Tesco shows size is no drawback to shrewdness

For a beast long-perceived as a lumbering behemoth, Tesco is demonstrating some agility and evolutionary leaps in its attempts to turn around what has a been a dire period in its recent history.

Branwell Johnson

Initiative after initiative is being unveiled and each one places at the heart of the supermarket’s strategy something long missing – the customer. Many of these ideas are also potentially of benefit to marketers, though of course, what Tesco gives with one hand it can take away with the other.

What do I mean? Well, earlier this month we had the launch of Clubcard TV powered by Tesco’s Blinkbox arm. It’s an amazing proposition – targeted ads via a free TV service based on a shopper’s Clubcard data. That could unlock real value for advertisers and I’ll be keen to see how much sales uplift can be attributed to the channel.

And now there is the new Price Promise checkout scheme that offers money-off coupons up to a value of £10 at the till if rivals prove cheaper for a basket of 10 or more goods. Tesco, having learned from its fumbled Big Price Drop campaign in 2011, is taking a cleverer approach to this mechanic. Of particular note and to the disadvantage of brand marketers is that it is the first price-match scheme to include own-label products.

Own-label has taken a bigger share of shoppers’ baskets of late (value share rose 0.2 percentage points year on year to July 2012 to 29.5 per cent, according to SymphonyIRI Group). Tesco’s scheme and attendant marketing draws attention to its own-labels, something brands will just have to swallow.

It is unlikely that Tesco’s initiatives have been unveiled purposefully just as it deals with the brand reputation damage from the horsemeat scandal. They are likely to have been in the pipeline for some time. However, their timing will be good for internal morale and shows the supermarket has not been paralysed by supply chain events beyond its immediate control. The supermarket’s YouGov BrandIndex Buzz score jumped significantly last week, so it appears customers are both receptive to its innovations and forgiving.

There’s plenty that can still go amiss and much more to be done in customer reassurance regarding the provenance of foodstuffs (check out our in-depth feature on the food industry crisis and how it effects marketers) but Tesco is finally showing that its size is not a barrier to innovation and smart thinking.

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