Tesco looks to Unilever marketer to provide a clear brand identity

Tesco has turned to former Unilever marketer David Lewis to help turnaround its performance through a renewed focus on its brand identity and reconnecting with customers.

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Lewis, currently global personal care boss at Unilever, will take over as Tesco’s chief executive from Philip Clarke in October. He faces the challenge of turning around the supermarket’s recent run of sales declines as well as shifting customer perceptions of the brand.

Tesco says Lewis has been hired for his “wealth of international consumer experience and expertise in change management, business strategy, brand management and customer development”. In particular it is his experience of branding that has interested Tesco, analysts believe.

Lewis’ role at Unilever has seen him take on responsibility for household brands including Vaseline, Lynx and Lifebuoy soap. He also helped launch the Dove brand in the UK in 1992, coming up with the “Love your body” marketing campaign that used “real” women, rather than models.

It is this understanding of branding and connection to the customer that Tesco is after, says Planet Retail’s global research director, Natalie Berg.

“As a branding expert, Lewis’ first task will be to define Tesco. It is caught between a rock and a hard place – it doesn’t stand for value, yet it doesn’t stand for quality, and without a clear proposition we fear that Tesco will continue to lose customers to more relevant and better-defined channels,” she adds.

Lewis has no direct retail experience, but Berg says while this is a concern it isn’t necessarily an impediment to taking on the top role at the UK’s biggest retailer. As Clarke points out, Lewis has worked with Tesco “direct and indirectly” over many years and is already well-known within the business.

He also has experience in pricing, supplier negotiations and how to cope with price wars. Berg believes this is one of the big challenges facing Tesco as it attempts to stave off the threat of the discount grocers Aldi and Lidl.

Tesco has responded by cutting prices and launching a marketing campaign with the message “Prices down and staying down”. However, Berg says these price cuts do not go far enough and will do little to worry the discounters, which are continuing to see double-digit growth.

Philip Dorrell, grocery analyst at Retail Remedy, believes Tesco needs to have a much stronger focus on price because at the moment it looks like it has been pushed into price activity because of competitors, rather than because that is what the brand stands for. It also needs a more consistent price and value message, rather than flitting between its numerous offerings, which include Clubcard, Fuel Save, Price Promise and Prices Staying Down.

Lewis has also been brought on board to work out what Tesco’s points of difference are and how to communicate them, believes Dorrell. As an outsider, he should have a fresh perspective on the retailer and what needs to change.

However, Dorrell cautions that at the moment there is very little Tesco is doing well. He says that despite all the information it has on customers through its Clubcard loyalty programme it hasn’t connected with consumers’ emotions, leaving many feeling Tesco is a “necessary evil” rather than a company they would advocate.

“Tesco needs to be very strong on its points of brand differentiation, what it does better than everyone else, although what that will look like is unknown. Their online is bigger but not necessarily better, their ranging is boring, their stores are boring. They have to got to find that one thing, their unique selling point,” he adds.

The fact that Lewis isn’t a Tesco lifer, like Clarke, shows a willingness to make some “pretty big changes”, says Berg. She believes Tesco has done well up to now to have a broad appeal and be “all things to all people” but with so many choices available to consumers now, form online to convenience to discounters, it needs to be more precise in what it wants to achieve, who it is targeting and consistency of messaging.

“Lewis is a branding expert and has expertise in turning around businesses. Tesco is in dire need of both,” she adds.

Read Mark Ritson’s take on the appointment here.

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