Era of transparency for retailers?

When Asda chief Andy Bond delivered a speech late last year stating the UK is entering a “new era of frugality”, he was ahead of the game and come January, shoppers were watching the pennies more than ever.

The trend to save is just one part of the new era of frugality. Shoppers are also being careful not to waste food, therefore making more frequent shopping trips, and ditching ready meals in favour of cooking from scratch.

Just one example of this trend is Sainsbury’s campaign to “Love your leftovers”. The grocer handed out leaflets in stores and posted ideas on its website showing shoppers how to make the best use of leftovers. And boss Justin King has said that the campaign formed a key part of its drive to give shoppers ideas on how to save money.

This week Bond delivered another powerful speech, heralding a “new era of democracy”. He said the recession has accelerated the trend for consumer power, and that consumers are shaping how retailers do business.

He pointed to the popularity of US president Barack Obama as an example. He said Obama’s election tagline “Yes we can” reverberates across the world as a symbol of this new era of consumer power.

As such, Bond believes retailers need to become more transparent in order to gain the trust of consumers. Such transparency will come from initiatives like Carphone Warehouse publishing all its customer complaints on its website and outdoor retailer Patagonia putting webcams in its factories.

Bond points to social networking sites such as Facebook and Twitter as enablers of this transparency.

Yet while Asda has launched initiatives such as SYMTV – a YouTube TV channel called Saving You Money TV – whereby customers post money-saving ideas, and Waitrose has launched its social networking chat site, overall grocers have been slow to pick up on online trends.

In the US, sites such as Twitter are massive. Tesco’s Fresh & Easy constantly tweets about new shops and deals and shoppers use the site to find out what is happening with their local retailers.

In order for retailers to be transparent, they should be prepared to open themselves up. While websites do tend to attract some random diatribes, the majority of customers will be happy that grocers are making the effort.