Non Food in Tesco
19 September 2017
COMING UP
Now: Tesco - Non Food ranges
Soon: What about Wilko?
Then: M&S - Did the lack of a sale impact food?
Later: Wish it could be Christmas every day?
The Tesco revolution has been fascinating watching, but despite the 'obvious' solutions to many of the chain's issues, non-food and the wider space conundrum were always going to take a significant effort to fix....
The space question remains a huge millstone around Tesco's neck, with no silver bullet to solve the space challenges, despite the emergence of concessions such as the Arcadia brands.
Space aside, Dave Lewis hasn't managed to get around to sorting the fundamentals of the non-food business either, with the focus firmly on food and resolving the value challenges within...
In that time, the market has moved on with their offerings, Sainsbury's have continued to strengthen their core offer, without buying Argos and also getting Habitat...
Asda have always had so much strength within George, even though it's hidden almost entirely within the wider offer. Their ranges are often at the level of Next, without the price points and they're always bang on trend within bedding and other areas of the home furnishing category.
Whereas Tesco, well, save for a bit of inspiration at Christmas on associated non food ranges. They haven't done much on range for some years, their former ranges were stale, displayed on white supermarket shelves and layouts do not bring the products to life.
That was until some 2-3 weeks back when two new sub brands from Tesco landed in store... Both Fox & Ivy and Go Cook have landed with some noise, complete with signage and a bit of a 'brand' based ideal going in store.
However this isn't without challenge, Tesco don't give non food a leading role in their operation, with store colleagues replenishing this area throughout the day. This can hinder customer flow and mean customers in store don't always see the range at its best or fullest.
With that in mind, a store I visited recently lost their excessive 'hub' for technology and other 'advice' (the need for it long gone), with the aisles widened to allow for easier in day replenishment.
This makes sense, but the replenishment in day does impact availability and wider standards around clearance levels and clarity at the shelf edge too.
When it's peak time in the range, such as 3 for 2 Toys time, a poor set up on the category means the store is then chasing their tail to keep up. Trying to fill a fixture whilst legions of customers are battling for the last Paw Patrol toy..... Not easy.
It's not easy and with a big launch for two sub brands, it's a big ask in store to keep the wheels turning throughout the trading day, especially with conflicting priorities around checkouts and everything else.
So, what did we see?
The range itself looks strong on shelf, there are a few decorative items that are similar to what we see in the likes of Next, Asda and Sainsbury's these days....
Signage works well, it is on supermarket shelves (albeit white ones) in stores which does detract from the offer perhaps.. The merchandising is also a little questionable I feel, with the layout a bit 'all over' within the Jardin theme.
The collection itself looked good, but the key element here are the seasonal changes and how often these occur. Sainsbury's operate this seasonal model within non food very well, often having some 3/4 collections trading at any one time, but they're in / out as appropriate.
That's the key for Tesco, to ensure they rotate the sub ranges regularly to ensure relevance and crucially, ensure they manage the markdown and clearance effectively too.
Prices looked sharp; £16 for some sort of faux fur rug / cushion was reasonable, Sainsbury's for equivalence are selling a rug for £32 that looks very similar....
Further range examples here; an unquestionable step on from the somewhat functional range they previously had.
A very busy fixture however, lots of choice and the range jumps all over.
Go Cook had arrived before this wider range landed in stores, with lines appearing in the Summer as part of the old range make up.
Their cook/dine ranges were functional and perhaps that's all they needed them to be. Never going to be a 'doorbusting' range to get customers in to store but it did a job, should a customer have needed a baking tray or roasting dish for example.
However Go Cook looks and feels a bit more specialised than that. Perhaps a range that has one eye on the Booker merger and the subsequent arrival of professional caterers in to Tesco stores (as / when / if Booker outlets / collection points / etc appear in store.)
Equally for the core customer, the range feels more compelling and one that customers could trust and get value for money as it would last a fair amount of time.
It's an area that specifically Sainsbury's and Asda too have had some success, with their premium equivalent ranges often looking the part in store and performing well too.
Crucially for Tesco, the new branding looks the part on pack and this will aid sales of the new range, alongside the better quality products too.
Further examples of their Go Cook range, with better quality around Pans and other cookware based lines. Packaging is most impressive and gives the products a feeling of distinction, rather than just another supermarket product.
Fox&Ivy also features a range of glassware and other table based products that are have more distinction than the core Tesco range, this is alongside the Fox&Ivy themed seasonal non food ranges too.
Note the 'exclusively' for Tesco moniker on pack too.
However the range has not launched without challenges and it's unclear whether this is a case of stock not arriving from China in time, linked to the wider restructures and the central teams being under too much pressure or the stores finding it hard to land the range and maintain standards given shifting priorities on the day shift..... Or a mix of all three.
Launching a range with a full bay of gaps after a week seems like an issue further up the chain to be honest, but wider standards were under pressure in a few stores when visiting.
It wasn't just the new ranges that were challenging, other standards across the category were poor and this was a surprise. Given the focus on the new ranges, you'd expect most of the category to be near perfect given the attention and focus that has gone in to the sourcing, product design, signage etc.
But it was almost hit wide from 2 yards out in store.... So close, but yet so far in a number of respects. Even the basics like duvets were hard to find, some of the core glassware ranges (not even new sub brands) were unavailable and this will lead to customer disappointment.
This isn't linked to the non food relaunch at all, it's just bad practise and shows the store manager isn't walking the store.
You can always make excuses for changes in replenishment and other central initiatives and I have sympathy, but this should not then impact the customer.
Clearance requires managing, especially in non food.
A week in to the range landing and this was the sight in one store, clearly something amiss here. The store have done their bit of work on the gap scan, but where is the stock?
Saturday just gone saw further issues elsewhere in the range, it could be really strong initial sales that have seen supply become an issue, leading to gaps on shelves.
Or it could be that the range hasn't landed properly since launch and is slowly coming in to store. Either way, for a busy Saturday, it wasn't going to impress / inspire customers and would more than likely disappoint those customers that had come in for the basic glasses / vases too.
This store had the newer display kit at least, but the availability picture was as bad, very disappointing for customers.
Toys are another area of opportunity and whilst there hasn't been a whole scale range change on here just yet, there is always the need to maintain the Toy range, pushing on with new collections from the leading brands...
Parents of young kids will empathise with the need to keep pace with the various paw patrol character variations that are released....
So Toys remains an arena for improvements, especially if Tesco look to repeat their 3 for 2 deals as they did last year, taking on Argos notably. Their current state of affairs around Toys does concern and needs more attention in store.
You can somewhat understand the focus being off non food somewhat, it hasn't been a priority for the business as they reshaped the food offer. However despite shifts in behaviour around online, the sheer space dedicated to non food along with the Booker deal potentially opening up new markets, their renewed focus on non food is well timed.
However the stores need to be able to support the ranges and the focus should be on the wider customer experience within non food too, not just the new ranges and associated signage.
From the Grocery Insight newsletter archive, first sent to subscribers on 19 September 2017. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.