Tesco was back in the news this week, after Philip Clarke once again claimed that the grocer’s strategy will ultimately lead it to success – despite its third quarter like-for-like fall in sales.
Interestingly, his confidence is based, at least in part, on the its commitment to multichannel and the sales of its Hudl tablet in particular. It has already sold 300,000 of these devices so far, and expects that figure to double over Christmas.
Right now, consumers may know Tesco as the home of tinned tomatoes and washing powder, but the retailer’s long term strategy may soon change all that. As a consequence of the on-going development of digital channels, retailers like Tesco seem to be morphing into media companies that just happen to sell products.
All retailers should be taking a much more proactive, long term approach to opportunities like these, rather than simply reacting to the needs of their customer base right now. After all, e-commerce isn’t just about providing a channel for online shopping anymore; it is about controlling a multi-faceted media platform that can provide consumers with everything they need to run their lives, effortlessly and seamlessly.
Asos, for example, seems to have taken this path, transforming itself from an online retailer into a highly influential media company that happens to sell clothes. Not content with beating Amazon and John Lewis to the top spot for the most shared content on Pinterest, Asos has fully embraced the convergence between retail and media with clever email campaigns, a fashion magazine with a circulation of nearly half-a-million readers and a popular mobile app.
Red Bull is yet another example. Once thought of as just another drinks company, Red Bull has moved beyond simply sponsoring athletes and sporting events and is now making short films about them as well. The company has also launched its own music academy and online radio station. As a result, Red Bull has gone from being ‘just another drinks company’ to building a separate stand alone media company with 135 staff, and now regularly engages with its customers via mobile apps, print, web TV, web radio, newsfeeds and social networks, as well as video and even full length films.
At the moment, it may seem like Tesco is lagging behind, as its corporate strategy appears to include different constituent parts that are not as joined up as these other examples. However, that is a short-sighted view. By focussing on the customer engagement opportunities that the Hudl and similar devices can provide in the future, Tesco may get the last laugh as it continues to build loyalty, increase dwell time and boost sales in ways that other retailers haven’t yet imagined.
- Dan Coen, director, Zolfo Cooper
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