Consumer behaviour is undergoing the biggest generational change since the 1960s and only retailers that adapt will survive, according to Tesco boss Philip Clarke.
In an editorial for The Telegraph, group chief executive Clarke said: “The digital world is having a deep impact on emerging consumers.
“Just like the 60s, retail will evolve to meet the needs of the new consumer. There will be new retail led by people who are leaving school or starting college this year. There will be retailers that fade away because they don’t or can’t adapt and their customers desert them. The remainder will be those who adapted successfully.”
Clarke said successful businesses evolve by understanding their changing market and choosing the right time to move from their existing business model to a new model.
He said: “The trick is all in the timing, knowing when you will need to change, preparing early but not switching too soon so you lose your existing customers.”
“Tesco is preparing for the changing environment, for what this new generation of emerging customers will mean for our business, and we are ensuring that we have the right business waiting for them. At the same time, our business must still serve older generations, too, by which I mean everyone over 21.”
He cites Blinkbox, the digital entertainment business it bought in 2011, which allows customers to stream music, movies and, as of next month, books as an example of how it is aiming to serve the next generation of shoppers.
“What we build today has to serve customers leaving school so we need to make sense to that generation now. Wait until they’re grown up before we build it and we’ll be too late,” he said.
Clarke said that Tesco had brought new faces into the business to help it understand the emerging consumer and said it is one of reasons it is sponsoring a technology entrepreneur incubator called Rainmaking Loft in London.