For Tesco, Sainsbury's, Homebase, Morrisons and others, the information revolution wrought by the internet has only just begun

Falling sales and closures at major retailers aren't just down to competition from online rivals, discounters or 'austerity' - it's the information revolution wrought by the internet that is exposing retailers' dirty marketing secrets

Another week, another supermarket posts a sharp fall in sales and profits. In Tesco's case, it comes with the added theatre of an accounting scandal, which seemingly unfolded as sales and profitability fell, and certain senior staff felt the pressure to try and cover that up rather than face up to the harsh truth.

Most reports about falling supermarket sales have focused on the growing price-based competition of the discounters, mainly Aldi and Lidl, which after more than a decade in the UK have suddenly ceased to be loss-making shopping basket-cases.

But underlying their success, and the challenges facing all of the UK's major bricks-and-mortar retailers, is the quiet information revolution wrought by the internet.

It might seem 15 years too late to stress, but the challenge the internet poses to retailers isn't simply limited to competition from online-only rivals like Amazon.com, eBuyer and Ocado. It's the information that shoppers can share and learn about retailers' dirty little marketing secrets, as well finding out more quickly not only what products are genuinely good, but the ones to avoid, too.

In the process, the scales have fallen from many shoppers' eyes.

Ignoring the problem

As competition from their cheaper rivals hotted up, the major supermarkets' first response was to ramp up the very marketing "offers" that were already raising customers' hackles, and increase prices. Not necessarily in an obvious manner, but here and there, from one month to the next, on items that shoppers would not initially notice. In that way, they could give the appearance of continuing to increase sales every quarter to their shareholders, even as customer numbers and average spend started to drop.

Until, that is, it reached a certain point where prices could be raised no longer and the game was up. It hit Morrisons first, then Tesco and Sainsbury's. Now, even Homebase, which has been slammed in online forums and newspaper comment sections for its "high prices", says that it will have to close one-quarter of its stores.

But the real story is not necessarily the rise of the discounters, but the impact of the internet in helping to disseminate information and knowledge that has undermined the major supermarkets' marketing messages and methodologies.

The tragedy of the executives at major retailers is that they don't realise that the internet doesn't just mean home delivery - it also makes customers much better informed about all their marketing tricks, the prices of the same products at different shops, and the quality of various goods (making it easier to switch with confidence).

In other words, the old marketing game is up: customers no longer trust supermarket offers. Buy-one-get-one-free, half-price "deals" and all the other tricks that retailers' armies of marketers use to try and chisel a few more pence out of shoppers' pockets have been exposed.

What that means is that if a company like Morrisons, for example, was genuine about being "Your New Cheaper Morrisons" it would start by cutting its costs in marketing. Most of them are redundant; no longer necessary.

Instead, marketing functions will need to be leaner and focused on real customers with real needs, rather than tidying up after the business by helping to shift its overstock, or trying to manipulate more pennies out of increasingly angry customers' pockets.

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For Tesco, Sainsbury's, Homebase, Morrisons and others, the information revolution wrought by the internet has only just begun

Falling sales and closures at major retailers aren't just down to competition from online rivals, discounters or 'austerity' - it's the information revolution wrought by the internet that is exposing retailers' dirty marketing secrets

But at the moment, all we've seen is a continuation of the same sham sales, price cuts and marketing slogans. Thanks to the internet, however, the customer can see right through this, right away. Via social media, blogs, newspaper comment columns, specialist websites, forums and so on, sceptical shoppers can have their doubts confirmed, cheaper substitutes suggested and poor quality alternatives avoided.

Information is power

It is this speedy dissemination of information that is undoing the UK's major supermarkets, and many other businesses besides. It's another way that the internet revolution is working to spread information and that dissemination of information is empowering consumers to shop around and bring down prices.

Or, if you prefer, the internet isn't just helping to make business more efficient. It's making consumers more efficient too: in the background, a cultural revolution is taking place whereby all of the tricks of every trade are being laid bare.

Take, for example, the murky world of double-glazing: the products from one company to the next all seem pretty much the same, yet in the past the price has always seemed a mystery: an appointment with a sales "consultant" had to be made; they needed to come round to take an immense amount of time to measure up to provide a quote - but only after they'd subjected you to an obligatory three-hour presentation.

But we know now, thanks to the internet, all of the dirty secrets of their trade, and can print them out and tick them off when they come round to drink your Typhoo (240 bags for £3 in Iceland): the long presentation intended to wear the customer down, a "special discount" that will be discontinued at the end of the month will be offered.

Still stalling? Another special discount for agreeing to be a "show home" for their marketing will be put forward. And, after that, a phone call back to the office will be made to check whether another special deal is still on - of course it is, but it could expire at any time, so you need to sign on the dotted line now...

Retailers and other businesses have been getting away with these tactics for decades - but now we can recognise them as we encounter them, regardless of whether we're buying double glazing or doing the weekly shopping. We can share this information, and how to get a better deal or where the cheaper alternatives can be found - recommended to us by someone we've never met before, but nevertheless trust.

And yet many companies remain oblivious to this quiet revolution that is going on around them. They persist with their increasingly ludicrous charades, and it's making their customers incandescent with rage.

When Virgin Media, for example, suddenly hikes an in-contract price, that rage can be instantly shared - along with the knowledge that if you're prepared to ring them up, cancel the contract, speak to their "retentions department" when they call you back, and scream down the phone for half-an-hour, they'll come down first to £24 and then actually offer a price of £19.50, instead of the £31.50 they were previously trying to gouge you for.

The world is slowly changing thanks to the information dissemination wrought by the internet: the scenery has fallen down and we can see the strings moving the hands of the puppets.

The crusty, old management of these well-established companies, using all the tricks they learnt at business school in the pre-internet age, just don't know it, yet - and quite possibly they don't know how to respond either.