Retail is a cut-throat, competitive and unpredictable environment, but it really isn’t any different to all business because generally the rules for success are changing in all industries and markets around the world. I am just using retail as an example of how unpredictable success can be; and how quickly any kind of failure can be communicated around the world, because Tesco, the star of retail, has recently posted a decline in UK profits for the first time in 20 years. How could Tesco post a decline in profits? The darling of a successful loyalty program, the brand who really understood their customer’s needs, the retailer who made a plan when Bangkok flooded. Tesco, the company who has exponentially grown their market share in the UK, Europe, America and Asia in the last 15 years, the wonder-kids of the super-market world.
Tesco have always been innovative. If you listen to Tesco’s chief executive, Philip Clarke, talking about their plans to ‘step up their UK game’, their plans are impressive. Firstly, Tesco plan to inject one billion pounds into upgrading their stores and services. What they intend on doing is implementing a six-point plan:
- To provide better service
- To improve the store formats to enhance the in-store experience
- To focus on value for money with their products
- To provide a better range and quality
- To improve their branding, marketing and communication
- To bring together the ‘clicks and bricks’ strategy, which is to say, provide a multichanneled business strategy
A lot of this plan is already happening. For example, Tesco has just launched their new ‘everyday value’ range, which is now the cheapest, entry level product range. This means that they now have a four-tiered range of products with four different price offerings attached. Critics of this are arguing, however, that this has resulted in customers not knowing whether the Tesco brand is a cheap store (and a competitor to Asda, for example) or a more exclusive, expensive store, like Marks and Spencer.
But at the same time, what Tesco are also saying is that they want to become even more costumer-focused, and really listen to their customers, which everybody should be doing. Tesco even want to go so far as to adapt their stores to local markets, supplying different products or services, depending on the local needs, so really ‘personalising stores’ as Clarke said.
Tesco also intend on investing heavily on digital assets. They are very aware of the need for multichannel marketing and have taken into account the impact that the Smartphone, in particular, has, and will continue to have on changing customer behaviour. Tesco have successfully created a Tesco App, where customers can order on their phones and collect their groceries from their local store inside 24 hours. This is known as their ‘click and collect’ offering. Amazingly, most of the population of England live within a ten minute drive of a Tesco store. Tesco also have a delivery service, because as Clarke said, their focus in ‘doing the right thing’ is all around showing customers that they really care.
Why then have people tweeted the following about Tesco:
“u can spend £1bn polishing a turd but its still gonna be a turd. Invest in their customers, lower their prices and we will shop”
“Tesco got really expensive all of a sudden. And its home delivery service was useless! Never again!.. plus Tesco stores feel really dated now, and their carrier bags are really thin and tear easily!”
“Too many items permanently ‘unavailable’; staff so busy they don’t have time to be helpful to customers; stores a bit grubby.”
Why did Skynews report that Tesco can’t decide who their market is? Why is Tesco’s UK profit dropping? This all seems so contrary to Clarke’s message and intentions.
Perhaps sometimes, we have grand plans, because we know what is going on in theory, we have a vision, we are innovative, we are ahead of the trends, and we are aware of market change, but we don’t know how to actually implement these plans.
Success in business today involves the balance between understanding that the world is changing, understanding that the workplace is changing and understanding that the workforce is changing. But it is also having a practical, workable and applicable action plan to cope with that. TomorrowToday can help you build a customised leadership development programme to deliver just that kind of action plan, where not only your top leadership is engaged, but everybody in your environment is challenged to think, feel and behave differently, because only when that happens, will you be building an organisation fit for coping with the fact that the rules for success are changing.