BBH will focus on advertising and customer relationship marketing, led by its chief executive Neil Munn. The agency has been charged with reconnecting Tesco with its customers and rebuilding trust in the brand.
BBH has been praised for its work with Waitrose, as it has positioned the retailer as a distinctive brand in the supermarket space by focusing on its core point of difference and its “unique values” as an employee-owned business. Waitrose continues to outperform the market, with like-for-like sales up 2.8% over Christmas.
Tesco is hoping it can bring the same success to its brand and business.
Tesco had a difficult 2014, hit by falling sales and market share. It was forced to issue four profit warnings and admitted to a £263m black hole in its accounts.
It parachuted in new chief executive Dave Lewis in September, charging him with turning around the business. He previously worked on personal care for Unilever. Its male deodorant business Axe/Lynx is a major client of BBH globally.
Lewis has already announced a number of changes including price cuts, a renewed focus on in-store service and the closure of some loss-making stores. He has also reshuffled the marketing department, appointing Robin Terrell as its new marketing boss with the aim of creating a more joined up customer experience and consistent brand message.
Lewis admitted that the Tesco brand has also taken a hit and that it must focus on rebuilding its connection with customers. Figures from YouGov’s BrandIndex show that its Index score, a measure of a range of brand metrics including quality, value and impression, has fallen by 4.4 points over the past year, a statistically significant drop.
Lewis says the appointment of BBH, as well as Blue Rubicon, is aimed at “the turnaround of our reputation and brand”. Blue Rubicon will focus on reputation strategy, positioning and reputation campaigning.
He adds: “We are assembling a small team of world class advisers to work on the turnaround of our reputation and brand.
“Both businesses will play a central role as Tesco reconnects with customers and rebuilds trust in the brand in the coming years.”
Tesco’s ad business is understood to be worth around £110m. The decision to move it to BBH comes without a pitch and ends its two and a half year relationship with Wieden + Kennedy.
There has been much speculation about the future of Tesco’s ad account, with critics suggesting it needed a stronger brand positioning. BBH is part of Publicis groupe, while W+K is an independent agency.
The move means BBH will be ending its relationship with Waitrose due to conflict rules. Waitrose marketing director Rupert Thomas says it is yet to decide on a new agency.
He adds: “BBH has done a wonderful job for us and we wish them well for the future. We’re now going to take some time to think creatively about our approach.”