Tuesday 13 October 2015

Tesco's Price Promise revamp: simple, immediate, and a fair–share pointer for retail and supply?

Deep down, Tesco’s 5-point Brand Guarantee breaks some new ground for all stakeholders:
  • Instant discount at checkout – eliminates frustration of delay, next time memory-lapse, sense of lock-in
  • Own Label exclusion – eliminates difficulties of true like-with-like comparison of brand and ‘equivalent’ own label
  • Minimum 10 item basket: attempt to re-encourage ‘bulk’ shop?
  • Large stores + online only: Fine for once/week+ shoppers, but is it enough to re-attract daily, closer, smaller shoppers?
  • Only Big 4 match: Eliminates price as a differentiator vs. other mults in large space, but still at a price disadvantage to the discounters
The Big Issue will be the extent to which other mults target large space as a separate market, competing via other parts of the retail marketing mix (see slide for options), but maintaining price parity….  However, if other mults break ranks and drive down prices, the appeal of large space retail may grow, at the expense of the discounters.

Meanwhile, Tesco’s move demonstrates a major step forward in transparency at point-of-purchase, the beginnings of a fair-share dialogue with the savvy consumer that will hopefully encourage other mults to follow suit, with branded suppliers perhaps adding a little more than expected to the tin to cement the process…

…and fair-share supplier-retailer dealings an added bonus? 

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