Tesco: 66 points for Dave Lewis – No.3 – Blinkbox

Today is 64 (sixty-four) days until Dave Lewis takes the helm at the UK’s biggest retailer. Grocery Insight are counting down to the start of his reign with an improvement point per day. First up, we had Twitter, then unerring focus on shrink and today it’s Blinkbox.

As part of the technological roll out, to prove that Tesco were on the ball in this ‘digital age’, they started to acquire tech based businesses. In 2011 they acquired 80% of film rental service Blinkbox with a strategy to push this onto customers via Clubcard, in store and via the Tesco.com site.

Blinkbox offer movies and TV on demand, but there doesn’t appear to be a USP around this. Considering they are fighting the might of Amazon and indeed Netflix, it’s a market with diminishing returns and two dominant players.

Blinkbox was also pushed as part of the seasonal offer.
Blinkbox was also pushed as part of the seasonal offer before Christmas.

Where Blinkbox is different is the potential to tie things up in store, advertising the online streaming service to millions of  Tesco customers through PoS and offers linked to Clubcard.

There have been some efforts at this and ClubcardTV seems to offer some free services for Clubcard users, but there are more films / TV shows available via Blinkbox. Confused? I am.

There are ample opportunities for tie ups via Clubcard in store, but it just simply doesn’t happen. There is a secondary question too, what would make a customer cross the road? Change from Netflix / LoveFilm to Blinkbox?

Arguably the biggest push on Blinkbox in store came with the new proposition Extras, Watford had a full mod dedicated to Blinkbox sign ups in the Crisp aisle, some solid impulse tie in work. It delivered approximately zero sign ups, partly due to the poor promotion; buying 3 eligible items then renting a film to get 200 points?

Tie ups with Cadbury's have also been used.
Tie ups with Cadbury’s have also been used.

The offer from Blinkbox has been expanded to encompass books and music, but when you navigate to the website, there is no mention of the Music / Book offer. You have to go to a separate site, one for books and another one for music. Not cohesive.

Books / Music elsewhere..
Books / Music elsewhere..

Whilst Blinkbox is a decent enough business, does it contribute to the bottom line? It is a non core activity at the end of the day and symptomatic of a business that went into Tesco Compare, Tesco Car sales and even cashing in gold.

Is Blinkbox different enough to Netflix / LoveFilm (Amazon)?

Does it stand a chance of contributing to the bottom line and crucially differentiating the wider Tesco offer?

If the answer to these is no, then the viability of the business within the Tesco stable should be considered. It’s hard to see that Blinkbox is a major contributor to the bottom line as is, and anything away from the core food business is a distraction. No one needs technology for technology’s sake.

This could be an area where ‘drastic Dave’ looks to target. Non core activity.

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Grocery Insight provide market insight on the UK sector with a focus on individual retailers such as Tesco. This insight is useful to various stakeholders and due to my store based focus. Insight can be delivered to suppliers to focus on growth opportunities, analysts and investors to assess the business performance and long term outlook and retailers themselves to assess best practice. 

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