News and Views
 

- April 4, 2007 -

 
     
   
     

Tesco’s CEO Identifies Key Retail Trends

 
     
 

Sir Terry Leahy sees opportunity in simplifying life for shoppers, supporting interest in “green” and healthy products; consumer “trust” is also increasingly important

 
 

 

SCDigest Editorial Staff

The News: Our friends at the RetailWire reported this week on a speech by Sir Terry Leahy, chief executive of Tesco, the U.K. retailer soon to have a U.S. presence, in which he identified seven trends he believes will have a swift and dramatic impact on retailing either presently and/or in the near future.

The Impact: The trends are primarily from a consumer point of view, but those companies that can best align their supply chains with these trends and opportunities will gain market advantage.

The Story: Speaking at the World Retail Congress in Barcelona, Leahy identified these seven key trends:

  • Consumer desire for simplicity: Companies that manufacture or sell products and/or services that make the lives of consumers easier will be richly rewarded.
  • Consumer desire to save time: “People are working later so they want to be able to pick up something on the way home. That's why we came up with our Express convenience stores - they are now our most popular format, and provided the inspiration for our expansion into the United States."
  • The “Immortality” factor: Consumers looking for healthy foods, and beauty and other products to reduce aging. Leahy cited the fantastic growth of organic foods.
  • Globalization: Impacts product sourcing, market expansion opportunities, and sourcing of services. Leahy said almost all of Tesco’s IT resources are now in India.
  • Consumer access to information: Not only can consumers compare prices with a click of a mouse, they “can look at a retailer's ethical or environmental policies and find out what is being said about them anywhere in the world."
  • Importance of trust: Leahy said this is increasingly important to consumers, takes years to build, but can be heavy damaged in an instant.
  • “Green” consumerism: "All our research shows that consumers are more and more aware of their carbon footprint, and that they want us to help them tackle climate change,” according to Leahy.

While these are all pretty well-known trends, it is a pretty good summary of what is driving many retailers today. The two questions that occur to us are: (1) How can retailers exploit these well-known trends in a way that provides differentiation? and  (2) How can the supply chain best support those strategies?

What are your thoughts on Leahy’s seven trends? What would you add? What role can supply chain play, if any? Let us know your thoughts.

 
     
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