tesco reset

News that Tesco is culling its number of products on shelf by 30% will be chilling for brand owners. While a lean range is nothing new for the discounters, Tesco’s range will fall from 90,000 to 63,000.

For brand owners, the challenge is to identify their relevant point of difference versus the competition in order to survive in this environment. Cutting choice might reduce costs, but might also risk a major shift in retailer brand loyalty, and not necessarily to Tesco’s advantage. Choice of brand after all is an expression of our individuality, and without it, the supermarket could end up a pretty bland, price-driven world.

We know consumer choice is not driven by rational factors, such as price, alone. Emotional response is far more influential and affects our behaviour unconsciously. It follows that brands able to elicit emotion are more effective. The way to do this is through creating a brand idea, with meaning over and above product attributes. This generates an emotional rather than rational response and makes it easier for consumers to identify, recall and, more importantly, put a brand in their shopping basket. Meaningful brands are those that consumers remain loyal to and are willing to pay more for.

Where brand leaders may be hit is with a reduction in their current portfolio, especially with the trend of brand extension. In recent years we have witnessed brands diversifying beyond their core - often at the expense of their original point of difference.

Savvy brands will be considering how to redefine their ranges to bolster their chances of survival, just as Twinings’ Greens/ Infusions exercise in simplifying its product range better differentiated the brand.

Whatever the outcome for brands in Tesco, it’s going to be both a challenge and opportunity to create a meaningful brand idea in the face of a less inspiring retail landscape. Brands must focus even more on what makes them desirable - and that can never just be price. Brands, as ideas, need to become more differentiated and relevant, not better or cheaper. Tesco might need to learn the same lesson.

Avril Tooley is client services director and partner at BrandOpus