How Tesco can beat the discounters

Jack’s, the new discount banner from Tesco is a bold move. Part of the retailer’s intention is to win back some of the customers it lost to Aldi and Lidl.

Of course, in order to do this, it will have to pitch its offer perfectly.

From a brand POV, Tesco could have chosen to leverage the banners it has inherited through its acquisition of Bookers; namely Budgens, Londis, Euro Shopper and Premier Stores. Instead, it has decided to create Jack’s, named after Tesco’s founder Jack Cohen. This is a promising start, as it means they will be free from the bondage of legacy and everything that comes with it.

As any loyal discount shopper will attest, Jack’s will have to be very good value. Tesco’s buying power, strengthened by its world-beating alliance with Carrefour, will provide the firepower to match the discounters head-on.

However, to win the hearts and minds of discount shoppers means understanding what attracted them in the first place. Let’s hope Tesco have understood that competitive pricing alone is not enough.

Aldi and Lidl have built their loyal legions on a combination of clever ranging and canny branding. Put simply, they’ve managed to create excitement in a category defined by bulk deals and bland experience.

So, what does Jack’s need to do to win?

In terms of product, Jack’s has to offer something new and exciting. Aldi and Lidl have worked tirelessly to build their own ranges through trust and differentiation, whereas Tesco is a retailer built on the brands of others. Known brands carry a certain reassurance, but can Jack’s stand out by plugging the same old brands, even if at better prices? I hope Jack’s carries its own own-label products. If it does, they will need to be compelling, strongly represented across all categories, and built with unique category beacons to drive interest and talkability.

Jack’s also needs to be fun and daring and take on the challenger mantel with gusto. It needs to try to distance itself from its big corporate brother, often stuck in a broad ‘please everyone and no-one’ mentality.

It would be tempting to expect the halo effect of the Tesco reputation to sway shoppers, but customers want something to love and Jack’s will need to work hard to get their attention. PR food/product stories are the new frontier for modern grocery advertising. Jack’s would do well to build strong social buzz metrics as the core of its marketing objectives.

Then, hearts, as well as minds, will be won.