Like me, many of you have no doubt been glued to Robert Peston’s BBC series on the history of British retail. The last episode focused on the impacts of the digital revolution, but the overriding message has been that those retailers who innovate and continue to innovate have the best chance of survival.
The grocery sector featured heavily in the series and rightly so, pioneering many of the advances in retail that shoppers take for granted.
I was particularly struck by the comments of Sainsbury’s chief executive Justin King who said: “We think the mobile device, be it a tablet or be it a phone, used in store to help you do your weekly grocery shop, to help you plan recipes, to inspire you with your recipes and also help you manage your budget, is going to be a big part of the future.”
” A return to 90s innovation could prove the basis of Tesco’s revival”
We’ve discussed many of these developments in this column before, but King then went on to say that he thought all of this was “five to 10 years off”. This contrasted with the much more bullish attitude of his counterpart at Tesco, Philip Clarke who appeared next, asserting that: “We are in a new era the future store is the smartphone.”
And it appears that it’s not just rhetoric from Clarke. This week, Tesco revealed its plans for Hudl, its own-label tablet device that some analysts predict could be offered to consumers for just £99, significantly undercutting the likes of Apple.
While it makes sense for Tesco to want a slice of the fastest-growing category of electronic hardware, the move could be far more strategic.
It is expected that the Hudl devices will come pre-loaded with apps directing users to Tesco’s online store and the likes of its Blinkbox entertainment service. With control of both the hardware and software on the devices it sells, Tesco will have a huge head start in driving the in-store and at-home shopping behaviour that King predicts.
By subsidising the device, either at launch or in the future, Tesco will be taking a leaf out of Amazon’s book with its Kindle and Kindle Fire approach.
Lowering the price point will encourage a more mainstream consumer to try the device and the economic judgement will be that the subsidy will be repaid many times over if it encourages both brand loyalty and greater sales.
To think that all this is up to 10 years away perhaps ignores the lessons of the rapid change we’ve seen just in the past decade. Despite recent stumbles, a return to the innovation of the 90s for Tesco could prove the basis of its revival and again leave resurgent rivals like Sainsbury’s playing catch-up.
Daljit Bhurji is global MD of integrated communications consultancy Diffusion.
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