Friday, 20 February 2015

The Tesco Cull - where does this leave product innovation?

Time was when getting a new product listed had to overcome the ‘we don’t have rubber-shelves’ barrier, allowing us to put forward a magnanimous offer to cull one of our current lines that was patently well past sell-by…

The key difference now is that the shelf is also being ‘shortened’…by up to 30%, to be precise…

This puts us in a whole new ball-park, given that one part of Tesco (via a third party) is busy finding ways of eliminating current lines /categories, seemingly without buyer intervention, whilst the buying team are presumably attempting to operate in a ‘business as usual’ environment..?

In other words, a new product now needs to represent a spectacular leap forward, in order to make a real difference. Moreover, given that the emphasis in Tesco will be on front margin, the usual trade investment package will carry less weight.

This means that the product will probably have to succeed elsewhere, i.e. via one of the other mults, proving that it deserves a place in the market, in order to enhance its Tesco-appeal, but at the same time denying our No 1 retailer the traditional innovator’s advantage… 

Hopefully, these mental gymnastics will help NAMs to think fundamentally about the meeting of real consumer need, better than available competition, and allow them to refine a bespoke trade package that really stands out in the marketplace, and proves it in practice…

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