Tesco has insisted it will look to improve the way it works with food brands online as part of a new “era” at the UK’s largest retailer.
Andrew Miles, Tesco’s online marketing director, told brand owners at the IGD’s Online Grocery Retailing Conference the retailer wanted to “collaborate” more with suppliers to take advantage of increasing consumer interest in the channel.
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“I am very aware it hasn’t always been as easy as we would like in the past but, as we move into a new era at Tesco, I am determined to make it easier for you to work with us and for us to do more in sharing our ambitions and resources,” he said.
Tesco has ploughed GBP1bn into revitalising its UK business, with investment going into stores, product ranges and staff. However, the retailer has put more attention behind its multichannel business, with CEO Philip Clarke speaking often about the importance of harnessing the growth of the online channel for the company’s growth.
The UK’s grocers are building significant multichannel businesses to tap into a market growing at 15% a year. Sales were at EUR7.1bn last year, according to IGD data issued this week and are forecast to hit EUR13.7bn. When Morrisons launches its own online food offer in January, the UK’s big four food retailers will each provide home delivery, with Waitrose and Ocado also having the service.
Brands, however, have found it a challenge to tap into the potential of the growing online grocery market despite data showing consumers can be more brand loyal online.
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By GlobalDataAt the IGD conference this week, Tesco, which accounts for around half of the UK’s online grocery sales, was among a clutch of retailers claiming to offer advice to brands about harnessing the growth of the channel.
Miles said brands needed to think about the “basics” of working with retail customers and of showcasing products online.
“The most important thing is to start with a plan and plan for growth. We need you to engage with our buying teams, use the Dunnhumby data to really understand our and your online customer and build online as a specific channel in your joint business plans with us,” Miles said. “This is crucial for co-ordinating plans for range launches, product data and building plans but also really important to make sure your work with us is joined up.
Tesco’s data arm Dunnhumby analyses data – it helped the retailer establish Clubcard – to give its parent and suppliers the ability to monitor what consumers buy and their purchasing habits.
“Second – and probably the most important thing is – don’t forget the basics. I am amazed sometimes we let oursleves down by putting products onto a website with no images and sometimes we don’t have product information on the website. Get the basics right. Once we’ve got the basic products set up right, there’s lets of opportunity to trade the channel.”
He added: “Bring us your ideas and I really hope the spirit of collaboration that we internally are trying to generate will allow us to work woth you more.”
