Friday, 16 March 2012

How can Tesco win back customers?

Tesco's Big Price Drop scheme didn't win it enough customers to prevent 2011 loss of market  share to ASDA and other rivals. In fact, Tesco reported its worst Christmas sales results of the past 20 years. So its boss, Philip Clarke, is reportedly returning to the aisles to gain insights from shopper interaction, as Tesco's UK head leaves the company.

Marketing Week suggests that Tesco pursue a bold branding approach, which is a good idea.

But Nielsen, which tracks shopper purchasing and store sales, also says the Big Price Drop has started to show results in recent weeks. Yet Nielsen notes that price-sensitive customers must become loyal customers for this strategy to have long-term success: 
'Shopper promiscuity continues, with nearly all retailers seeing a small growth in their shopper numbers, but the challenge now is for them to convert this footfall into increased sales.'
Meanwhile, Tesco's price-cutting was in the headlines a few days ago, when the new Apple iPad was briefly offered for £49.99 on the store's site (see below). The offer was quickly withdrawn, with Tesco citing IT error, and nobody was able to buy at this obviously low price. One expert wonders: 'Was this a convenient error or a fantastic strategy from an online genius?'