Monday, February 17, 2014

We're Co-operative Owners, Not Marks

The Weaver Street Market Co-operative employee Market Messenger this past week offers more disheartening evidence that some on the WSM corporate office management team would prefer to forget that we are a co-op. It inspired a letter from me to the WSM Merchandising Manager, James Watts, which letter I think is self-explanatory.

I will continue to attempt to stem the tide, with about as much luck, I dare say, as we are having in the US and the UK avoiding the consequences of the weather. But where stemming does not work, I will at least continue to bear witness:

"Dear James,

The front page of the employee ‘Market Messenger’ this past week has an article headlined “Have you noticed some new things happening with our Marketing and Merchandising Programs?” The article invites we workers to offer theories for what is working and what is not. I accept the invitation.

So. Yes, I have noticed. And what is happening is likely not a very effective use of resources. And most certainly is in contravention of our purpose as a co-operative.

On the face of it, you seem merely to be announcing changes in the style of leaflets on offer. But it is more than that.

Your article is peppered with phrases like making offers ‘more exciting to owners,’ ‘what motivates our customers,’ ‘product promotions that will bring in new shoppers, or motivate extra purchasing from our established customers.’

James, that is the language of conventional grocery stores, which employ all sorts of expensive marketing gimmickry to entice punters to buy goods they likely would not otherwise buy.

That is not the purpose of a co-operative grocery store. And we shouldn’t be doing it. More than that, we don’t need to.

Co-operatives exist to provide for the common needs of our owners. That is not merely an idealistic slogan. It is the essence of our business model.

We have 18,000 local owners. If you want to know what they want to buy, don’t sit in a remote Hillsborough office scanning impersonal sales figures, don’t play mind games, don’t experiment, don’t motivate, don’t entice – just ask them. It’s the co-operative thing to do. And it doesn’t cost as much.

Old-style marketing and merchandising and the consequent sales figures may have a place in helping us to determine what our owners want. But a limited place. However, if we adhere slavishly to the whole expensive and reactive exercise, treating it as some sort of infallible religion, we risk not only making ourselves more remote to our owners, but also wasting a lot of money.

You cite the example of a recent weekend Wellness promotion, comparing consequent sales with the same weekend last year, noting they were less, and concluding that ‘this promotion wasn’t enticing enough to bring customers into the store.’

Leaving aside my point that this sort of approach is antithetical to the co-operative ethos, it just doesn’t make any kind of commercial sense. You do not have enough information from sales alone to be able to make a sensible comparison.

Was there a more interesting basketball game on this year, which kept people home? Was the weather worse? Has the weather been worse generally this winter, encouraging folks to look after themselves better, hence requiring less Wellness this late in the Winter?

You don’t get this control information from sales figures. You get it from people. And that again is what sets co-operative ownership as a business model apart from conventional and impersonal marketing gimmickry.

The most important lesson that economists, micro and macro, have learned in the past forty years is that they are wrong to base their predictions, comparisons and conclusions on models which treat human beings as identical rational economic agents. People are people, not economic robots. They behave irrationally. And no two of them are the same. If you want to know what they want, ask them. Better still, let them choose.

That is the lesson behind localism, devolution of power and economic democracy. It is the impetus behind the growth in mutualism and co-operation. Well, in most other co-operatives aside from ours, where apparently we still believe that we can best understand our owners and provide for their common needs by pretending they are merely sales figures.

So. Share you figures. But why not place more emphasis instead on an intimate and personal owner-driven merchandising effort, rather than a reactive and remote marketing-driven one?

Why not set up consumer-owner product discussion groups? Why not encourage all marketing and merchandising staff to spend at least a day a week behind a counter, talking one-on-one with owners? Why not have an online forum, to allow owners to talk with each other, and give you regular feedback?

And why not do the asking before you make changes, not after?

I do not believe that relying on a hit-and-miss marketing effort is any more empirical than employing the co-operative option of simply asking our owners what they want. I do, however, believe that in terms of all of the investment required it is more expensive.

I think it only fair to mention that I am placing this letter on my blog. Along with the caveat that these are my views, and not the official views of WSM. You made your changes public. I’m making my suggested alternatives public.

All the best in co-operation,