19 March 2014 - 9:47am | posted by | 1 comment

The digital age puts customers in control, Tesco CEO Philip Clarke says at Guardian Changing Media Summit

The digital age puts customers in control, Tesco CEO Philip Clarke says at Guardian Changing Media SummitThe digital age puts customers in control, Tesco CEO Philip Clarke

“One of the greatest achievements of supermarkets has been to make products accessible. In the past it might have been the avocado. Today's avocado is the tablet computer,” Philip Clarke, CEO of Tesco, said during his keynote speech at the Guardian Changing Media Summit.

Discussing the move the world has made towards digital, what omnichannel means for shoppers and why Tesco invests in digital entertainment, Clarke told the media summit “our industries are facing pretty similar challenges”, with digital media being at the heart of strategies.

“The word multichannel and other terms like omnichannel are bandied around a lot in retail, but my definition of it is simple.

“It’s about putting the customer in control, and enabling him or her to engage and transact with Tesco in whatever way best suits them – physically or digitally, transactionally or non-transactionally,” he said. “In an age where customers have more choice than ever in how to shop and who to shop with, loyalty is harder to come by, and easier to lose, than it ever has been.”

This ties in strongly to research out from Twitter earlier this month, which discovered that 60 per cent engaged with news providers on Twitter that they wouldn’t normally read in print, showing that loyalty is fickle in an online world.

Clarke suggests that creating a personalised experience for shoppers is the way to make shoppers stay with a brand, suggesting that the Clubcard provides a ‘unique advantage’ for the supermarket brand.

“43 million people around the world hold a Tesco Clubcard, and through the insight it gives us it means we can tailor our offer to best suit their individual needs. And we are fortunate that we own Dunnhumby, world leaders in the analysis of customer data. The insight they provide helps us understand our customers’ lifestyles, their needs and wants in a way few other retailers can.”

He went on to discuss why Tesco moved away from its traditional supermarket role and into the digital entertainment sector, which can be seen through the launch of tablet brand Hudl and the introduction of Blinkbox.

“It is a powerful way of engaging with customers,” Clarke admits, adding that it helps build a connection with customers and improve brand perception.

But Tesco is not the first company to make a side-step in what it produces, he was keen to point out.

“We are not the first company to recognise the strategic value of entertainment – iTunes drove Apple’s growth, while subsequently all the mobile phone operators have bundled entertainment to drive growth. In the USA, Samsung has introduced Milk Music, a free music streaming service with a library of 13 million tracks available for free on Galaxy devices.”

Clarke concluded by insisting today, it is no longer about products and ownership, it’s about services and access.

Comments

20 Mar 2014 - 22:44
billb10136's picture

Tesco is wise to move beyond the traditional appeals of the supermarket an in era when shoppers are increasingly in control and can engage when and how they want. It is now essential to offer a blend of attraction and experience in order to win the shopping trip and build an ongoing engagement for future business.

While a lot of the focus in the UK has been on the shift to ecommerce, our Brick Meets Click research with US shoppers reveals that all they really want to be able to do is to grocery shop using the influence of digital to help them. When they can do this with a retailer, they're much more likely to rate the store highly and give it a larger percentage of their business.

“High five” to Tesco for taking this visionary approach. There's no question it will pay big dividends.

Bill Bishop Chief Architect, Brick Meets Click

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