[00:00:00] Suzy Davidkhanian: Hi, everyone. Today is Wednesday, June 3rd. Welcome to EMARKETER's weekly retail show, Reimagining Retail. This is a show where we talk about how retail collides with every part of our lives. I'm your host, Suzy Davidkhanian. On today's episode, we're talking about Tesco, the UK grocery giant that's quietly becoming a case study in modern retail.

[00:00:24] Suzy Davidkhanian: Because many of the biggest debates happening in the US right now around things like loyalty pricing, retail [00:00:30] media, convenience stores, and using AI are already playing out at scale there. Joining me today is podcast regular senior analyst Carina Lamb.

[00:00:38] Carina Lamb: Hi, Suzy.

[00:00:39] Suzy Davidkhanian: And for his first Reimagining Retail episode, Principal Analyst Bill Fisher.

[00:00:43] Bill Fisher: Hi, Suzy. I'm very excited to be here.

[00:00:46] Suzy Davidkhanian: And if you can't tell from their accents, they are both joining me from the south coast of England. Welcome, you guys.

[00:00:52] Bill Fisher: Hello.

[00:00:52] Carina Lamb: Hi.

[00:00:53] Suzy Davidkhanian: So this week we're talking about Tesco. It may look like a traditional supermarket chain on the surface, but underneath it has built [00:01:00] something much more sophisticated, a business powered by loyalty data, personalized promotions, convenience stores, multiple retail formats, and services that stretch beyond just selling groceries.

[00:01:11] Suzy Davidkhanian: And increasingly, that's becoming the big question for retailers globally. Is the future of retail simply about stores and products or about building platforms customer interact with across multiple part of their lives? Before we get started, I wanted to ask each of you, what is the last thing you bought at a Tesco?

[00:01:29] Suzy Davidkhanian: Carina?

[00:01:29] Carina Lamb: [00:01:30] Oh, that's a really good question. It's, it's very specific. I bought a Tupperware container For my tack cleaning equipment for my horse

[00:01:41] Suzy Davidkhanian: Oh, wow Tack. They have a horse section?

[00:01:44] Carina Lamb: No, it's not horse specific. It's just, I just needed a Tupperware, a big enough Tupperware box that I could fit like my sponges and saddle soap- Wow

[00:01:52] Carina Lamb: and stuff in there. Yeah.

[00:01:54] Suzy Davidkhanian: Bill, what about you?

[00:01:55] Bill Fisher: Groceries. Take your pick. Right. Minced beef, chicken, [00:02:00] vegetables, everything.

[00:02:01] Suzy Davidkhanian: That's how I think about Tesco until I did a lot more digging. When I was in London last, I went to a Tesco Express in the city near where my friend lives, and I was hunting for Blake, one of our colleagues, and a podcast regular, needed this very specific chocolate bar, which I found at the Tesco Express, which I was very pleased because technically it's supposed to be a much, like, smaller assortment, so that was kind of cool.

[00:02:24] Carina Lamb: Yeah, Tesco's pretty good at having what you need.

[00:02:27] Suzy Davidkhanian: I love that. So maybe that's their real [00:02:30] superpower. I don't know. Let's talk about that. If you think about Tesco, what is their reason for being, their real superpower? We'll do the usual pie game. So we'll deconstruct what makes Tesco most successful by attributing percents to each of these slices that I have chosen.

[00:02:47] Suzy Davidkhanian: These are, I think, the secret ingredient, but I have of course left a wild card in case you have something else you wanted to surface. So the slices could be Clubcard, their loyalty ecosystem, their private label strategy, [00:03:00] their convenience formats, their price value perception, their retail media and data ecosystem- Or the wild card.

[00:03:08] Suzy Davidkhanian: So, Carina, I'm gonna start with you.

[00:03:09] Carina Lamb: For me, Tesco's kind of big superpower at the moment is that Clubcard and that loyalty ecosystem. And that kind of powers a lot of other things, and a lot of other things feed into that, and it's what kind of powers its flywheel, and I really think that's what keeps its market share so high.

[00:03:25] Carina Lamb: So Tesco's not just a big grocery retailer, it's a massive UK [00:03:30] retailer generally, and Clubcard, its, its loyalty program, and it's something that it started many, many moons ago, and it bought the data provider that helped it set up the loyalty scheme, Dunnhumby, and that has come back around now to being an extraordinarily powerful part of its business because we've got retail media on one side, and then we've also got people, the kind of, uh, credit crisis, those people are struggling financially, and it's enabled them to be really clever with their pricing strategy.

[00:03:59] Carina Lamb: So [00:04:00] everyone was going out and trying to beat Aldi on prices, but it's very hard to be price competitive with Aldi, and Tes- Tesco has done a kind of Aldi price match. But what it has done with Clubcard is it has lowered prices specifically for Clubcard members. So if you're a member, you get lower prices, and that then gives it a huge amount of first-party data which it can use for retail media, and that retail media income helps it fund the Clubcard discounts.

[00:04:26] Carina Lamb: So it's kind of created a really clever loop there. So I would say [00:04:30] Clubcard is 100% the biggest slice of the pie. I would say about 35%. Something, I think something like 82% of UK sales go through Clubcard, I read somewhere, which would be absolutely staggering if it was true. Retail media, like I said, that's really important because it has helped Tesco stay price competitive and kind of maintain a margin in this kind of difficult financial situation in the UK and against discounters like Aldi and Lidl.

[00:04:55] Carina Lamb: So I would give that 20%. Um, it's not something necessarily that [00:05:00] shoppers are really sort of aware that's happening to them. But strategically, it's a really important, um, part of their business, and they've done things like offering ads on, we have a thing called Scan & Go in the UK, where you can scan your shopping as you- Go, and it, we have handheld scanners, and they've even done ads on there so you can do really personalized advertising.

[00:05:20] Carina Lamb: So that for me is genius. Price and value perception, I would also give 20%. Tesco's done a really great job, like I said, of kind of competing with Aldi and Lidl, um, [00:05:30] through Aldi price match, Clubcard prices, and it's kind of still viewed, I think, quite competitively, so it's not seen the big loss that, um, some of its competitors have in market share.

[00:05:41] Suzy Davidkhanian: So you're at 85%.

[00:05:43] Carina Lamb: 85%, oh, crikey. Uh, so private label strategy I would give 15%, and I think again this is kind of part of its, um-

[00:05:51] Suzy Davidkhanian: Oh, I just don't know how to do math. I'm sorry. You're at 75%.

[00:05:54] Carina Lamb: Okay, good, yeah. I was worried then. So yeah, private la- label strategy I would say 15%. Um, [00:06:00] its Finest line has its sales growing, like, 15% or something in the past year I think according to its financial results, so it's really capitalized on people trading down away from brands and into private label but wanting to still have that kind of premium feel.

[00:06:15] Carina Lamb: But it also has kind of more basic lines, so it's really enabling every shopper, no matter what their budget, to shop at Tesco and find products that they can afford and that suits them. Convenience, um, that's something else it's kind of leaning into. It's [00:06:30] opening more Express stores. It's a really good frequency engine, and it really captures that kind of top-up shop, lunch mission impulse occasion.

[00:06:38] Carina Lamb: So I think that's a really important part of its business too. And then my wildcard is gonna be-

[00:06:43] Suzy Davidkhanian: Oh, but you're, but you're at 100.

[00:06:45] Carina Lamb: No, sorry, convenience was 8%.

[00:06:47] Suzy Davidkhanian: Oh, 8, oh, okay.

[00:06:48] Carina Lamb: Yep.

[00:06:49] Suzy Davidkhanian: Oh, I'm sorry. I missed that.

[00:06:51] Carina Lamb: Tell

[00:06:51] Suzy Davidkhanian: us what your 2% wild card is

[00:06:53] Carina Lamb: Whoosh is 2%, and it's my wild card. So Whoosh is its kind of instant delivery format that it's used to take on the likes [00:07:00] of Deliveroo.

[00:07:00] Carina Lamb: It's seen 51% sales growth over the last year. It's over 400 million. That's still pretty tiny in terms of the business as a whole, but I think the strategic value is kind of bigger than that because it completes that mission coverage. So it means that Tesco has you covered whatever you're doing, big weekly shop, top up, you know, emergency lunch, pop out to the shop to get something late, or, "Oh my God, I need something in the next hour", Tesco can now serve it to you.

[00:07:26] Suzy Davidkhanian: That's cool. Before I toss it to you, Bill, I wanted to ask [00:07:30] Carina about the scanners and the personalization. Is it like a bridal registry scanner where you're given like a little scanner gun thing and you are touching the SKUs, the, like, barcodes, or is it your phone and the app? 'Cause I am not clear on the personalized aspect of that.

[00:07:47] Carina Lamb: Yeah, so this is specifically the handheld scanner, so it's quite a big thing in supermarkets in the UK generally. It's not just Tesco that does it. All of the major supermarkets offer it. So you get a little handheld scanner, and it's like a barcode scanner, and you get [00:08:00] one, and you have to log into it so it knows who you are.

[00:08:02] Carina Lamb: Oh, you have to log in. So for, for Tesco, it's connected to your Clubcard- Got it ... so they instantly know exactly- Yes ... who you are.

[00:08:08] Suzy Davidkhanian: Can you use the doohickey without logging in?

[00:08:13] Carina Lamb: Not as far as I'm aware. Like, I have to give it... I, I don't think you have to be a Clubcard member, but you have to tell it- Okay ... who you are.

[00:08:19] Suzy Davidkhanian: It's kind of like, I'm thinking about, you know on the back of airplane seats, you can log in- Yeah ... to the TV, but you can also not log in and watch-

[00:08:25] Carina Lamb: No, no, so- ... whatever you want to ... yeah- This you have to log in ... I think you have to. I have- Got it ... and I'm not 100% sure whether you have to be [00:08:30] a Clubcard member, but you definitely have to identify yourself.

[00:08:32] Carina Lamb: Okay. You

[00:08:32] Bill Fisher: do have to be a Clubcard member. You

[00:08:34] Carina Lamb: do? Oh. Okay, fine.

[00:08:35] Suzy Davidkhanian: Bill, on to you.

[00:08:36] Bill Fisher: Yeah, I'm gonna talk about Scan as You Shop a bit more in this episode 'cause I love it. It's brilliant. Um, but anyway, uh, let me see if I can add up.

[00:08:44] Suzy Davidkhanian: I'll do the bad math for you. Don't worry.

[00:08:47] Bill Fisher: So I, I think that the, the Clubcard loyalty ecosystem and retail media data ecosystem are intrinsically linked actually because- It's really powerful, the data that it has on its [00:09:00] shoppers, and it, it fuels the retail media ecosystem.

[00:09:03] Bill Fisher: And I, I think the Clubcard ecosystem stuff is really, really important right now. I think the retail media stuff is becoming increasingly important. So if I can, I'd give the two of them 50%, but maybe slightly, maybe 30 Clubcard, 20 retail media for now. Like Carina. Oh, is that the same?

[00:09:20] Suzy Davidkhanian: 35- Oh, yeah ... and 20, but still very similar.

[00:09:23] Bill Fisher: Very close.

[00:09:23] Suzy Davidkhanian: The bulk of their- Yeah ... yeah, their secret sauce is the data loyalty play.

[00:09:27] Bill Fisher: Yeah. Um, I think [00:09:30] the, uh, private label strategy, what did Carina say? I've gone for 20% here. Is that higher?

[00:09:36] Suzy Davidkhanian: That's a bit higher than

[00:09:37] Carina Lamb: mine. Little bit higher. Yeah, fair.

[00:09:38] Bill Fisher: Just, I, I mean, I don't disagree with ... I, I think everything that Carina said makes a lot of sense.

[00:09:42] Bill Fisher: I just think it's quite a big part of its costs.

[00:09:46] Suzy Davidkhanian: Perception.

[00:09:47] Bill Fisher: Perception, yeah. And so that kind of leads into the price value perception bit as well. So actually, I'll combine the two of those and give the two of them 25%, and let's go half and half, so 12 and a half [00:10:00] percent each for that, and private value, uh, price value perception.

[00:10:03] Bill Fisher: Convenience formats I think are really important right now. I think they might need to adapt, which we c- we'll talk about in a later segment of the show. But at the moment, I, I think that they're really important. As you said, Suzy, you can go and get these chocolate bars that you want. The convenience aspect is amazing.

[00:10:21] Bill Fisher: So I've given that 20%. What does that leave me with? 5%?

[00:10:25] Suzy Davidkhanian: Yeah.

[00:10:25] Bill Fisher: So that's the wild card. And kind of- it's kind of [00:10:30] piggybacking on what Carina said, actually. She went for Wish. I, I was talking, we're gonna talk more about just its general fulfillment infrastructure- Mm ... which Wish is kind of part of that, you know.

[00:10:41] Bill Fisher: It's 'cause it's got a vast physical infrastructure, and if it can really leverage that to do things like Wish ... historically, it's failed in this regard. So there used to be something called Tesco Direct. I don't know if you remember this, Carina. It was like an Amazon competitor. Mm. Tesco just wanted to be everything, an everything retailer for everyone, and you could order [00:11:00] online, collect at either the big Tesco Direct huge outstore, uh, out-of-town hypermarkets or at these Tesco Express stores, and I thought it was brilliant, but it was a massive loss leader, and they just couldn't compete with Amazon.

[00:11:12] Bill Fisher: So it, it kind of failed, but I think tweaking that fulfillment would be a, a, a good area where it could gain some ground. So that's the 5%.

[00:11:21] Suzy Davidkhanian: I love that. Thank you. So very similar. For me, I think what I found most interesting, and you guys talked about it in different ways, is that because at the root of [00:11:30] their business, it's grocery, which is high-frequency, and then they figured out how to deal with the different types of missions.

[00:11:36] Suzy Davidkhanian: So depending on your trip purpose, there's, like, smaller stores. There are gigantic stores. It looks like they have club stores now with, like, wholesale-y sort of prices or pretend to be. It's like they figured out the entire grocery ecosystem and the consumer needs, and from that have branched off into, I was telling you guys before we started, I saw clothing lines.

[00:11:55] Suzy Davidkhanian: I saw all kinds of things, insurance, loans. I mean, it all roots into [00:12:00] that club card data probably.

[00:12:01] Bill Fisher: It does.

[00:12:02] Suzy Davidkhanian: So with that, we know what some of their secret ingredients are, but what should they bet on next? If you were CEO for the day, what would you change, or what strategy would you extend? Would you go into a new vertical?

[00:12:16] Suzy Davidkhanian: This is a, like a wild card, sort of pie in the sky, if you will, thinking. What would you do next? Bill, I'm gonna start with you this time.

[00:12:24] Bill Fisher: I'm not gonna go too pie in the sky, uh, and I'm gonna stick to what I know and spot [00:12:30] the ad marketer guy in the room. I think its retail media play is really, really good, but it's got so much data, it could be so, so powerful.

[00:12:40] Bill Fisher: I think it could extend that and be even better. So Carina mentioned the scan-as-you-shop thing, right? Fantastic bit of real estate. So we- we've explained how they work. You're in a store, you have this screen that you are constantly using, it's in your eye line pretty much all the way around the store.

[00:12:57] Bill Fisher: Just imagine being in an aisle where your [00:13:00] brand is, and it has all this previous buyer information on you, knows what you like, and it can serve you an ad that could potentially influence your purchase decision. Fantastic bit, bit of real estate. However, and we didn't quite get to this, I, I was gonna interject, but I thought I'd wait and, and mention it now, scan-as-you-shop in Tesco, it doesn't allow you to revert to mobile.

[00:13:21] Suzy Davidkhanian: Oh.

[00:13:21] Bill Fisher: If you, if you're in Waitrose, you can use your mobile device to scan and shop. Now, I went into Waitrose not that long ago, [00:13:30] and the scan-as-you-shop tech was all down. It wasn't working, and I was like, "I, I can't cope if scan-as-you-shop isn't working." But we reverted to the mobile app, and it was as seamless as the scan-as-you-shop terminals, but it's on, on your mobile device.

[00:13:45] Bill Fisher: It's this personal device. All of our data is in there, and I was just happy to do it because it, it removes all that friction. Um, so I think, at, and, um, when I'm saying retail media, I'm only talking about- Broadly speaking ... the scan-as-you-shop stuff. Yeah. But there's all the stuff in store as well, that it's doing really, really [00:14:00] well.

[00:14:00] Bill Fisher: But I just think in some areas it could, it could ramp up on, on it and do it slightly better, 'cause this is where all the margins are, right? This is where it can make all the money.

[00:14:08] Suzy Davidkhanian: We've had some app sorta scan-and-go, sort of Amazon has tried different trials and iterations of like palm scanning, all kinds of different things.

[00:14:16] Suzy Davidkhanian: Here, well, here over there in the UK, when you do scan, like scan to go, is the payment already processed? Do you, or do you still need to go to a cashier-less checkout or some sort of... 'Cause you guys are also very well known for cashier-less [00:14:30] checkouts.

[00:14:30] Bill Fisher: Yeah, cashier-less checkout, but it's really painless.

[00:14:32] Bill Fisher: You just scan a QR code on the screen- Got it ... pay and go. But the thing about scan-as-you-shop, you can see what you're spending all the way around as well, so it really helps- Yeah ... with budgeting, which I love- Yeah ... which scares me when it doesn't work, 'cause I don't know what I'm spending.

[00:14:44] Suzy Davidkhanian: Yeah.

[00:14:45] Carina Lamb: I was very late to the scan-as-you-shop party.

[00:14:47] Carina Lamb: I don't know why. I just hadn't really used it. And now I've started using it, I'm like Bill. I have a complete meltdown if it's not available to me- Mm ... because it just saves the biggest pain point. Actually, self-checkouts Are a massive pain point because [00:15:00] barcodes won't scan or you've got an unexpected item in the bagging area or, you know, it's a nightmare.

[00:15:05] Carina Lamb: Um, and they'll have loads of assistants on trying to run around helping people, but it doesn't always work. This isn't just Tesco, this is, like, supermarkets generally. So the scan-as-you-go is, seems to me a much more efficient way of doing it, and it just saves you all of that kind of checkout nightmare at the end.

[00:15:20] Suzy Davidkhanian: Well, what I heard from this was sometimes it takes a minute to get consumers to try and adopt a new technology, but once they do, if you've really removed a real friction point, you've listened [00:15:30] to your consumers, then maybe you will have them hooked. And so then you will have explained to them why it's so critical, and it helps the retailer too because they probably have better, you know, they better understand their inventory, they have better control over what, where, when, who, data, a- you know, it's like a win-win for everybody.

[00:15:48] Suzy Davidkhanian: The hurdle is getting people to use it.

[00:15:50] Bill Fisher: Yeah, I'm, I'm very privacy conscious and data conscious with my online persona, but Tesco can have all of my information because removing this friction, it [00:16:00] just, it makes my life better.

[00:16:02] Suzy Davidkhanian: Yeah.

[00:16:02] Bill Fisher: A lot better

[00:16:03] Suzy Davidkhanian: Karina, what would you do if you were CEO for the day?

[00:16:06] Carina Lamb: And that was literally the most perfect segue into my CEO for a Day idea, that you'd think that we'd actually kind of planned it.

[00:16:13] Carina Lamb: Um, so if I was Tesco CEO for the day, I think you can predict what I'm gonna say, 'cause I'm just obsessed with this whole area at the moment. Um, I'd be really leaning into AI and doing something like building a kind of really powerful grocery agent, perhaps even with a kind of health [00:16:30] intelligence layer on top, and just make something that no one else...

[00:16:33] Carina Lamb: You know, leverage all of this amazing data they have, and create something that no one else in the UK market can replicate, and I really think that they could do that. And if you look at kind of where Walmart is with Sparky, I think it's already driving something like a 35% increase in average order value, and I think Tesco just has a similar opportunity.

[00:16:51] Carina Lamb: It's in a similar kind of leading position, has a really strong foundation 'cause of Clubcard and dunnhumby, and it has so much information on household [00:17:00] products, what people are buying. It knows probably more than, about what they eat than the NHS does. It knows, you know, who's shifting to high protein, who's buying alcohol.

[00:17:09] Carina Lamb: I just think they've got this extraordinary data position, and they could create something that's genuinely useful for their customers and helps them plan, helps them become more healthy, helps them remove frictions in their shopping. And like you said, it would also then deliver back for the business, and it would drive higher order values, it would drive more loyalty.

[00:17:29] Carina Lamb: So I [00:17:30] just think with their kind of data depth, their footprint, the kind of expanse of Clubcard, it has such huge penetration.

[00:17:37] Suzy Davidkhanian: Karina, for you, is it more of a AI shopping assistant, like a Sparky, or more like a nutritionist, nurse practitioner, cook sort of all rolled into one that helps you really get organized

[00:17:51] Carina Lamb: with your life?

[00:17:51] Carina Lamb: Um, I think it's kind of neither, actually. Okay. Like, well, kind of maybe a bit to the latter. I don't know. I think it's like a kind of, um, household management agent, you know? [00:18:00] It helps you... It knows when you're gonna run low on things, but it can also then help you with, you know, planning healthier meals or indeed just planning meals generally if they're not healthier.

[00:18:10] Carina Lamb: I mean, I haven't mapped it out yet exactly, um, but I just think that they have such a kind of strong market position to really lean into this, and I think if anyone's gonna do it really well, they have the potential to do it really well. But like you said, I think it would take a moment to get people to use it, but I think it could be one of those things that once people do use it, they can't imagine how they ever lived [00:18:30] without it.

[00:18:30] Suzy Davidkhanian: I, um, fully support making my life easier, especially if it comes with a virtual cook that can- Plan everything for me and tell me what I have and what I need, which leads me to, I wonder if one day they'll also get into ... I know this is a, a beat from the past, but the Internet of things, I think, with AI should be coming back, and that we should have smart appliances that tell you

[00:18:50] Suzy Davidkhanian: Because with the Dunnhumby, remember the, like, big example was, "I know how often you buy milk. I know how often you buy cereal. If you haven't bought it at that rate, I'm gonna give you a coupon for cereal, [00:19:00] so you come back to me and buy your cereal"? I feel like a smart fridge would really help with that as well.

[00:19:05] Carina Lamb: Yeah, for sure.

[00:19:06] Suzy Davidkhanian: Well, that was fun. Now, for our last segment, I want to talk about some of the other things that they're really well known about. We've touched about some of them already, but I thought we could think about each of these different pieces that make Tesco magic, and think about it in a do we keep it, do you cut it, or do you reinvent it, a tiny tweak, and what would that be?

[00:19:25] Suzy Davidkhanian: So I'm gonna throw out some very Tesco-y features, and you tell me, do they stay, [00:19:30] is it time to move on, or do we tweak them? Bill, self-checkout. People hate to use it, but it sounds like most people use it. What do you think?

[00:19:37] Bill Fisher: So scan as you shop, are we classifying that- Having- ... as self-checkout? 'Cause that we keep 100%.

[00:19:42] Bill Fisher: It's incredible. For the big out-of-town stores, works a treat. It's a little bit clunky if you're going to the Tesco Express. You don't ... I mean, even for the store, there's not a lot of real estate, so you don't want a whole wall of these terminals. Um, so scan as you shop is great, but self-checkout, there are problems with it I've [00:20:00] identified.

[00:20:00] Carina Lamb: So a tweak. Mm.

[00:20:01] Bill Fisher: Item in the bagging area, as you mentioned earlier, Carina, does my head in. It's so annoying that I ... I think I rarely go into a, a Tesco Express and don't have to have someone help me because something hasn't been weighed correctly. So something needs to be tweaked, but I don't have an answer to it.

[00:20:16] Bill Fisher: But I, I, I think keep, but tweak.

[00:20:18] Suzy Davidkhanian: Carina, I'm guessing-

[00:20:19] Carina Lamb: Yeah, I completely agree with Bill there. I mean, I think they have to keep it. Just the kind of, um, you know, there's a reason that all the supermarkets moved to self-checkout, and as much as they'd like to say it's customer convenience, [00:20:30] it's not. It's cost convenience on their part, right?

[00:20:33] Carina Lamb: Like, that's why they're doing it. But I think it is a friction, and I think- It can cause big friction for consumers. It is really frustrating. I don't really know how you fix it. I think that kind of scan-as-you-shop is great. They have been doing some kind of self-checkout-y computer vision AI trials. We know from kind of Amazon in the UK that that's also not always that popular.

[00:20:57] Carina Lamb: So I don't know what the answer is, but I think there needs to be a [00:21:00] reinvention that makes it just w- it just needs to work better.

[00:21:03] Bill Fisher: I, I- Yeah ... you know, I wonder, we've spoken about this. I wonder if we had mobile scan-as-you-shop, so then it takes away all that real estate that it would need for the terminals, and you just use your mobile phone, go into the store, scan.

[00:21:13] Carina Lamb: But I think not everyone wants to be using their phone for scanning when they're in the shop because they might wanna use their phone to call their mom to ask if they want- Yeah ... you know, I think that's the only problem with a mobile

[00:21:23] Suzy Davidkhanian: only. Well, I'm surprised that you just can't pay like on the Whole Foods terminals here, when you do self-checkout, you can press the button for [00:21:30] it to use your own credit card that's in your profile.

[00:21:32] Suzy Davidkhanian: So if you have to be a club card member, then they should have your credit card information, and so that should be an easy button. I'm gonna move us on to meal deals, Carina. Cultural institution, I think for most of Europe, I would say, but definitely in the UK, where you get to bundle and save, take away decision-making.

[00:21:51] Suzy Davidkhanian: What do you think about that? Keep, reinvent, or cut?

[00:21:54] Carina Lamb: So this is a reinvent. It's absolutely a keep. Like you said, it's a cultural institution. For people that don't know what a meal deal [00:22:00] is, you'll have a selection of sandwiches, snacks that can range from kinda crisps or chocolate bars, or there are some healthier options now, and then drinks, and you get to choose, you know, one of each for, is it £3.60 now if you're a club card member, Bill?

[00:22:15] Bill Fisher: I don't know

[00:22:16] Carina Lamb: Something around that That's like, like

[00:22:17] Suzy Davidkhanian: $5. It's not-

[00:22:18] Carina Lamb: Yeah, for a fairly low price point. So it's a culture. Everyone's obsessed with Tesco meal deals. They absolutely can't get rid of it. It's a really good footfall driver for the express formats, and it's especially important in that kind of cost of living [00:22:30] environment.

[00:22:30] Carina Lamb: But I would say it probably needs to reinvent it a little bit into more of a multi-tiered ecosystem. So they do offer some premium options, and they have done some healthier snacks, but I think they could kind of push further into that and offer a bit more variety and maybe a kind of tiered pricing structure to reflect that.

[00:22:49] Carina Lamb: So they're kind of doing it a bit, but I think they could be a bit braver with it.

[00:22:53] Suzy Davidkhanian: Bill?

[00:22:53] Bill Fisher: Yep, agree. 100% keep. Um, and I was gonna say exactly the same thing about tweaking towards this trend around healthy eating. [00:23:00] Mm-hmm. But I, I think that's relatively easy to build in, right?

[00:23:02] Carina Lamb: Yeah.

[00:23:03] Suzy Davidkhanian: My last one for you guys is we talk a lot about retail media.

[00:23:05] Suzy Davidkhanian: We talk a lot about digital screens, interactive screens in the store. It sounds like Tesco has figured it out, retail media screens in store. It's integrated into the shopping experience. Seems like it's personalized. Takes up not a lot of space. I'm not sure. Tell us, keep, reinvent, or cut. Bill?

[00:23:25] Bill Fisher: Keep. We sp- I, I kind of made my, my opinion clear about the [00:23:30] retail media side of things, particularly this real estate on the Scan as You Shop devices, and if it can be on mobile devices as well, that would be amazing.

[00:23:36] Bill Fisher: The in-store stuff as well, the end caps and the big screens. I mean, the UK's pretty good on this, right, Corina? You know this better than me. Yeah. You track it closer than I do. But some, some of the stores in the ... I mean, my local- Big Tesco direct, the big out town hyper store, um, has big screens all over the place, and it's, it's really engaging.

[00:23:55] Bill Fisher: I, I, I notice it.

[00:23:57] Carina Lamb: Oh, yeah. Mm.

[00:23:57] Bill Fisher: You know, it's, it's, it's bright, it's [00:24:00] bold. Um, if you wanna get your brand out there, people are gonna see it, and I think Tesco is, is moving really well in this space. As I mentioned earlier, I think it can do a little bit better, but it's, it's already doing great, and, uh, definitely keep it.

[00:24:13] Carina Lamb: Yeah, 100% agree. Um, it's a win-win for consumers, for brands, for retailers, right? Like, the retail media not only allows Tesco to be price competitive and keep prices down for consumers, but it also can now serve them with really [00:24:30] personalized adverts. So maybe not so much the kind of big digital screens, but as Bill said, those handheld scanners, they're even kind of geo-ing it now, so it knows where you are in the store- Mm-hmm

[00:24:40] Carina Lamb: and can give you very relevant promotions. I think, you know, for the shopper, that's great because who doesn't want to have an offer on something that you're about to buy? You're, you were gonna pay a pound for a pack of biscuits, and you're gonna get an offer for 50p. You know, why wouldn't you love that?

[00:24:53] Carina Lamb: It's great for Tesco 'cause it enables it to keep its margin, and it's great for brands because, as Bill said, there's no better way to get in front of [00:25:00] people in the UK. You know, retail media, we know is, in-store retail media is really important in the UK. Grocery penetration, kind of e-commerce penetration is lower than other categories.

[00:25:11] Carina Lamb: So in order to really have that scale, you need to have the in-store piece. So 100% keep.

[00:25:17] Suzy Davidkhanian: This is the retail ecosystem that I want to keep talking about. They have ... We didn't even get to banks, and they have a joint venture with mobile phones, with, uh, Virgin Media. I mean, this is [00:25:30] the store, the brand, the platform that everybody should be paying attention to.

[00:25:34] Suzy Davidkhanian: But unfortunately, that's all the time we have for today. Thank you, Bill.

[00:25:38] Bill Fisher: Thanks for having

[00:25:38] Suzy Davidkhanian: me. Thanks, Carina.

[00:25:39] Carina Lamb: Thanks, Suzy. Always good to be on.

[00:25:41] Suzy Davidkhanian: And thank you to our listeners and to our team that edits the podcast. Please leave a rating or review, and remember to subscribe. I'll see you for more Reimagining Retail next Wednesday.

[00:25:50] Suzy Davidkhanian: And on Friday, join Marcus for another episode of Behind the Numbers, an EMARKETER podcast.