Telepocalypse

Supermarketed

OK, I promise to stop soon. But first here are a few last thoughts on UK supermarkets and how this applies to telecom…

First, there is a virtuous circle in the launch of a loyalty program tied to a cross-sell initiative. The more people bought £400 TVs and £600 insurance policies at the supermarket, the easier it was to accumulate lots of points, and the more attractive it was to come to Tesco and expose yourself to the cross-sell pitches. Tesco had transformed themselves from “we supply food” to “we supply the things you need to run a home”. Maybe those telecom shops need to change from “we sell phones” to “we sell the things you need to stay in touch with your world”.

Secondly, it’s staring us all in the face, but there was no one single strategic magic bullet. Tesco had to simultaneously out-execute their competition on multiple fronts. Only many co-ordinated actions led to market success.

A final anecdote. Tesco and Sainsbury’s both have a low-end sub-brand for loss-leader products. Sainsbury’s dub this their “economy” line, and have plainly-printed packs of economy orange juice, economy pasta, etc. Tesco used the moniker “value”. The work “economy” sounds to me like you’re going without, “economising”. Contrast this with “value”, which sounds like you’re getting more than you’re paying for. So of the 5 Ps of marketing, the correct “postitioning” of a product clearly matters. As we move towards VoIP products that (for now) compete on price rather than functionality, something to bear in mind.