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If You Asked A Customer of UK Supermarket Chain Tesco What The Shopping Experience There Was Like in The Early 1980s

1) In the 1980s, Tesco struggled with a reputation as a low-cost retailer and lagged behind Sainsbury's. To gain market share, Tesco launched over 100 initiatives between 1990-1992 to improve stores and customer experience through its "Every Little Helps" campaign. 2) Tesco then introduced its Tesco Clubcard program in 1995, allowing it to gather extensive customer data and tailor offerings. This helped propel Tesco to surpass Sainsbury's as the market leader. 3) By using customer data to inform products, merchandising and new store locations, Tesco saw continued success and market share growth through applying its customer-focused strategies.

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132 views2 pages

If You Asked A Customer of UK Supermarket Chain Tesco What The Shopping Experience There Was Like in The Early 1980s

1) In the 1980s, Tesco struggled with a reputation as a low-cost retailer and lagged behind Sainsbury's. To gain market share, Tesco launched over 100 initiatives between 1990-1992 to improve stores and customer experience through its "Every Little Helps" campaign. 2) Tesco then introduced its Tesco Clubcard program in 1995, allowing it to gather extensive customer data and tailor offerings. This helped propel Tesco to surpass Sainsbury's as the market leader. 3) By using customer data to inform products, merchandising and new store locations, Tesco saw continued success and market share growth through applying its customer-focused strategies.

Uploaded by

seif mamdouh
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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If you asked a customer of UK supermarket chain Tesco what the shopping experience there was

like in the early 1980s, “customer friendly” would probably not be the answer. Though it began
upgrading its stores and product se- lection in 1983, Tesco continued to suffer from a reputation
as a “pile it high and sell it cheap” mass market retailer, lagging behind Sainsbury’s, the more
upscale market leader. To gain share against Sainsbury’s, Tesco needed to reverse the public
perception of its stores. It decided to improve the shopping experience and highlight
improvements with an image campaign to “lift us out of the mold in our particular sector,” as its
1989 agency brief put it.
Between 1990 and 1992, Tesco launched 114 separate initiatives to improve the quality of its
stores, including adding baby-changing rooms, stocking specialty items such as French free-
range chickens, and introducing a value-priced line of products. It developed a campaign entitled
“Every Little Helps” to communicate these improvements with 20 ads, each focused on a
different aspect of its approach: “doing right by the customer.” As a result, between 1990 and
1995, Tesco attracted 1.3 million new customers, who helped increase revenues and market share
until Tesco surpassed Sainsbury’s as the market leader in 1995.
Tesco then introduced an initiative that would make it a world-class example of how to build
lasting relationships with customers: the Tesco Clubcard frequent-shopper program. The
Clubcard not only offered discounts and special offers tailored to individual shoppers but also
acted as a powerful data-gathering tool, enabling Tesco to understand the shopping patterns and
preferences of its customers better than any competitor could. Using Clubcard data, Tesco
created a unique “DNA profile” for each customer based on shopping habits.

Tesco used its customer data to determine the range of products and the nature of merchandising
for each store, and even the location of new stores. Within 15 months of introduction, more than
8 million Clubcards had been issued, of which 5 million were used regularly.

Tesco used its customer data to determine the range of products and the nature of merchandising
for each store, and even the location of new stores. Within 15 months of introduction, more than
8 million Clubcards had been issued, of which 5 million were used regularly. Tesco’s customer
focus strategies enhanced by the Clubcard helped propel Tesco to even greater success than in
the early 1990s. The company’s market share in the United Kingdom rose to 15 percent by 1999,
and that year other British companies voted Tesco Britain’s most admired
company for the second year in a row.
In the following years, Tesco continued to apply its winning formula of using customer data to
dominate the British retail landscape. Tesco moved beyond supermarkets to “big- box” retailing
of general merchandise, or nonfood products. This strategic growth not only provided additional
convenience to consumers who preferred shopping under one roof but also improved overall
profitability. In 2003, the average profit margin was 9 percent for nonfood products versus 5
percent for food and nearly 20 percent of Tesco’s revenues came from nonfood items. That year,
the company sold more CDs than Virgin Megastores and its apparel line, Cherokee, was the
fastest-growing brand in the United Kingdom.
Tesco continued to conduct extensive customer research with telephone, written surveys, and
customer panels to extend its lead in the grocery market. By 2005, the company had a 35 percent
share of supermarket spending in the United Kingdom, almost twice that of its nearest
competitor, and a 14 percent share of total retail sales.
Tesco continues to diversify its product and service offerings in order to reach more consumers.
In the late 1990s, Tesco launched its own ISP service, Tesco Broadband, to provide Internet
access to homes and businesses. During the 2000s, the company partnered with existing telecoms
to create Tesco Mobile and Tesco Home Phone, a service now used by over 2 million UK
residents. Recently, Tesco joined forces with the Royal Bank of Scotland to create a banking
division, Tesco Bank. In addition, Tesco offers in- surance policies, dental plans, music
downloads, and financial services.

One Citigroup analyst said the chain had, “pulled off a trick that I’m not aware of any other
retailer achieving. That is to appeal to all segments of the market.” Tesco has accomplished this
feat by creating three distinctive Tesco-branded price ranges in order to appeal to everyone:
“Finest,” “Mid-range,” and “Value.” In addition, Tesco has categorized its stores into six
different formats, depending on where they are located and whom they are targeting. From
largest to smallest, these stores include Tesco Extra, Tesco Superstores, Tesco Metro, Tesco
Express, One Stop, and Tesco Homeplus.

During the recent world- wide recession, Tesco helped trigger spending through special loyalty
promotions such as double reward points. During a double points promotion, consumers receive
2 points for every £1 spent. For every 100 points, consumers receive a £1 voucher good for any
Tesco product or service.
In 2009, Tesco’s profits reached £3 billion, which resulted in £59 billion in revenues. Today, it is
the largest British retailer measured by both sales and market share (30 percent). Based on profit,
it is the second largest retailer in the world after Walmart

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