Following the success of its low-cost Hudl tablet in 2013, Tesco is back this year with the news it is to launch its very own smartphone.
Strategically, one can assume that Tesco launching a smartphone is centred around a desire to capture consumer data. It is also pinning hopes on more of its value-led consumers buying this device and then starting to use more and more of the Tesco applications such as Blinkbox, Scan as you Shop, Tesco TV and Click & Collect. Arguably, this is exactly what Hudl was all about, and it seems this was a great success for the retailer.
Today, the biggest single challenge faced by Tesco et al is how to manage the convergence of the online and bricks & mortar worlds. It’s something the industry is largely failing at. Yet the ability to provide consumers with a seamless service and experience across all channels is critical - and the smartphone could be a way for Tesco to advance along this path.
The reality is that we no longer live in distinct silos such as ‘manufacturer’ and ‘retailer’ - instead brands lead the way, each having an ecosystem that needs to be properly maintained and into which consumers must be drawn and nurtured. Brands have to work hard at creating and maintaining their ecosystem by building a meaningful relationship with consumers.
For longer than most of us can remember, Tesco has been more than a grocer - it’s a general retailer that sells all kinds of products through all kinds of channels. When a company finds itself in such a situation, being lots of different things to different people, it’s the brand that holds everything together, and despite falling profits and some interesting failures mixed into its long list of successes, Tesco continues to be a strong brand.
It has achieved this by having a strong goal - of making aspirational products accessible to all - and by building a meaningful relationship with its consumers.
The Tesco smartphone fits perfectly into this brand strategy - and, good news for Tesco shareholders - it could well be a great weapon with which the UK business can regain the territory lost to the discounters.
Paul Shields is senior strategist at global brand agency 1HQ