Why was Tesco so successful in the past? What is Morrisons doing now? The recipe for success is to focus on the customer.

Ten years ago Tesco could do nothing wrong. In fact its biggest challenge was coping with growth. It put customers at the centre of everything while its competitors kept trying to keep costs down at the expense of treating customers well. Tesco only started to decline when it began to treat customers the same as their competitors.

Now Tesco is being revitalised by a renewed focus on what customers really care about. Several of their competitors think that it’s just price – it’s not. Dave Lewis is focusing on all of the things that are most important to customers.

Tesco tactics

One of the key executives at Tesco when it could do no wrong was David Potts. Now that he’s taken over running Morrisons, it’s very obvious that he is implementing the same customer-focused formula that made Tesco so successful in the past. As he looks round the business, he’s asking one question: “How can we make this better for customers, easier for staff and cheaper for Morrisons?” He wants any changes to meet all three criteria.

The most obvious of those changes is to stop using Morrisons Intelligent Queue Management system in its stores. The system was used to determine how many checkouts to keep open using infra-red sensors that identified how many customers were flowing through the store.

Morrisons had a poor reputation for queues and shoppers and staff disliked software telling them what to do when their experience told them that a different action was required. Taking it out will make things better, faster and cheaper.

Focusing on costs not customers, Morrisons had used ‘scan rate’ technology which measures checkout staff’s performance by calculating how many products they scan per minute. Not surprisingly, customers hated being rushed and either bought less or shopped elsewhere. Now staff will be mainly measured on their level of personal service and teamwork.

Store visits

I have no insider information, but I suspect that Potts will copy another tactic used by Sir Terry Leahy at Tesco. Leahy did unannounced store visits on a Friday and at Monday’s management meeting, he pointed out all of the bad things that he had discovered – an uncomfortable experience for his management team.

So being smart people, they went out and did store visits on Thursdays, getting things fixed quickly before Leahy visited. As you might guess, their managers then copied the approach and did store visits on Wednesdays. The net result was that stores were kept in very good shape.

It would be great to see Tesco and Morrisons back making things better for customers and easier for staff. Watch this space.

  • Malcolm Wicks is marketing director at Pierhouse Business Solutions Ltd