Providing a great cross-channel experience is of course one of the key challenges retailers face today.It is easier said than done though.A good example of these challenges is the integration of the world of e-marketing (i.e. attracting people to your website/store) and merchandising (i.e. what you buy/hold and offer to your customers).[Read More]
This week photos and video have emerged that demonstrate a unique idea from Tesco's Home Plus brand in South Korea for generating sales in the real world away from their stores. They used billboard space in public places like train stations to create ‘2D’ shelves to advertise their products. Beside each item is a QR code which commuters can scan with their mobile phone to add the item to their online shopping basket. On the surface, this looks like an excellent PR gimmick, but underneath is a very sound business strategy.
Tesco came up with the idea when facing the challenge of trying to become the number one grocery retailer in South Korea without having to open new stores. In order to do this, Tesco needed to increase footfall to their stores and boost online shopping.
By creating virtual shelves on billboards in public locations, they’ve essentially taken their store floor to the commuters. Store footfall is increased by proxy, as commuters are ‘browsing the aisles’ while they wait for their train, and online shopping is boosted by the mobile shopping apps scanning the codes.
We’ve talked about QR codes before, and have used them ourselves to promote our microsites and social media profiles in the real world. The beauty of QR codes is that they can be customised to either have one per SKU, or even one per item in each advertising location, which can be tracked to analyse exactly how each item in each location is performing using simple online traffic analytics.
By pioneering this approach, Tesco has achieved three important goals:
It has produced a very original and exciting viral advertising campaign
It has created a useful source of detailehd product analysis in the QR codes
Most importantly it has found a way to boost the bottom line without a significant increase in overheads or taking the risk of opening new stores in areas with strong competitor saturation
This is an excellent concept and is likely to drive the adoption of more direct selling methods through display advertising, and will make a lot of business that are trying to find ways to boost sales without increasing costs sit up and pay attention to the opportunities of cross-channel retail.
So much happens at the Oracle Retail Week Awards that it is often difficult to take it all in on the night. Yesterday, I found myself recalling Sir Ken Morrison's comments about Sir Terry Leahy, and in particular, his description of Leahy as "the greatest businessman of the late 20th and early 21st century" as he presented him with the Retail Week Lifetime Achievement Award.
This is a big statement. There is no denying Leahy's achievements at Tesco, the legacy he leaves behind and also the impact this has created around the world. Sir Ken referenced the Clubcard as one of the key successes of the era and indeed Leahy himself sees this initiative as the enabling factor that drove the customer to the heart of the Tesco business. Developed while Leahy was Marketing Director, Clubcard has been influential in maintaining Tesco's stance in the number one position and has been copied to less effect throughout the world.
Another element of Leahy's legacy that stands out for me is the retailer's impressive international expansion, with the Tesco Operating Model at its foundation. By no means is this a unique offering - several retail organisations utilise a common set of technologies and applications upon which they manage their businesses. However, the Tesco approach has been to be very specific in identifying the very best set of solutions for particular aspects of their business. Tesco worked hard to create a model that was able to work locally from Turkey to Thailand. Much has been made of Tesco's ability to identify emerging markets and develop the Tesco concept successfully within these countries but the Tesco Operating Model is a key element of this success. If you don't get the HQ, DCs and stores working effectively, your business will fail. If you can't get the right product to the customer at the right time, you lose a sale and sometimes that customer's business. Serving a global customer demands a business to have truly global process and technology.
Leahy's successor, Philip Clarke in his previous role as IT and International Director was influential in ensuring that the Tesco Operating Model was implemented to great effect. It will be interesting to see over time how retail businesses seek to copy the Operating Model, as they have done the ClubCard. It is too soon to speculate on what Clarke's business legacy will be. Putting the customer at the heart of business is a lesson that every company can learn from Tesco. Creating a truly global business for a global customer is where Clarke's international and technology skills give him a real edge as a forward looking businessman for the 21st century.