Bloomberg has an interview with embattled Tesco CEO Philip Clarke in which he says that after three years of declines in revenue, profits, share price and market share, he believes that the best way to turn things around is to emulate the likes of Amazon and Apple, rather than discounters like Aldi that have been making his life miserable.
According to the story, "Rather than battle retailers like Aldi on price, Clarke is modelling Tesco on the tech giants, building a digital one-stop shop centered around its Hudl tablet that includes everything from movies to banking. A smart phone will join the stable later this year. The aim? Lock in customers by incentivizing them with loyalty points to buy everything from mortgages to grapes from the Cheshunt, England-based retailer."
Clarke says, "“I see competition emerging from non-traditional retailers and I watch all of them … I’ve always been impressed with Amazon” and its execution.
According to the story, "Rather than battle retailers like Aldi on price, Clarke is modelling Tesco on the tech giants, building a digital one-stop shop centered around its Hudl tablet that includes everything from movies to banking. A smart phone will join the stable later this year. The aim? Lock in customers by incentivizing them with loyalty points to buy everything from mortgages to grapes from the Cheshunt, England-based retailer."
Clarke says, "“I see competition emerging from non-traditional retailers and I watch all of them … I’ve always been impressed with Amazon” and its execution.
- KC's View:
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There are a lot of moving parts here, and I have no idea whether Clarke can make this work - online sales in the UK are a small part of the whole, and he may not have the time or the room to achieve the kind of change he needs to get in order to get Tesco headed in a sustainable and positive direction.
That said … I always have believed that it is folly for Tesco to try to out-discount Aldi or Lidl. It traditionally has stood for something else - sharp prices, but also a compelling, relevant offering that made its stores the first stop for many UK shoppers. Clarke has to clear away the clutter and redefine the path of least resistance between Tesco and its shoppers … which isn't nearly as easy as it sounds. It is, however, critical to being competitive.
