Creating an “emotional attachment” with customers is the challenge that faces retailers in a digital age, the chief executive of Tesco has said.
While that seems difficult to achieve in a world that now offers infinite choice to shoppers whether they live in remote villages or mega cities, said Philip Clarke, the data produced by digital technology now makes it easier to meet individuals’ needs. “We’re in a new era of retailing,” he said, “the era of mass personalisation.”
At the same time, however, the high street and stores remain important, he said. “This digital revolution does not spell the end of the high street,” he said, “or that investment in new stores is misguided. High streets change – they don’t die. People will always want to pop into a store on the way home, or to browse, feel and look at products before they buy them.”
Addressing the Consumer Goods Forum 2012 in Istanbul, Clarke explained how Tesco approaches its core purpose – “to create value to earn customers’ lifetime loyalty” in the context of changing customer trends. In a digital world, he said, there’s a growing group of ‘digital natives’ in whose minds there is no difference between a store, a website, a Tweet or an advert. Retailers must think as customers do, said Clarke, and that means seamlessly.
But despite the changes in the way people shop, “the customer is still king – his or her power has just increased. They still want simplicity, they still want convenience, and they are still drawn to brands that they trust, which are not merely relevant to their lives but thank them for their custom.” The challenge, then is: “how to build loyalty – and an emotional attachment with customers.”
Practical steps that Tesco had taken in the UK, said Clarke, included developing a more seamless service, bringing together apps with the mobile web into one app that enables customers to order online, find their nearest store, scan their Clubcard at checkouts, use their vouchers, and other shopping tasks.
Free wi-fi in stores will enable Clubcard holders to find the items on their shopping lists and get other suggestions and offers as they walk around a store.
In addition the store is evolving its Tesco Clubcard to offer a more personalised service. correlating purchase data with other sources of data, from social networking and mobile phone to payment methods, Tesco can now give a more personalised offer. Price sensitive customers, for example, can be shown Everyday Value range items while upmarket customers can see examples of its Finest range.
In Turkey, where Tesco is opening 70 new stores this year, it will also roll out the digital Clubcard and launch grocery home shopping. “This is proof,” he said, of how we are not merely sharing experience from around the world, but how markets such as Turkey will dive straight into the digital era.”
Philip Clarke’s three ‘truths’ of modern-day retailing.
Retailers must be guided by the customer, rather than technology
“Technology is a means to an end. Focus on the end first.”
Make everything simple
“Customers want convenience and simple processes don’t just save time and money but can be copied elsewhere.”
Build customer loyalty in “everything you do”
“Loyalty is rooted in trust. Trusted retailers will be those that do more than simply deliver value, choice, convenience. They will be those who engage in online debate, who welcome customer feedback, and who embrace the energy of social media.”