Knowledge Bank Blog, Channel Execution

Change of Leadership at Tesco

What is the first move Dave Lewis should make?

Having written last week about one leader who has moved on, this week sees another significant change of leadership announced at Tesco.

What will Dave Lewis bring and what will he focus on? Much of the commentary has centred on the need for a review of the Tesco Brand, partly because that is clearly important and partly because of Dave’s marketing and FMCG background. However, we think even more important than that, is the need to do a full Customer Review. Taking a real step back to look at what Tesco shoppers are seeing, doing and feeling.

Why do we think this? Well, Tesco have relied heavily on Clubcard for customer insight over the last 20 years and, without doubt, it has been instrumental to their success over this time. Clubcard is brilliant at telling you what shoppers are buying, where and when. But it tells you very little about the actual shopping experience. What is and isn’t working? What is frustrating Tesco shoppers? What are competitors doing that Tesco aren’t? Just what is the Tesco shopper experiencing in store?

Knowing this is crucial to knowing what to do to change things.

So, what type of things have we been seeing and what type of questions would we be asking in a Customer Review…?

Our hunch is that Tesco are doing some great work in fresh and chilled food development. Many of the new products are very good. Yet are they really cutting through in store? We suspect that shoppers are noticing a fraction of these products. Are too many products being introduced at once? Are shoppers suffering range blindness?

How are shoppers experiencing value at Tesco? There has been much commentary on whether Tesco need to be more aggressive on price. Our hunch is that pricing and promotional simplicity are key. Is the amount of different price points, promotional mechanics, POS and supporting signage, helping or hindering the shopper? We suspect the latter. Too much shouting can lead to a cacophony without a clear tune. We think the Discounters have a clear tune.

How easy is Tesco to shop? A lot of attention has gone on the size of Tesco stores. Yes, this is important. But you can have big stores that are easy to shop and small stores that are hard to shop. Our hunch is that Tesco have taken their eye off the small things that add up to an easy shopping experience, the things they used to do really well. How clear is the navigation, flow and signage around store. Do they have clarity of range and price tiers? Are they as obsessively focussed on queue length as they used to be?

Above all, it is an attitude of mind. Tesco have been brilliant at delivering for customers and could be again, if they choose to ask the right questions about shoppers, and pause to listen hard to the answers. Then, as we said last week, turn those answers into a simple, clear manifesto that directs what they stand for and how they will win with customers.

So, that everyone, from senior management to staff on the shop floor, knows and understands it. And shoppers have a clear, compelling reason(s) to shop at Tesco over the coming years.

Have a great weekend and speak to you next week.