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A Lesson From Tesco’s Fresh & Easy: Do Your Customers Define Things As You Think They Do?

Jim Prevor’s Perishable Pundit, July 22, 2013

One of the most useful exercises in business is to make sure one is always using the language of the intended customer base. In all we wrote about Tesco’s journey to America as Fresh & Easy, one continuing issue was that Tesco never quite synced with the American consumers’ understanding and expectations regarding key terms.

With lots of research, Tesco understood that consumers wanted things fresh and wanted things easy, but Tesco never understood that to an American, with a Subway on every corner, sandwiches made in a commissary were inherently not fresh. Rotisserie chickens sold cold in a plastic bubble simply weren’t in the same category of freshness as rotisserie chicken served hot, with the birds cooking right before a customer’s eyes.

Same thing when it came to assessing the meaning of “easy.” Tesco assumed that the term referred to the in-store shopping experience, and for some consumers that may have been the preeminent question, but for most, it turned out that “easy” had to be evaluated in the context of their total day or week of shopping.

The small format of Fresh & Easy meant a smaller selection of product, and the heavy orientation to private label meant many of the favorite brands that consumers seek were not available at all. Together, these two facts meant that most consumers did not see Fresh & Easy as a viable alternative to mainstream supermarkets but, instead, saw it as a store they could use to supplement their purchases at mainstream supermarkets.

In effect, consumer perception transformed Fresh & Easy from a supermarket to a convenience store.

We thought about these “disconnects” as we recently saw an independent drug store in Manhattan making its pitch:

This happens to be a nice little drug store with nice people working there. But, even assuming the “same price” claim is true, do they really provide better service?

They may well provide friendlier service and to some, say the elderly, free delivery may be a big plus. But to many consumers, the things they consider important when it comes to service are at the chain drug stores (Duane Reade is owned by Walgreens now). For example, 24-hour stores or the ability to drop off a prescription uptown and pick it up at work downtown or the ability to transfer prescriptions between their winter home in Boca or summer home in the Hamptons.

During our visit to Manhattan, we needed a prescription filled and went to CVS because it was after dinner and it was the nearest 24-hour pharmacy around.

Hopefully Turtle Bay Chemists will do well, and this is smart marketing attempting to emphasize its strengths. But hopefully all of us will have a laser-like focus on what our customers really value.

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