Tesco PLC has a simple approach to publicize its new U.S.-based Fresh & Easy supermarket chain: no advertising.
The U.K.-based retailer has opened four of its Fresh & Easy Neighborhood Markets in Los Angeles County, with an additional 10 stores at various stages of preparation.
So why did Tesco hire three marketing firms, including local ad shop Deutsch LA?
Deutsch LA President Mike Sheldon said the launch will focus on the stores themselves. "Our belief is that if you give consumers exactly what they want, they'll come a first time and try the store, fall in love with the brand and keep coming back."
Deutsch helped the British chain adapt to American tastes by fashioning its store design, labels and packaging.
Thanks to an emphasis on U.S. consumer research, Tesco didn't attempt to import its European style to Southern California.
"When Tesco came to the market, they left all their British sensibilities at home," said Sheldon. "They have tremendous expertise in this area, so they had lots of smart business practices, but there wasn't any British flavor for this brand."
Those business practices include a detailed scientific approach to local markets. In California, the company sent researchers into the homes of potential customers to study how they cook, eat and shop. Participants were selected to represent a full ethnic and economic cross-section of L.A., according to Fresh & Easy spokesman Brendan Wonnacott.
Tesco also brings financial clout to the U.S. market. The world's third largest retailer, behind Wal-Mart and Carrefour, plans to invest $5 billion during the next five years to open stores in California, Nevada and Arizona.
"Fresh & Easy Neighborhood Market is a concept designed for Americans, by Americans," said Roberto Mu & #324;oz, director of neighborhood affairs and communications at Fresh & Easy's offices in El Segundo. "Although we have based other formats on the U.K. stores, this project is entirely different. So it seemed natural to call it what it said on the door. It's a fresh place to shop, easy to get into and out of."
Tesco brought a background in research-based retailing to the launch. Mu & #324;oz said research showed U.S. consumers wanted fresh food, low prices and an easy shopping experience. Everything in the store from shelves to package sizes to labels are based on those criteria.
"Clear, easy to read, simple, straightforward those themes run through all the product package designs," said Mu & #324;oz.
The only traditional media Fresh & Easy will employ is a limited direct-mail effort. Neighborhood residents around the stores will receive fliers, but they won't contain the standard money-saving coupons. Fresh & Easy doesn't offer coupons, "just everyday low prices," Mu & #324;oz said.
According to Lee Peterson, vice president of creative services at the retail consulting firm WD Partners, low-advertising launches have a short but successful track record among a young generation of retailers, including Starbucks, Trader Joe's and Whole Foods.
"I think that's really smart," Peterson said of the Fresh & Easy strategy. "No matter where you run an ad these days, you just aren't sure anybody is going to see it. Your audience is slivered and your expectations for a return on your investment are slimmer than ever. So why not go after the one experience you can control?"
If a shopping-based campaign works, it creates word-of-mouth, Peterson explained. He cites Starbucks as a perfect example. "Fundamentally they raised that brand on the store experience. They grew 10,000 stores without advertising."
But he questions if Fresh & Easy can execute on the same level. After touring six stores, Peterson estimates that about 80 percent of the products carry the Fresh & Easy logo. If enough of those products don't live up to consumer expectations, it reflects not just on the individual item, but the entire store.
"That's still a question: Is the product going to drive sales?" Peterson said. "Obviously, the market will decide."
Deutsch put significant efforts into making the store fit American sensibilities. The agency worked extensively with Pemberton & Whitefoord, a London-based brand consultancy, and Schorleaf, a San Francisco firm that designs retail environments. At one point, the three companies collectively built a 10,000-square-foot mock-up of a store to test the consumer experience.
Fresh & Easy opens with more than 1,500 private-label products. P & W; handled package design for about 600 grocery items, while Deutsch took 900 frozen and fresh products. Deutsch also created the chain's Web site, uniforms, truck signage, grocery bags and corporate letterhead, plus the direct-mail fliers.
Peterson calls the Fresh & Easy format a combination of a traditional supermarket, a convenience store and a restaurant. The stores sell a lot of prepared foods and organize the products by mealtime rather than type of food. For example, in the morning they have orange juice, bowls of granola or sweet rolls; in the afternoon, wrapped sandwiches; by dinnertime, hot chicken or a full meal. "It's grab-and-go, or take-home-and-heat, or just eat-in-the-car food," he said.
But whether Fresh & Easy can differentiate itself in a market crowded with traditional supermarkets, big-box warehouse stores and specialty convenience stores remains to be seen.
"It's a little more convenient than a traditional store," Peterson said. "But it's still a grocery store."
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