Having been shown round one of their newest large stores by the UK COO Tony Hoggett it is clear that Tesco are engaged in a couple of programmes. First they intend to utilise the customer insight they have been gaining for years and second they intend to be more up-front with the media and pundits on how they are using it. Sounds like a mere semantic shift? No, I think it is quite a bit more than this and anything that brings human faces and personalities to the front of a previously grey and overly corporate body like Tesco can only be a good thing.
There is no doubt that with Hoggett they have a retailer who understands the power of customer insight, proud of the advances they are making in meeting customer needs but also ambitious and honest enough to recognise where they are not, yet.
Ensuring the store layout reflects the different missions is a key pillar of the Project Reset. According to Tesco customers fall into 4 main categories:
- To buy something to eat now
- To buy something to eat later today / tonight’s tea
- To top up on known larder items
- To complete a full main shop
With nearly 49 Million (yes that is right) transactions each week they have a lot of data to work on from those of us (most of us) who chose to use Tesco Clubcard. This has helped Tesco build a store that allows an ease of shop for each shopping Mission and although it not revolutionary, is a step ahead of merely putting sandwiches by the front door.
Tesco have created zones that grow from one another; the snacks now at the front, joined by the fresh food areas, joined by the grocery ambient and finally joined by the non-food perimeter of more discretionary purchased lines. I questioned if this removes the ability for customers to add to the basket on impulse and was assured this was not what the stats were saying. My word of caution would be that Tesco may have to ramp up the impulse displays off-shelf to gain margin back in the more regularly shopped areas.
Another point to note was the space given to fresh. Bicester store had wonderfully wide produce department aisles and a complement of Fish, Deli, Salad Bar and cooked chicken all offering a slightly more premium and potentially lower unit volume offer to customers. Looked good, or rather it looked like most other supermarket fresh food offers in the last 10 years – well-presented and fresh, yet lacking real ambition and in a geographic area where the premium range would do well. It seemed a missed opportunity not to have expanded that and gained some real foodie kudos. It’s okay being good, but it’s a long way from best. The investment in this service offer and allowing customers the colleague interaction is great to see however.
The seasonal events aisle was full of Euro 2016, Father’s Day offer and some Outside Summer. Being told how successful this offer is for Tesco was necessary, as frankly it did not look like it would be particularly successful. Not ambitious or in any way destination, it looked like success comes from putting ranged lines in the mix and claiming the benefit to the event, again more commitment needed here.
F & F was tidy, neat, well merchandised but not geared for the area and the mens offer is a big disappointment on range. An important profit area of their operation seems to be too much of a secondary consideration, more room for improvement and growth here.
BWS looked great and the range rationalisation on wine does clarify the offer as much as range intensification on craft beers and ciders. It all seems the right thing to do and when placed in this format looks so browse-able.
I left this store feeling that Tesco are no doubt improving their offer and by concentrating on their own customers (not those of fringe businesses) they will be driving positive LfL’s quickly. Still lots to do in reaching not just the customer mission but the individual aspirations of customers. We expect a tricky year on profit but a renewed sales line that will in time turn into profit growth.