Tesco reshuffle exploits multi-channel strengths

Tesco is hoping a reshuffle of its executive team can help halt declining sales by increasing its focus on customers and position it to exploit its strengths in multi-channel.

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It has appointed chief marketing officer Matt Atkinson to the newly created position of chief creative officer, with Jill Easterbrook now responsible for marketing in her new role as chief customer officer – effectively putting an end to the CMO role.

The moves have raised eyebrows, particularly because Easterbrook has little background in marketing. She has held several senior roles since joining Tesco in 2001 including director of its clothing business and corporate affairs director.

It is her lengthy tenure at Tesco and “deep affinity with or understanding of” the Tesco customer that chief executive Philip Clarke believes makes her ideal for the marketing role.

While Easterbrook may not be a marketer in the traditional sense, Mike Dennis, analyst at Cantor Fitzgerald, says she has a deep understanding of the business having taken a “classic path” through Tesco. He compares her career trajectory to former marketer Carolyn Bradley, who worked in a number of diverse roles before becoming UK marketing director.

Appointing her as CCO, rather than CMO, also makes sense, believes Dennis, because of the huge amount of customer data Tesco holds via its Clubcard loyalty scheme, which it can use to make Tesco “a more appealing brand” after its “trust and brand equity fell nearly to the bottom of the pile”.

According to YouGov’s BrandIndex, Tesco lies in 25th position, ahead of just The Co-operative, in terms of Buzz – a measure of the positive and negative things said about a brand.

Market share fell to 29.5 per cent in the 12 weeks to 28 May, according to Kantar Worldpanel. Sales declines are accelerating, falling to 3.1 per cent, from 2.4 per cent in the 12 weeks to 27 April and analysts widely expect Tesco to report its worst performance in more than a decade for the first quarter. The results are released tomorrow (4 June). 

Tesco is trading “quite dreadfully in the UK”, according to Shore Capital analyst Clive Blac. He believes Tesco “cannot see the woods for the trees” and is not going far enough to get across its pricing message.

The bright spark for Tesco is its success in technology and multichannel. It has sold more than 500,000 Hudl tablets and has plans for a follow-up, as well as its own smartphone.

Online sales were up 11 per cent last year and it still accounts for more than 50 per cent of the market.

Atkinson will be tasked with developing new products and services with an emphasis on digital.

Clarke said of the executive reshuffle: “We’re on a journey to reshape Tesco into a business which can lead retailing in the multichannel world. By putting the customer at the centre of our plans, we’re making the most of the exciting developments in digital technology to enable our shoppers to engage with Tesco however, whenever and wherever suits them.”

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