Home > marketing ramblings > Why does everyone want to be like Tesco?

Why does everyone want to be like Tesco?

Maybe it’s just me, but it seems like at least once in every brand, product or service planning session, someone always says they should “be like Tesco”.

I’m never sure what this actually means… having a “loyalty” scheme that works?, driving the business from data?, owning your own data? (as oppose to Nectar where you don’t – a crucial difference in their relative success, but that’s another story), having a flourishing expansion programme even when it ignores planning regulations? or oppressing suppliers?… I guess they just mean successful.

This is obviously a crass reflection of what they are actually alluding to, but Tesco’s success needs to be understood before it can be emulated.  We should also remember that not every brand, product or service can or should actually follow Tesco’s strategy.  After all, Tesco has achieved something unique amongst retailers – to appeal to all segments of the market – something which isn’t for everyone.

From an East end stall to the third largest global retailer in 90 years:
1919  Jack Cohen sells surplus groceries from his market stall
1924  Tesco opens first store
1939  Tesco opens hundredth store
1961   Tesco Leicester becomes the largest store in Europe
1968   Tesco opens UK’s first ‘superstore’ in Crawley
1970s   Lead the supermarket growth nation-wide
1992   Tesco slogan ‘every little helps‘ launched
1993   Launch the Tesco Value range (which
1995   Launch Tesco Clubcard scheme
1996   Introduced its first 24-hour store
1997  Terry Leahy became CEO, “The Tesco Way” manifesto launched
2002   Becomes UK’s largest retailer
2007   £1 in every £7 spent at Tesco
2010   Announce record £3.4bn profits, up 10% on last year, despite the recession

Tesco marketing has been almost exclusively price led for the last 30 years… but importantly, this price positioning tends to be customer-centric rather than a pure-play discount brand like Lidl.  New own-brand launches, customer service drives, organic credentials, product diversification, all are underpinned by a lead on price.

My solution, when someone says we should be like Tesco, is to examine if this is something we shoud be aspiring to, via a few simple questions:
– Do we want to always lead exclusively on price?
– How can we make price into a true differentiator?
– Are we a traditional retailer?
– Can we draw parallels between grocery shopping and what we do?
– Is the objective to be as well know as Tesco or use their marketing model?
– Can we employ a similar data strategy if we don’t have data or are an irregular purchase?

And only when you can say yes to some of these question should you try to emulate Tesco’s strategy.

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Categories: marketing ramblings
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