UK grocery company, Tesco, has decided to pull out of their American Invasion and take a $1.8 Billion write-off (with the favorable UK exchange rate – only 1.2 Billion Pounds – it still doesn’t soften the blow of the astounding loss.) Tiffany Hsu’s LA Times article points to Tesco’s misunderstanding of what the public wants and the dire consequences of trying to compete with the Wal-Marts, Costcos, Trader Joes and the like. If Tesco believed those were their competition, their analysis was very off – regardless of recession or not. Tesco saw themselves as something they were not – and in America, it’s foolish to think that customers will save bad branding by finding the hidden gems behind whatever facade is presented. Any way you slice it, its unfortunate that Tesco’s invasion of the American market was dead on arrival.
It had a lot more to do with branding, design and store locations than what Americans do or do not want. Admittedly, my exposure is limited to their locations in the Los Angeles market, but it quickly became very clear how Fresh & Easy was positioned counter-intuitively and ineffectively.
The first store I visited was a huge space on heavily trafficked tourist destination Hollywood Boulevard. It was large, dark and depressing. Another location was also in midtown on a heavily trafficked car artery with no abundance of parking spaces. And the last one I was in a week ago was probably the best model of what they should have been doing all along – a small, bright and colorful store in a heavy pedestrian area near USC.
Beyond their questionable locations and early dreary decor, they should have positioned themselves as the perfect last minute spot to pick up quality prepared meals and sundry items on the way to work or on the way home for dinner. They couldn’t/shouldn’t have felt they could compete with the established big markets.
The article compares them to a Wal-Mart, but Tesco should have positioned Fresh & Healthy as more akin to a refined and healthier 7-11 – like their own Tesco Metros back in the UK. That healthy option would have been the right aspirational touch – especially in Southern California.
Fresh & Easy might have worked if they had stronger positioning. It seems they were even unclear on who they were meant to be. Because of that, their marketing never worked. It’s a shame, because if you look at their location near USC, they could have focused on smaller spaces in higher foot-traffic (or more easily accessible) areas to create something akin to the Marks & Spencer Simply Food product in the UK. Another similarity to M&S in the USC location was the automated tellers that allowed staff to be focused around the store to help out in ways you certainly don’t see in a 7-11.
The promise of getting in and out of a market in five minutes with inexpensive essentials and healthy prepared meals would have been something that might have made it a success.
Short of that, its another example of a move that a company should have never ventured in the first place. Or, its an example of a good thing that never had the required clarity and forethought to drive success. Fresh & Easy is Dead. Long Live Fresh & Easy.
Posted in Ruminations
Tagged Branding, Communication, Competition, Consumers, Costco, Fresh & Easy, Grocery Stores, Identity, LA Times, Location, M&S, Marketing, Markets, Marks & Spencer's Simply Food, Research, Strategy, Tesco, Tiffany Hsu, Trader Joe's, UK, USC, Wal-Mart
USA Today filed a report on hotels and their “new” quest to engage teens and pre-teens with programming and other benefits to build early hotel loyalty. The quest is all fine and good, but USAT assumes that the marketing is specific to the teens, when the real recipient is the parent. When you look at the samples of activities, they didn’t really make sense as marketing tools to kids – but they might make sense to draw their parents to their properties. The biggest issue is that it seems the hotel operators might not have their finger on the pulse of what their teen and pre-teen prospective consumers would even be drawn to. It’s good to look for ways to build brand loyalty – especially with young consumers – but you can’t build that loyalty with confusion about who you need to connect with.
The article recounts a few of the offerings that have recently been launched by some hotel chains. What the article doesn’t do is cover how these features are marketed. If there is no specific marketing strategy for these offerings, then too much is left to chance – making the offerings less effective. But, let’s just say that the offerings were marketed through specific media or even as part of their CRM or email communications. You still have to question who (and when) the target is for some of these offerings:
- At select Omni Hotel locations, a “Teen Connection” program has been launched where the teen-aged guests can communicate with a Teen Concierge through Twitter, Facebook, e-mail, or text. Besides the obvious question of “why don’t you just go downstairs and speak face-to-face with someone?”, I question how much business (or loyalty) will be generated for something so specific. If, as a teen, I had connectivity – which should be paramount – I would be communicating with friends not rushing to communicate with a stranger about things I would need permission from parents in order to actually do it. Since the marketing would be toward parents, would parents want their kids to be asking for reccos through social? Maybe they would feel more comfortable that it is from a more substantial (i.e. hotel) source, but again, why not go down to the lobby to ask someone? Which leads to the bigger concern about the Teen Concierge idea. As a parent, do I want an 18 year-old to be a concierge telling my son or daughter to go see a rock show at the Beacon or skateboard through Central Park when I am visiting New York City? David Strebel, the teen concierge at Omni Berkshire in Manhattan gave those examples of what he would offer. While those suggestions are borderline fine options for teens who know the city well, as a parent, I’m not so happy about the argument that is probably going to happen when I tell my kid they can’t do what the cool guy at Teen Concierge got them to set their mind on.
- Hyatt has rolled out their “For Kids by Kids” menu and it seems like it makes the parents happy due to its healthier options. But, the concept of “by” is an interesting one as it seems the menu was only “approved by a group of young taste-testers.” To be upset about the lack of offerings like ”curried shrimp lettuce wraps” on a kids menu could just as easily be appeased by hotels in offering child-sized portions (and costs) of the regular menu items. But, again, there is confusion as teens are not the sweet spot for children’s menus. Most children’s menus are targeted at 12 (at the high-end) and under with many targeting even younger. Maybe another solution is to rethink some menu options entirely to more strongly relate to their target audience. Maybe the rethinking leads to a couple of items on the menu that are healthy, but are more of a “grazing” type of offering – where young adults can lay around and idly eat healthy foods like crudite, crackers and tuna or chicken salad, etc.
- Some real head scratchers are Sofitel’s French Language TV station, Tivi5MONDE, for children under 13 and the Ritz-Carlton Orlando Grande Lakes teen massage and facials. What’s the audience size for kids under 13 who want to watch something in French and are teens really that interested in spa treatments as a progenitor or loyalty? The Ritz offering might make perfect sense due to its overall demographic, but the loyalty they have going has very little to do with how kids are treated. In fact, there are many who stay at such hotels that would prefer there were not pre-teens or teens running around…
We’re not even dealing with Tyson’s Corner Marriott’s belief that American Girl packages with free viewings of American Girl’s McKenna Shoots for the Stars are perfect for pre-teens and teens. American Girls’ target is considerably younger than that demo.
It could all come down to how the writer, Nancy Trejos, framed the story as attempts to target and draw in those demos. It seems that the examples either over think the target or don’t really address them. One commenter on the article succinctly stated that “the best way to keep teen guests content – offer free wi-fi.”
Obviously, the best way to provide loyalty is to offer great experiences without being too gimmicky. As the adults are usually (hopefully) the ones making the decisions, the effect the offspring have is based on their content and how much they enjoyed things. So, there are probably inexpensive ways to convey to parents that there are great offerings for the kids to allow for sampling and, based on good experiences, many happy returns.
The low-hanging fruit is for hotels that are heavily used for business travelers. By way of CRM programs and booking confirmation emails, they can easily include a little blurb inviting those business travellers to bring their families along. They can work on programs that make travel for children, pre-teens and teens more comfortable. And, there are things that can provide a sense of security and comfort for the parents. Maybe its just having a late-afternoon kids and teens “only” reception in a part of the hotel restaurant where healthy choice foods and fun activities are provided at no extra charge. Maybe its in the form of borrowable MP3 players that have music that conveys the spirit of the city they are visiting. Obviously, there are so many more options – all with different degrees of difficulty.
The thing is, a lot of what was listed seemed like it was from some ideal story of teens who visit the Waldorf-Astoria and take it over. While it might seem exciting to talk about QR codes and healthy choice education in order to get press coverage, the results are what matter and the ones shown just don’t seem to do the trick.
If you want to target a certain demo, you’ve got to know who they are, what they want and then deliver on that. But that’s not all… You’ve also got to be clear in how you’re going to communicate it. You’ve got to make sure you’re communicating clearly to the people who really matter. In this case, is the kids that the initial communication needs to happen with? No. It’s the decision makers – who happen to be the parents. And ultimately, it doesn’t matter how much the parent’s love an idea of something, f the child doesn’t like it, there will be problems. The challenge is in connecting the dots – or at least leaving the right breadcrumbs to draw target demos to your product and generate loyalty.
Posted in Core
Tagged American Girl, Communication, CRM, David Strebel, Demographics, Hotels, Hyatt, Loyalty, Marketing, Marriott, Messaging, Nancy Trejos, Omni, Pre-Teen, Programming, Research, Sofitel, Strategy, Targeting, Teen, Tivi5MONDE, USA Today
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