So my prediction in January that some retailers could make themselves a hostage to fortune with the current grocery price war turned out to be 100% right (‘copper-bottomed guarantee’ blog 13/01/11). I just happened to be 100% wrong about who might be the loser. Tesco’s response to the ASDA initiative has caused them embarrassment and may look to have been ill-prepared.
Watchers of the ASDA-Tesco price war will have seen Tesco somewhat humiliated by their attempt to curtail Andy Clarke’s ASDA Price Guarantee; ‘If we're not 10% cheaper on your comparable grocery shopping we'll give you the difference. Guaranteed!’ In response, Tesco’s PriceCheck campaign promised ‘we’ll check the price of your grocery versus ASDA, then email you with your results. We’re confident you’ll find your shopping cheaper at Tesco, but if not, we’ll refund double the difference”. Tesco have now been forced to apply a bunch of caveats and limits to their offer.
Ingenious shoppers have been checking personal finance websites and conducting their own mystery shopping to create value baskets. One example published by journalist Rebecca Smithers, writing for guardian.co.uk, recently noted 4 bottles of wine and Cider, 2 bottles of moisturiser and a packet of mature cheddar (now that’s a party I’d go to…!) was a whopping £20.98 cheaper at ASDA: Tesco has been refunding claimants £41.96. There are plenty of claims noted on the web – including one from a Manchester shopper for £600.
As a result, there may be some pertinent questions asked within Tesco while they announce new limits on the PriceCheck campaign. How effective was Tesco’s competitor price monitoring, and what processes did they put in place to be able to respond to tactical or dynamic price changes?
ZBD’s light touch wireless communications system – ‘Bounce’ - enables an entire store to be easily equipped with 2-way communications coverage for a small number of ESLs - electronic shelf-edge displays. Just a couple of hundred ESLs in store would enable any retailer to track promoted and volatile products such as KVIs (known-value items) and keep them in line – in real-time - with competitor pricing.
ZBD’s fully graphic screens also mean that electronic shelf labels can be reassigned to new products in a moment – just as long as it takes to scan the new product and to scan the ESL display – beep-beep, job done.
Jann Naef
Product Marketing Director
jann.naef@zbdsolutions.com
