Drakes goes it alone to take the fight to Coles and Woolies

Drakes Supermarket is finally in control of its own marketing for the first time, and it is having a lot of fun with it. 

Earlier this year, the family-owned independent supermarket split with wholesaler, Metcash, part of the Foodland group, and opened its own $125 million automated distribution centre in Adelaide, in a move to potentially supply other independent supermarkets in the future.

Drakes was Metcash’s largest supermarket wholesaler, turning over $1 billion annual across SA and Queensland, and until now, accounted for approximately 3.5 per cent of Metcash’s food and grocery sales, Drakes said in a statement. The loss of Drakes from the Metcash/Foodland Group is reportedly expected to cost the group about $270 million in sales and $16 million in earnings.

Drakes Supermarkets is proudly family owned and operated, with 38 stores across South Australia and a further 23 stores in Queensland. Over the last 45 years, it has become Australia’s largest independent grocery group and employ over 6000 people, and it is this platform it's now choosing to stand.       

In addition to finally having the freedom to set its own pricing and compete with the larger players like Coles and Woolworths, Drakes Supermarket also now has control over its positioning and marketing, and is concentrating on being honest, authentic and transparent. Director, JP Drake, said the business is enjoying having full autonomy over messaging to consumers, as well as not being treated like a small family deli by a large conglomerate.

“When we split from Foodland Group, it gave us the full autonomy to stop being treated like a small deli or a top-up store, which is how we were being positioned. For us, once we left, the Drakes offering became very clear for consumers,” he told CMO.

“The majority of our stores go head-to-head with Coles and Woolies every day, and we can now target a larger basket size. The week we left the Foodland Group our basket grew by 7 per cent, which caught us a little off guard, and sales grew 15 per cent.”

Brand platform

Drakes' new brand tagline is ‘Ingredients for every day’, a big part of the marketing strategy it developed when it left the group. It had an advantage, having left the IGA banner group in Queensland two years ago, and in that process picked up market share through its positioning. So, as Drake explained, it had some practice in what might work.

“We want to target bigger baskets and get our branding right because, for the first time ever, we’ve been able to control our whole marketing strategy. In the past had to abide by the Foodland Group promotional guidelines, and what IGA wanted, and we couldn’t clash with these. We can now, and it’s a very good feeling,” Drake said.

Drakes also undertook a focus group prior to the split across shoppers from Coles, Woolies, Drakes and IGA. It found shoppers were going to all stores but using Drakes as a top up, with Coles and Woolies their main shop.

In order to pick up a larger basket size and take it to the big players, Drakes is differentiating itself as family-owned and customer-centric, but also as a supermarket that has all the brands shoppers expect from the corporate-owned stores.

“We are 100 per cent Australian family-owned, and no one can come at us on that. So we are positioning ourselves on this by emotionally connecting with our consumers and showing them what we offer," Drake said. "All of our people in our new TV commercials are our staff. We are real people connecting with real people, and we are integrating this across multiple platforms.

“We could never advertise on TV as Drakes before, so TV is a big platform us now. We are also doing a bigger catalogue, EDMs, social media, LinkedIn, radio, out-of-home, trams, and an app. Across all these platforms we are telling the real story of what’s going on, and why we left the Foodland Group. We are being really honest and transparent about it, and this is what we found customers want – for us to connect with them in a real way, and to say what we mean.

“We are using Google Analytics, and increasing personalisation because customers want real personalisation."

Drake saw Petbarn doing a great job at this, and a brand Drakes is learning from. "We don’t have huge budgets like our competitors, we do it on a shoestring, but we are getting great engagement," he continued. 

“We want our customers to keep coming back. We plan to penetrate the market by being authentic, transparent, and honest. We want to get out there and tell customers what we are doing and then actually do it."

For example, when sales went up 15 per cent and Drakes was caught without stock at its new centre, Drake made an apology video taking full responsibility for it.

"That resonated with 98 per cent of our customers. It’s about showing we mean what we say," he said. 

“We’ve never been able to control all this before – we couldn’t undercut other catalogues, or put an ad on TV. Now, we have a catalogue going out to 800,000 people per week, and for the first time ever we’ve been able to control the whole process."

Drake saw the biggest change being TV commercials, which he said has been the most effective base to reach customers in Adelaide. "We’ve also done some app geotargeting, with quite high levels of engagements. I do a retail wrap on LinkedIn as well, where I just talk direct to people.

“There was also a lot of mixed messaged from the opposition about our new warehouse. So we’ve been communicating about the warehouse on social, and just taking the message directly out to consumers.”

Building data-driven authenticity

It is this authenticity that is really resonating with its consumers, Drake said. He claimed many consumers are tired of the bigger players, which is why Drakes is concentrating on providing actual value to customers and making sure every decision it makes is customer-centric.  

“We have a database of customers and asked them what they wanted in an app, and this is being released soon,” Drake said.   

“We do have lots of data on customers, but none of it is specific. It’s fair to say we haven’t used that data for the benefit of the customer yet, and we want to use it to be customer-driven in the future, so we’re going to be delving into that in 2020.

“What our competitors are doing is not affecting what we are doing, or our direction. We are concentrating on being ourselves and being authentic. We’re focusing on core values and expanding them, but they have to be customer-driven. In the past that’s not been the case. For example, competitors catalogues are generated to make money, and are not in the best interests of the customer, and we want to change that. We feel we’ll win the long game by showing our true colours.” 

In addition, Drakes has a range of 34,000 products in stores, which Drake said was a bigger range than most supermarkets.

“Now we have built the warehouse, and opened new supermarkets. In terms of expansion, we want to get the warehouse running smoothly first and then look to the future,” he said. 

“As long as we keep the customer happy, that’s the main focus. In the future, we will be testing at individual stores in terms of how they are set up, and marketing, and seeing how the customer responds. We are excited to be trying new things. In every direction we take, we try and exceed the expectations of customers.”

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