This is an article analysis which I conducted for an IMC (Integrated Marketing Communication) class project and presentation at Atkinson, based on Tesco’s Homeplus and its smart phone enabled virtual grocery stores in South Korea.
In the spring
of 2011, Tesco PLC – A UK based retail giant renamed its South Korean branch operations
to Homeplus, in an effort to become the nation’s prime grocery retailer without
increasing the number of stores. They adopted an approach that involved expanding
their online sales rather than opening new stores. As South Korea has more than
10 million smartphone users in a population of less than 50 million, it made
sense to look at mobile shopping just as much.
Based on
research conducted by Cheil Worldwide, South Koreans were dubbed as the second
most hardworking people in the world. Long work hours, busy schedules and
crowded stores made grocery shopping a burden rather than an enjoyable
experience as it left little time, energy and interest to perform the task.
Thus, offering the opportunity to shop while doing something else had a lot of
value and so Tesco aimed at utilizing unproductive waiting times more
efficiently. Take for instance, commuters waiting for their train: they have
time on their hands, quite likely have jobs and are usually susceptible to
dynamic and relevant forms of marketing communication. With Homeplus, Tesco
were able to capitalize on this opportunity by building virtual aisles on the
platforms at Subway stations in the nascent stages on the concept’s
implementation. They created lifelike, enormous and rich images of food items
and plastered them across the walls of train platforms, laid out in the same
way as they would be in the shop. Every item had a corresponding QR barcode,
and people waiting on the platform could check out the items on the huge
billboard and scan the QR code of the relevant item using their smartphones.
This immediately added the item to their Home Plus shopping basket. The idea
was to make online shopping more visually appealing at a time when people were
captive and bored. Deliveries of the goods could be arranged to arrive within
hours of the order, meaning that in some cases they could arrive just as the
commuter gets home. The strategy proved successful and Home Plus online sales
went up by 130 percent in three months, and the number of registered users went
up by 76 percent. The retailer also closed the gap on its main competitor, E-Mart.
Cheil Worldwide – The organization accredited with creating the virtual subway stores for Tesco's Homeplus, won three awards for its marketing, adverting and communications campaign for the concept and brand at the 56th annual Cannes International Festival of Creativity in addition to a Grand Prix in Media and two Gold Lions in the direct advertising and Outdoor advertising categories, for the virtual subway stores.
‘The long
tail of PR’ is one of the principles that Scott mentioned in his book “The New
Rules of Marketing,” which was what Tesco applied to its model in Korea.
Instead of spending millions of dollars trying to attract customers to a normal
supermarket, they decided to attract their customers with the use of a ‘push
mechanism’ rather than a ‘pull mechanism’. Thinking outside the box and understanding
their potential customer persona, Tesco identified a need that even their
customers didn’t realize they had, and were paramount in successfully
pioneering a strategy to service that need. According to Scott, “Smart
marketers understand buyers.” and this is exactly what Tesco’s model focused
on. Instead of competing head-to-head with huge supermarkets, they decided to study
their consumers’ requirements and lifestyle in depth in order to engineer a
service that was designed to best accommodate this lifestyle.
Another principle that Scott mentioned was ‘driving buyers into the sales process’. This is what Tesco did when they created a marketing buzz by the way they presented their services and products to the public. Going after their buyers and having a direct relationship with them was something that Tesco tried to do with building their virtual stores in the subways. At this point, it is crucial to understand that Tesco isn’t only selling grocery products - They are also selling convenience, time-saving and a promise of ‘on-time delivery’ to the consumer. This is another phenomena that Scott explains in his book under the headline “You are what you publish.” One of the questions that a marketer should ask according to Scott’s book is, ‘what do you want your buyers to believe?’ In this case, Tesco wanted their customers to believe that they didn’t need to waste their time and effort shopping in crowded supermarkets and that the experience Homeplus offered was faster, easier, enjoyable, more productive and simply better - They conveyed this message in the most exquisite and ingenious fashion.
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