What the customer wants: Follow the lead of successful retailers tesco and asda

Success stories don’t come much bigger than Tesco, but did you know that by the end of 2006 Tesco will overtake ARG (owners of Argos and Homebase) to become the UK’s number one in non-food retail sales?

It seems unbelievable a supermarket would be top, but we will hand over £6 billion to Tesco on non-food items this year. The key to success The man behind this massive rise to stardom is Chief Executive, Terry Leahy. He worked himself up the ranks. Primarily he’s a marketing man, in fact, the position of Marketing Director was created for him when he first joined the board. His skills in marketing are well documented, and many of his achievements are legendary, for example, the one-in-front scheme, Tesco Clubcard and online shopping. In the late 1990’s Leahy introduced online shopping, now Tesco online is the biggest dotcom supermarket in the world. It’s clear everything he does is with customers in mind.

Last month it was reported Tesco will launch a new range of ‘generously-sized’ clothing for men next spring. This was in response to a letter addressed to the Chief Executive. Leahy wrote back to the customer, Mr Pettit and after a phone call, asked for his advice on the new range. Leahy even sent samples and asked for comments and criticisms. Expecting a standard customer services letter Mr Pettit was stunned by the personal response to his letter and Leahy’s attention to detail but it’s indicative of the way Leahy responds to customer needs.

The rise and rise of Tesco has been fuelled by customers needs. We wanted more, and that’s what Tesco gave us. For most of us there’s no difference buying a loaf of bread or a widescreen TV. We like to shop where we feel safe. We know if something goes wrong Tesco will help. After all, there’s a customer service desk at every store where you can talk to someone who’ll bend over backwards to sort out problems.

Great minds think alike

Wal-mart founder, Sam Walton understands the importance of customers too. Wal-Mart, owner of Asda, is the biggest worldwide retail operation employing over one million people in the US alone. Walton says: ‘There is only one boss, the customer, and he can fire everyone from the chairman down, simply by spending his money elsewhere.’ Tesco’s roots are in greengrocery and today the core business is food retailing. But as Tesco built up trust with customers, it was able to offer additional products. The fact that by the end of the year Tesco will overtake ARG in non-food retailing shouldn’t come as a surprise, we know looking after customers works.

Without building up trust with customers this expansion into new areas doesn’t work. The core business can’t be compromised by the new products or services. Tesco didn’t rip out all the bread shelves and replace them with mobile phone displays, it added new products that sat next to the core business and grew from there.

Diversify or else

Unlike food retailing we have no choice but to diversify as our core market nears saturation. It’s a changing market and we need to bring new products to fill the sales gap. For those who haven’t added new products and services the outlook is bleak. 267 fabricators disappeared in 2005 . The numbers are indicative of a changing market.

Some have shut up shop, while others are doing well. These are the ones who look after customers needs. As the domestic replacement market nears saturation, the importance of new products and markets rises. Conservatories and commercial work are two areas where customers are doing well.

Synseal too has added new products. We listen to our customers and bring new products to keep them ahead in the market. Customers needed to diversify and conservatories are a perfect fit for many fabricators and installers. But it’s not just the big things, in the last six months we’ve added a hardware range, five new colours and a low pitch roof system to make life easier for customers, and we continue to improve service – now roof kits are available in just three days. And for commercial customers we’ve added new marketing materials. We constantly look for ways to keep customers ahead in the market. Or as they say at Tesco, ‘every little helps!’