Old enough to remember the Tesco ads featuring the late and great Dudley Moore? Back in ’90s, they made us laugh. They converted a whole new audience to try Tesco … and we backed them.
The last time I shopped in Tesco was more than a decade ago. I can picture it. They’d just announced their first ??1bn profits. I’d popped in to get some sausages. I found myself queuing – surrounded by miserable folk – with a trolley half full of things I neither needed nor truly wanted. I abandoned my trolley and walked out. My abiding memory was that Tesco no longer needed nor wanted me.
The results just announced by Tesco show they’re slipping. They’ve been slipping for a while, but when something becomes so enormous, it is difficult to see how it is moving, if at all.
Tesco has spent a lot of time, effort and money trying to convince customers that they’re reducing prices. Yet in research just published (ICM poll in Retail Week), they’ve failed spectacularly. Only 13% believe prices have fallen. 45% think they’ve gone up and almost as many (43%) have seen no change.
The world is a very different place from when one half of Pete & Dud went in search of chickens in France. Customers are no longer so easily led. Thankfully, we are better informed, increasingly savvy and more demanding. … and not just on price. Perhaps that’s where Tesco has gone wrong?
We all love a bargain. And we want to like (if not love) and respect the companies where we choose to spend our money. Interestingly, in the same Retail Week that announced Tesco’s failing messaging, another article caught my eye: ‘How Amazon fulfills its promise to shoppers’.
Catherine McDermott of Amazon talks of ‘striving to close the gap between what you do and perfection’ – and says all Amazon employees are expected to ask the question: “How do I do this better for the customer?” She says that the etailer’s success is due to sticking to one golden principle: giving customers what they want.
My gut reaction is that such a guiding principle is not ranking as highly at Tesco as it once did. And many retailers are in the same position. Obsessed with price rather than service.
Amazon is an extraordinary business. Formed less than twenty years ago, they are now in a position where they can persuade customers to pay them a little extra for improved (Prime) delivery: ??79 per year to trigger better service.
And where headlines have plagued Tesco over alleged poor treatment of suppliers, companies are falling over themselves to work with Amazon. The company reports a 70% year-on-year increase in companies looking to use Amazon as a fulfillment house – picking, packing and delivering from their network of warehouses.
I’m not saying Amazon is all sweetness and light. Big corporations, as a result of their sheer scale, attract critics. But much of that criticism is around working practices and its corporate ‘being’. There appears to be little gripe from the customer.
Of course Amazon sells on price. But if driving prices down becomes your guiding principle, when others under cut you, your customers are likely to adopt that same principle and jump ship for a better deal. That has been happening at Tesco – and shoppers are looking around to ‘buy better’ as Tesco’s ‘price promise’ falls on deaf ears.
Tesco’s response? They are investing “more than ??200m in price at a time when hard working families need help the most”. Sounds impressive, but remember those savvy customers? They can do the maths. Across 3,146 stores and with over ??3bn in profit, does that cut it?
Much of my work is with shopping destinations and how they communicate their offering with the end customer – day-to-day, hour-by-hour. Customers want that level of interaction and they want it to be local.
Where Tesco once stood out and wooed us with beautiful ads and cheeky film stars, they now share the field with many also-rans, banging on about price – failing to get their message across.
Some not-so bright spark has recently launched a series of Tesco twitter accounts for the regions … Tesco London, Tesco Midlands, Tesco North, Tesco Northern Ireland, etc. The engagement is worse than poor. Tesco Scotland has tweets that are 10 days apart.
Shoppers don’t relate to a region. We relate to where we live, work and play. We relate to villages, towns and cities.
Tesco should have social media managed around the clock for each and every store – if they want to echo Amazon’s creed and ‘give customers what they want’. They could be revolutionary once more, ground breaking – and exciting. But they need to stop obsessing about ‘price’ and start obsessing about service. Why?
Stats from the Centre for Economics and Business Research forecast real household disposable income will rise by 1.5% and business investment by 10.1% this year. This is on the back of significantly improving UK consumer confidence, at its highest level in two years.
Tesco once built the bandwagon. Now they appear to be one of many trying to jump on it.
Former Tesco CEO, Sir Terry Leahy, said many good things when at the helm. He had drivers for growth including trust, information, convenience and simplicity. Crucially, he said any retailer should ‘follow the customer’. “You’re not going to be able to guess what the customer wants. You need to stay close to them, observe them and be prepared when you see change.” That insight appears to be lost. Customers have changed. They want to engage.
My involvement in developing and delivering digital communication for shopping centres and now SOCIALiSTREET for BIDs, towns and cities demonstrates that desire perfectly. Even the official Tesco Clubcard Twitter account informs customers that their team is offline from 6pm on Saturday until 9am on Monday morning. Seriously?
Tesco’s customers appear to have stopped listening to Tesco’s messaging. Has Tesco stopped listening to its customers? Give customers what they want. Involve them. Listen to them. Engage with them – on their terms, via the channels they choose. Anything less … is just a dud.
This Blog was first posted on Huffington Post