Over a third (35%) of British shoppers have never used a price matching scheme in-store (a figure that rises to 80% online), according to YouGov, and Terrell is convinced Brand Guarantee can lower this number by simplifying the experience.
Brand Guarantee works by comparing the cost of a customer’s branded grocery shop against Asda, Morrisons and Sainsbury’s. If the Tesco shop is more expensive, shoppers immediately get the difference taken off their bill at checkout. The scheme will also price match against promotions at Tesco’s big four rivals.
How the rivals stack up
Morrisons announced last week it is revamping its Match&More scheme. Previously shoppers spending over £15 could earn points if their shopping would have been cheaper at Tesco, Sainsbury’s, Asda, Aldi or Lidl. But from November, Morrisons shoppers will instead get five loyalty points for every £1 spent, on anything over £1.
Asda, meanwhile, offers the Asda Price Guarentee, which gives customers vouchers if their basket isn’t at least 10% cheaper than Sainsbury’s, Morrisons or Tesco.
Sainsbury’s Brand Match is a similar scheme, which works by giving customers vouchers up to £10 if an identical basket of branded products would have been cheaper at Asda.
Brand Guarantee has its doubters
However not everyone is convinced by Tesco’s Brand Guarentee. Shore Capital analyst Clive Black thinks the decision not to price match Aldi and Lidl is the wrong one.
“British shoppers know that the limited assortment discounters (LADs) are cheaper than the superstores and to focus only on matching prices of the Big Four is simply myopic to our minds,” he says.
“Why not scrap what was an increasingly meaningless ‘Price Promise’ altogether and just have confidence in the reality of Tesco’s price file. Most people do not believe when one supermarket says it is cheaper than another, that’s just the reality.”
But Terrell – who was formerly multichannel director at Tesco and took on the customer officer role last December – insists that Brand Guarantee will be a big hit with consumers. It is being supported with a print, social media and out-of-home campaign.
Here Terrell tells Marketing Week why Brand Guarantee is the right mechanism and how trust is returning to the brand.
Marketing Week: Price matching is nothing new to this market. What makes Brand Guarantee different?
Robin Terrell: When we talk to customers about these sorts of price matching schemes, you’re instantly aware of how many options there are. However what people tell us loud and clear is that they want simple immediate value as opposed to storing up vouchers for the future. That is a critical part of the Brand Guarantee.
We are excited about the potential here and how moving away from vouchers could impact other parts of the business. We have been running it for the past four weeks in Northern Ireland and the feedback there from colleagues and customers has been very positive. We know that half of the UK population doesn’t redeem these paper vouchers because they lose them or forget them, so this is a big step forward for the market.
Why did you not include the discounters in your price matching?
Customers tell us that the items they want reassurance or peace of mind on are the ones that are identical – so that’s why we chose branded lines. When we look at the limited assortment retailers there isn’t the same consistency to their ranges. The discounter’s product range is too sporadic when it comes to branded goods. Brits don’t have to shop around anymore as we will match anyone’s promotions. This is all about offering simple, immediate value at Tesco.
Has the chief customer office role been a steep learning curve given that you’re background is in ecommerce and not marketing?
It’s been very positive. Even when I was at Amazon for six years, my whole approach was always customer focused. I had it drilled into me at an early age to be relentlessly focused on improving the service for customers. Part of my role now just happens to be deciding on how we communicate with them and what messages to use. The marketing team at Tesco is in a great place. Michelle McEttrick, who we got in as brand director last year, has landed brilliantly, and she’s doing a great job to take the team forward. People will be impressed with what is coming from our above the line creative.
But we have tried to be clear that actions speak louder than words. So it is with a steady approach that we will increase the marketing actions that can ultimately help us rebuild loyalty.
Critics have said the big four are struggling as their marketing is too price-focused. Do you subscribe to that point of view?
We’re focused on ATL but only when we can be unique and helpful. I think Brand Guarantee is unique as it is offering customers something no one else can match and it is helpful as it is born out of customer feedback. Moving forward, if we talk about price it will only be because it ticks those two boxes.
Speaking of your old stomping ground at Amazon, are you worried about Amazon Fresh and its trials?
Having been there myself, I think it was only a matter of time really. As the years go by they will start to sell everything, that is the reality we face. In our market, there are other people doing a great job and Amazon will just add to that number. We are focused more on improving our service to customers as that is what will ensure they don’t have a reason to shop at Amazon Fresh in the first place. It is a very big market and there’s room for us all.
What is the key to winning back trust in the Tesco brand and is the tide turning?
We would all like to find that silver bullet but when you talk about loyalty it is an accumulative effect of many small things. Price investments help but so does improving the in-store experience. Overall we are just focused on not giving someone an excuse to shop at the other supermarket across the street.
The tide is turning as we have seen volume and transactional growth for some time now. Tesco is winning back more customers who are also buying more things. My job is to make sure this trend continues.