At Business Schools around the world, students are presented with a Tesco case study, either looking at The Tesco Wheel, Club Card, international expansion strategy, on-line platform or even their real estate strategy.
But for me, Tesco has a problem. It is unable even to get the basics right, and when you can’t get the basics right, no matter how far you cut prices, customers will migrate.
All relationships are based on trust, whether social or transactional. Sometimes, without fault, trust can be challenged, but through communication and dialogue, this can be sorted. On an occasion where there may indeed be genuine fault, ultimately an apology can repair that trust.
Within supermarket retail, loyalty is functional: the customer knows what they want, the retailer delivers it efficiently and the transaction is mutually beneficial. Within Tesco this trust exists through generations.
Tesco holds a competitive advantage within UK land based retail. It has more stores than any of its rivals (3,146) and if we believe that shoppers traditionally make their purchases through the stores based on convenience, Tesco are in a very strong position.
But the ground is shifting.
IMRG estimates that the UK’s online retail market in 2012 was valued at £78bn and retailers have to be sharp and smart to deal with the threat of new players. Asda, the second largest retailer in the UK (and arguably price leader) has committed £700m into a same-day delivery service.
But, where is Tesco?
Tesco is currently breaking the sacred bond of trust that has existed through generations between customer and business, by breaking their promise and not delivering on their proposition.
A bit harsh?
Not really. The biggest challenge to retail is online and Tesco are way behind the game.
My experience of a failed delivery, tells the story.
Obviously Tesco Delivery turned up close to 19.00
- Nobody was there.
- Nobody called me.
- Nobody left me a text or email.
- I called Tesco to arrange redelivery this morning.
- Nobody called me back to arrange a time, which was what was offered.
- I emailed Tesco.
- Nobody emailed me back.
- I called Tesco again and was told my order had been cancelled and I would be refunded in 3 days.
A lifetime of trust gone in 24 hours.