In an industry grappling with big data, price matching voucher schemes, online delivery etc, Tesco ’s Christmas ‘festive five’ promotion was refreshingly, memorably, disruptively old-fashioned. Five vegetables - potatoes, carrots, sprouts, cauliflower and parsnips - on sale for 49p.
Hardly rocket science, yet what an impact it appears to have had: capturing the imagination of Tesco shoppers with its sheer simplicity, Christmas trading improved markedly. And the same ‘less is more’ insight informs its latest price promotion. Instead of the usual blizzard of penny-a-piece promotions (eg The Big Price Flop of 2011 , or the thousands of discounts in Asda ’s latest ‘Biggest Ever Rollback’), Tesco has focused on delivering meaningful, memorable savings on just 380 popular branded lines. It has had an immediate impact on consumer perceptions.
But Tesco is taking this less-is-more thinking an awful lot further. As we’ve already reported, CEO Dave Lewis has vowed to cut out all the daily argy bargy over so-called ‘commercial income.’ And today The Grocer can reveal more details of a September reset of the Tesco offer, which will see thousands of products delisted, and in-store displays aiming for an easier shopping experience.
This simplification is likely to have enormous repercussions. And not just on suppliers . As we reveal, Tesco is laying off hundreds of buyers. It’s even outsourced its range rationalisation to a management consultancy. But I also suspect this will have a significant impact on Tesco’s rivals. Why? Because it works.
A famous behavioural experiment in 2000 was able to prove you can have too much choice (or, in the case of the experiment, jam).
In the experiment shoppers encountered a tasting booth that displayed either a limited range (just six) or an extensive selection (varieties) of different flavours of jam. In the first (jam booth) experiment consumers appeared to be more attracted to a tasting booth that offered significant choice, with 60% of customers stopping at the booth with the extensive selection. However, significantly more shoppers purchased a jar of jam when presented with only the limited selection compared with an extensive range (30% versus 3%).
But the experiment merely repeated a real-life exercise undertaken on a far larger scale by Archie Norman and Allan Leighton at Asda in the 1990s. They stripped out 20% of the range. And in doing so they found customers not only thought Asda’s range had actually increased, they put more items in their shopping baskets.
Steve Jobs once said: “Simple can be harder than complex. You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” As Apple announced the largest ever profits in a single quarter, its secret remains the same: to distil enormous complexity into devices that convey and deliver not only desirability and cuteness but an intense and mountain-moving simplicity.
The same thinking evidently instructs Tesco’s reset. It’s big and complex. But if it can make shopping simple again, who knows how far it can go.