Tesco has been a marketing-driven company ever since Ian MacLaurin (now the Baron MacLaurin of Knebworth) took over as boss at the end of the 1970s.
MacLaurin ditched the old Green Shield trading stamps and ‘pile it high, sell it cheap’ ethos along with its old ad agency Saatchi & Saatchi to move firmly upmarket with new agency Lowe Howard-Spink. Tesco still resides at Sir Frank Lowe’s start-up The Red Brick Road.
His Lordship, and his successor Sir Terry Leahy (who was the company’s first marketing director), have been tactfully quiet about the UK’s biggest retailer’s current misfortunes, seeing Christmas sales drop, the share price plummet 16 per cent at one stage and its overall market share slip back for the first time in decades. MacLaurin will undoubtedly have a view, Leahy wouldn’t be human if he didn’t think some of this was his fault.
As it is the man in the hottest seat is Philip Clarke (pictured), another former marketing director, who took over from Leahy as CEO a year ago. But Richard Brasher, who Clarke promoted to be UK CEO, and marketing director Carolyn Bradley, a Tesco lifer, will be having their bottoms warmed too.
The Red Brick Road CEO Paul Hammersley will be worried too, unlike former Tesco account director Karen Buchanan who, wisely as it turns out, departed to be CEO of Publicis London last March. At the time we speculated that one of her jobs might be to attract a big supermarket client to replace Asda (now at Saatchi & Saatchi, also owned by Publicis Groupe).
Clarke’s big marketing idea for the UK business was ‘The Big Price Drop,’ a promotion delivering a supposed £500m in price cuts. Unfortunately the public didn’t believe him, preferring, as he himself admitted earlier this week, to be seduced by tactical money-off coupons from other retailers.
But Tesco UK (let alone its struggling Fresh and Easy operation in the US) has bigger problems than a misfiring promotion. Its stores look tired, it doesn’t haven’t enough staff in key locations (as we pointed out earlier this week and Clarke himself confirmed) and its marketing and advertising is moribund.
In a way one of its problems is the huge success of its Clubcard loyalty cum data gathering programme. This magical invention turbo-charged its UK growth, leading the management to believe that Clubcard could take care of all its marketing. All the agency had to do was produce price and offer ads (which it has done quite stylishly) while reminding us that ‘Every little helps.’
But it’s hardly rocket science to realise that supermarkets are a great place to gather data. Sainsbury’s now tells you at the till if you’ve paid more than you would at its rivals and gives you a instant discount, leaving some shoppers bemused about why it’s bothering to give them a penny or two back. But it’s undeniably good PR.
And Tesco hasn’t run a proper TV campaign since it pensioned off Prunella Scales (‘Dotty’) and Jane Horrocks in 2004 (see below). Meanwhile Sainsbury’s profited mightily from the ubiquitous Jamie Oliver and even posh Waitrose (which now matches Tesco prices on 1,000 lines) spent mightily on Delia Smith and Heston Blumenthal. ‘Every little helps,’ although an excellent campaign for many years, just became a case of ‘Too Little.’
So messrs Brasher, Bradley and indeed Clarke need to get themselves down to TRBR HQ in London’s Beak Street to try to recapture some of the marketing fizz and vim of old. But will they?
Sir Frank Lowe, now retired, built up a formidable relationship with Leahy, although the two could hardly be more dissimilar personalities. There were two things about Frank (pictured): one was that shoddy ads made him positively ill and, two, he was the boss so he insisted on seeing the boss of his clients, however rough, tough and all-conquering they thought themselves. This didn’t always go down very well with marketers lower down the food chain (who probably found Frank terrifying) but it worked.
Does Hammersley have this relationship with Tesco? Would Clarke, or indeed Brasher, welcome it?
But there are too many top people at Tesco who’ve always been at Tesco. MacLaurin and Leahy were willing to listen to good external advice. That’s the real challenge for Clarke as he seeks to leave his own, positive, imprint on the UK’s biggest retailer.