I suggest that the reaction on the internet and then in the market was so vocal, not only because this was the powerful corporate bully riding roughshod over an entrepreneur, but because Woolworths has taken a position of quality, integrity and doing good and its customers and fans felt cheated and let down when suddenly they could see a new truth.

Trust has already gone


Woolworths can paper this over and things will go on as they were but, as with the wife who was cheated upon and forgave, the trust has already gone and when something like this happens again, all hell will break loose.

click to enlarge
A more savvy Woolworths would not have waited for days before even responding to the accusations and then would not have done so in the defensive manner it did and, what is worse, would never have waited for the ASA ruling to force its hand before it would announce that it would remove the product from its shelves and do the right thing by Frankies.

I think that many people would have wanted to believe Woolworths and it would have been easy to see Frankies as an opportunistic startup with nothing to lose. Not now, though.

Ironic


The irony is that Woolworths were once one of the best in the world at generating the buzz it needed to be a standout brand. What happened with Frankies and how it handled the incident demonstrates something completely different. It demonstrates that it has lost the set of skills and attitudes it needs to be amazing and get buzz. It has joined the pack with the rest of the retailers.

If the price of a poor product and a poor customer experience is advertising, this is really good news for broadcast media owners - you should be getting a boost to your turnover.

Woolworths, you seriously need to look at how you curate your brand in the future; all the clues are in how you used to do it. The lesson is that you are no longer in control - your customers are.

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About Walter Pike

Walter has decades long experience in advertising, PR, digital marketing and social media both as a practitioner and as an academic. As a public speaker; Speaks on the future of advertising in the post - broadcast era. As an activist; works in an intersection of feminism & racism. He has devised an intervention in unpacking whiteness for white people As an educator; upskilling programs in marketing comms, advertising & social in South, West and East Africa. Social crisis management consultant & educator. Ideaorgy founder
Comment
Marius Smit
I must say it seems like Woolworths is to Bizcommunity what Graeme Smith is to Sport24.com.
Agreed, Woolworths might not have handled the situation all that well but its still a leading brand in SA - Look at the stats.
Posted on 2 Feb 2012 17:01
Gavin Hurling
The case in question is just another example of how big business perceive themselves to be. They are a bunch of bullies and crooks and I am a consumer with a conscience. So I will not be a regular at Woolies anymore.
Posted on 3 Feb 2012 00:06
Georg Knoke
Shame on you Woolies! It's easy to bully somebody like Frankie's and blatantly copy all,then being dragged to ASA-and losing!! Last year you've banned all Christian magazines-and this also backfired!!! Customers are NOT stupid,they cannot be bulldusted anymore. Who's accountable for these blunders in your Marketing and PR department? Where does the buck stop????
Posted on 3 Feb 2012 10:02
Arnold Pollak
It seems that there has been a change in the way Woolies thinks - moving away from market movers to Imperialists who WILL impose their will - just look at the manner in which they handled their old ad agency. Do they honestly think employees who stand to be fired if their idea's are rejected are going to push boundaries?. Possibly someone needs to remind the top brass that a brand fails from the top, and since some of their latest behavior has been unsavory, how long before that funnels down to their products.
Posted on 3 Feb 2012 11:33
Andre Redelinghuys
Let's not over react.. The Woolworths reality is not on the forums of Bizcommunity its in their shops and their proposition is still as relevant as a few months ago: good products, packaging, merchandising, shop experience.. Good principles and values etc. This is a topical issue which seems to get some commentators swept up in sentiment. Barring other incidents, in 6 months this will be forgotten. Make that 4.. They did the right thing a dropped the line, so the issue will fade.
Sent via my BlackBerry from Vodacom - let your email find you!
Posted on 3 Feb 2012 13:08
mario diplock
Andre, if you've ever dealt with ideas and concepts which your present to Companies in good faith and they turn around and steal your ideas and still act arrogantly thereafter, I doubt you'll call that over reacting. Woolies deserve all the bad press they get for this.

I'm not sure how you reconcile ripping off the little guy with good products and values. But anyway...
Posted on 3 Feb 2012 15:41
Steven Viviers
I feel sorry for Frankies (that they had to go through all this). I knew there was trouble when my wife refused to buy said drink at Woolies (as she is an advocate of theirs). But I also know Woolies and cannot imagine any other retailer in SA pulling the line. PnP, Checkers, Spar...are you kidding?
Posted on 3 Feb 2012 15:58
Andre Redelinghuys
Mario, I'm not addressing whether Woolworths or Frankies are right or wrong, I'm just saying that the commentary that Woolworths is headed into an abyss of poor morals and negative market sentiment is an overreaction, there's a bigger picture.

On the actual dispute i think there's a strong case for both parties. Frankies, the small guy, have developed an interesting proposition which may have been copied. But Woolworths could also say, 'old fashioned soda' is hardly a new or unique offering.. can anyone really own that? Chances are Frankies may have lifted their concept from another market.. or at least been inspired by something they saw.. Like i said, i feel for both parties - i just think it's ridiculous that people believe that all the goodwill toward Woolworths (pioneers in their category of sustainability, environment, healthiness etc) counts for nothing overnight.
Posted on 3 Feb 2012 16:58
phanuel motsepe
Full marks to Frankies, I had never heard about them.
Posted on 4 Feb 2012 09:48
Walter Pike
Andre It just has to be said. The industry body has ruled imitation all parties have accepted the ruling so there is not much left to say, this was imitation.

I am sorry a Marketing 101 student knows that brands don't live on shelves they live in the minds of customers.

The Woolworth's brand has been eroding for years and this is a milestone in this erosion it is interesting reading the comments how much of the protest has come from Woolworths fans.

I am sorry a Marketing 101 student knows that brands don't live on shelves they live in the minds of customers.

To think that the buzz has no significance is outdated legacy marketing thinking and naive.
Posted on 5 Feb 2012 07:32
Benon Czornij
Its plain and simple Woolworths is an example of a bad corporate citizen. The marketing message which they put out doesn't align with the way they conduct themselves. Telling us in their marketing that they believe in sustainable practices and the same time stealing ideas from small businesses just shows how disconnected their marketing is from the rest of the organization's culture.

If Woolworths really cared about sustainable practices they would actively help small businesses grow, instead of stealing their ideas.

A good corporate citizen would have made a public apology and admitted their wrong doing. Instead Woolworths only cited reason for pulling the product was the ASA ruling and public opinion.

Right now Woolworths is no different to our local politicians when they get caught with their hands in the cookie jar.
Posted on 6 Feb 2012 08:26
Andre Redelinghuys
Walter, Woolworths accepted the ruling, meaning they'll abide by it, but are adamant that they did not imitate.. but as I said before. My comment on the matter is not about whether they are wrong or right it's that I think people are overreacting. By that i don't mean that people shouldn't be angry - everyone's entitled to their opinion. Its just when people say things to the effect of "it's been a long time coming, Woolworths have no morals left and the market has fallen out of love with them"... come on.
I was in my local woolies last night... things looked pretty normal to me. I completely understand that a brand cannot afford to disregard customers’ sentiment etc. Marketing 101 was a favourite subject if mine.
My comment is really this: there are predictions of doom and gloom here for them and I completely disagree. I think it’s a case of a segment of society being hyper-focused on the issue thinking that all the attention (702 and Bizccommunity) indicates general market sentiment when in reality the majority of the market doesn’t know of the issue and many others don’t care.
Posted on 6 Feb 2012 11:40
Wally Cracknell
is it afact that Woolies are now the exclusive All Blacks sponsor?
Posted on 27 Nov 2012 17:52
Wally Cracknell
Woolies are nothing less than hipocrates when it comes to securing reliable suppliers
Posted on 27 Nov 2012 17:54

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