Christmas Tesco Horse Meat Scandal

Vox-Pop: Is this a make or break Christmas for Tesco?

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By Jennifer Faull, Deputy Editor

October 24, 2014 | 8 min read

It has been a trying year for Tesco. Between the competition from discount retailers like Lidl and Aldi and yesterday's revelation that it had overstated profits by £263m - resulting in chairman Sir Richard Broadbent resigning - it is in need of a strong Christmas to not only win back consumers, but start pleasing investors as well.

So could this be a make or break Christmas for Tesco? The Drum asked some industry insiders to offer their views on what the ailing retailer needs to do this festive season to start making a comeback.

Toby Richards, planning director, Publicis Chemistry

No [it's not a make or break situation]. But a good Christmas would certainly help.

Tesco has an identity crisis that has built up over time. Historically its 'every little helps' was real value proposition that meant more than just cheaper. It arguably defined the market in delivering shopper simplicity – bringing together propositions that where contextually right for how people were living their lives at the time. Price was at the heart, but its 'every little helps' made life easier.

It made loyalty easier through Clubcard, shopping easier through .com and top-up shopping easier with Express and Metros. Constantly adapting to the shoppers' expectations of how they shopped and rewarded them for doing so.

Christmas would be a great opportunity to reclaim its rights to ‘easier’ and create a shopper simplicity benefit that can be both promised and experienced.

Whether this is to have carpark ‘space spotters’ to get you in and out quicker, bag packers, or more time slots for click and collect; anything that can pay off ‘every little helps’, as it is the little steps that accumulate our appreciation, trust and respect.

Steven Parker, co-CEO, Starcom MediaVest Group

My broader perspective is that everyone pokes at the leader – and Tesco is still a market leader. People have been waiting for a reason to really challenge the practices and yes, Tesco has allowed for that.

But, it is not the only supermarket under pressure and Christmas - ​the scale of communications, pre-sale figures, and the immediate post-sales figures will all be analysed aggressively.

However, because of the disproportionate light that is being shined on Tesco at the moment it’s important that it performs well and gets more positive coverage around brand performance.

This Christmas and beyond will bring the challenge of understanding what balance to strike between price and bringing some warmth to the brand.

It knows that price is such an important part in the decision process and for many people Tesco is still one of their most trusted brands. But the relationship between people and supermarket brands is changing and you don’t want price and value to be the reason for someone to invest.

Tesco will lead with price but try and get a message across that shows how it can be a trusted partner at Christmas. It’s a fine creative balance but there is an opportunity for Tesco to be a bit braver in how it communicates its proposition.

Everyone is poking at them, but because of that it has the opportunity to be brave and I hope that it is.

Sarah Todd, UK CEO, Geometry Global

This is a make or break Christmas for Tesco as it's the key trading period of the year and all eyes will be on it. But it could also herald a positive start to a turnaround if handled correctly and with the right tone of voice.

Tesco needs to show its confidence and human side by demonstrating that it is going to reconnect with consumers as well as colleagues in the frontline and get back to a closer emotional understanding of what shoppers are looking for in a less mechanical way.

Honesty about the challenge ahead and the commitment to making a British brand great again would be a good place to start.

Importantly, Tesco should quickly ensure that shoppers are aware of how it will deliver the Christmas basics competitively (ie price) while also communicating its offering that is new and unique, thereby making Tesco a destination for certain special items or ranges.

Creating those incremental trip drivers will be critical to differentiate the brand during this competitive period, alongside addressing the all-important convenience issue with additional online delivery or collection options.

Establishing a positive tone of voice will also be essential – Christmas is a joyful time and offers the perfect opportunity to reconnect emotionally.

George Webster, content director, Critical Mass

Christmas couldn’t have come at a better time for Tesco. Why? Because it can leave behind the talk of financial mishaps and help consumers to have a great holiday period.

However, it mustn’t get drawn into a discounting battle with its competitors by stacking it high, and selling it cheap.

For Tesco, Christmas should be less about selling more, and more about helping people to buy more. Selling more means using broadcast advertising, sending offers, offering discounts; whereas if you are saying 'can we help you buy more', your emphasis is on making the process more pleasurable for the consumer.

With that in mind, if they're in the store longer, then by proxy they might spend more. Mums often shop with kids and kids want to leave quickly. So they should look to digital tech to create an experience for kids to give them a reason to want to stay in the shop longer. And the games would even be geared up to help Mum earn some extra reward points if they do well.

In terms of big data and analytics, Tesco tends to do this well in the first case, but big data is simply about joining the dots. In the short term, Tesco needs to raise the feel-good factor. Using its Clubcard points it could be doing a lot more to 'surprise and delight' to bring some smiles back into the shopping experience.

Longer term, no retailer to my knowledge has yet cracked a singular joined up experience from shopping list to plate. Tesco should go back to basics and focus on delivering the ultimate customer experience.

Jamie Riddell, founder at BirdSong

Earlier in the year we saw a Tesco disconnected with its social audience – beaten not just by the cheaper prices of Lidl and Aldi but also by the premium retailer Waitrose.

A perceived lack of synergy with its wider price messaging, and a failure to engage with what its followers’ expectation contributed to this discord. Whilst Aldi was offering its fans a daily ‘like to win’ competition, Tesco was celebrating National Macaroon day.

For Christmas, Tesco needs to reboot its customer proposition, define its strengths and play to them. It needs to ensure all communications reflect and support this.

Across all channels including TV ads, social engagement, price promotion and customer service, the consumer needs to be in no doubt why they should shop at Tesco.

Dan Todaro, managing director, Gekko

Let’s be clear, Tesco is by no stretch of the imagination done for, it’s a vast enterprise and is still making a sizeable profit. Yet big isn’t necessarily better, and consumers are no longer looking for a cluttered one-stop-shop solution.

Aldi and Lidl are completely different entities, giving consumers the choice they deserve, but Tesco shouldn’t necessarily fight them on price.

The supermarket retailer needs to show consumers it really does care – especially following the loss of trust during the horse meat scandal, which was the result of poor quality control and a lack of respect and understanding for consumers who won’t compromise on quality at any price.

Understandably consumers felt ripped off. Tesco therefore needs to restore confidence and trust to win back disaffected customers. This will require a measured and strategic investment in improving the in-store experience.

Waitrose for example, the only other non-budget supermarket to have increased its market share, understands this. Tesco needs to put more staff on the shop floor, helping consumers to make their purchasing decisions while offering expert product advice.

Grocery retail is a dynamic industry, always evolving to meet the needs of consumers. Increased investment in staff is a vital factor to Tesco’s success this Christmas.

Christmas Tesco Horse Meat Scandal

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