Tesco.com - Competition Commission

Our success is based on listening to customers

Customer Question Time

We are the UK’s number one retailer because we listen and respond to customers and their changing lifestyles. Rather than developing products and services that we think customers want, we spend lots of time and effort asking them. It’s simple – we listen and respond, providing customers with what they tell us they want.

This strategy of listening and responding has been successful, but we can not be complacent. We are well aware that if we stop listening and don’t respond to our customers’ needs they will choose to shop elsewhere.

A few years ago we listened to customers when they told us the things that are most important to them. It helped us develop the Every Little Helps promises, and they are just as important today. These five promises to our customers reflect the simple things people care about when they go shopping:

• prices are good;

• I can get what I want;

• the aisles are clear;

• I don't queue; and

• the staff are great

These five promises may sound simple, but we know that if we don’t get these things right customers will go and shop with one of our competitors. It’s important to us to do the little things that really matter for customers and staff, in every store, every day. These promises are fundamental to our success.

Listening to customers has enabled us to respond to many changing customer attitudes such as increasing concern for health, local sourcing of food and a renewed sense of community. Our research has also helped us identify new general trends such as an ageing population, more single person households and more working mothers.

Our belief is that these emerging trends are likely to continue and produce more changes in what customers expect from us. This means we will have to be pro-active in refining our offer to satisfy these customers’ needs and aspirations. We are confident that we can listen and learn about our customers’ evolving needs and guide our actions to continually improve and tailor our strong and inclusive retail offer.

How we listen

12,000 customers attend our Customer Question Time sessions each year – a forum where we listen to customers’ views on everything, from products, price, quality and service to our role in the community and the Tesco brand.

Customer Comment Cards are available in all our stores. Alternatively customers can free phone our customer service helpline.

Last year Clubcard celebrated its tenth anniversary and with over 13 million active card holders it is a world-leading loyalty programme. Not only does it enable us to thank our customers for shopping with us, but it also helps us to better understand what customers want.

We also employ a range of qualitative research techniques, such as focus groups, accompanied shops, home visits and others, to explore issues as they arise. And we use quantitative techniques, such as on-street, telephone or on-line questionnaires, to talk to a wider number of customers, or to quantify views and opinions garnered in qualitative studies.

We have on-going research trackers asking the same key questions regularly, to allow us to track performance over time.

However, these tools on their own are not enough to get a true understanding of customer behaviour and motivation. We use multiple sources of information which allows us to look at many aspects of consumer lifestyles, to understand a problem, or discover opportunities to do more for customers.

What we have learned

Here are a couple of examples from many thousands.

Sometimes the information we gather leads us to uncover simple explanations for customer behaviour. For example our sales data showed us that there was a sharp increase in the sales of flowers and wine for one week at the start of the summer. Since it didn’t coincide with a celebration such as Mother’s Day, we had to look for another explanation. Analysis of our Clubcard data showed that the majority of customers buying these items were families with school age children. Parents were buying these products for their children to take to school and give to their teacher at the end of term (obviously an apple for teacher isn’t enough any more!). Having come to this conclusion we were able to ensure that there was a plentiful supply of flowers and wine in our stores at the end of the school term.

Using external research we recently identified an opportunity to improve our range. The research told us of a rapidly growing need for Polish & Eastern European products and our growing number of excellent Polish staff helped confirm our beliefs.

As a result of this, we appointed one of our Polish executives who began by listening to customers and held our first ever Polish ‘Customer Question Time’ (in the Polish language) to find out which kinds of products our customers would like to buy. After talking to Polish customers, we finalised our product selection then sourced the products from a new supplier.

We launched our range in-store in September 2006 with very positive feedback from customers and stores. We are now asking customers for more feedback to find out how we can further improve the range. Initial feedback has been so positive that we are already planning to launch in up to 100 stores and extend our range into Chilled and Bakery product areas.

As well as listening to customers we also know how important it is to listen to our other stakeholders. Please follow the links below to read about how we listen to our people, our suppliers and the communities we serve.

Listening to our people - we are the largest private sector employer in the UK with over 260,000 staff. Our people make Tesco a success and we know how valuable their feedback is.

Listening to suppliers - we take a partnership approach and believe that open and constructive relationships with suppliers are key to a strong and sustainable supply chain.

Listening to communities - we are also aiming to improve the way we consult local communities before building new stores so that we can be sure that we have understood local issues and concerns.