Marketing: Tesco's Fresh & Easy Launches E-Mail Promo Alert Program; Something Fresh & Easy Buzz First Suggested it Do Many Months Ago

Beginning early this year, and in a few pieces since, Fresh & Easy Buzz has written about what in our analysis is a simple marketing opportunity Tesco's Fresh & Easy Neighborhood has missed since it opened its first first small-format, convenience-oriented combination fresh foods and grocery markets in November, 2007.

That missed marketing opportunity is the lack of the use of a simple e-mail address-based alert function on its Fresh & Easy Web site in which the retailer can alert customers and potential customers to its regulars advertising circulars, coupons, company news and related promotions and information, a function many food and grocery retailers, including the fast-growing small-format Aldi discount grocery chain, offer.

For example, below is a paragraph about the missed opportunity from a piece we published on May 4, 2008:

"Additionally, although we searched for it, we can't seem to find a function on the Fresh & Easy website in which a customer or potential customer can put in their email address and receive the online advertising circular in their email box like one can with Aldi. Adding this function is cheap to do, and Fresh & Easy is missing the boat by not having such a simple yet powerful tool on its website. [If there is such a feature, and we missed it, it means it's hard to find because we searched all over the site for it.]" Read our complete May 4, 2008 story on the topic here.

The reason, as it says in the paragraph, we searched all over the Fresh & Easy Neighborhood Market Web site but couldn't find such a function is because one didn't exit -- until this month that is.

Tesco's Fresh & Easy, perhaps by mere coincidence to our suggestions, has this month launched just such an e-mail-based alert function on its company Web site, which you can find here.

Here's what Fresh & Easy Neighborhood Market says in promoting the new e-mail function (graphic at top of the piece) and what we suggested could also become a valuable marketing and promotional database over time:

Are you a friend of fresh & easy?

'We've made it easy for you to get the scoop on our latest news , budget prices and special offers. Sign up below and we'll make sure you know what's happening around your store! Plus by signing up now, you'll receive an exclusive coupon for $6 off when you spend $30 or more at fresh & easy by December 24, 2008'.

Below is the response people get once they sign up for Fresh & Easy's e-mail alert program:

Below the text is a link where consumers can click and download Fresh & Easy's current $6 off total store purchases of $30 or more online coupon. [By the way, we would change the header in Fresh & Easy's adveretising text printed above in italics to: "Become a 'friend of Fresh & Easy.' It's much more inviting than asking the question in the header: "Are you a friend of Fresh & Easy?" which sounds a bit exclusionary. What if I'm not a "friend" but might want to be, for example, as in have never been in a Fresh & Easy store but might want to become a customer. It's a simple distinction -- but we think an important one.]

We don't get the "exclusive" aspect as it relates to Fresh & Easy's use of that term in the ad copy, since the $6 off coupon is the one Fresh & Easy gives out to everybody. "Exclusive" has a specific meaning after all and certainly doesn't apply to the coupon. But minus using the term "exclusive" we think it's a good idea to offer it -- if the grocer is going to offer the coupon at all -- as part of an incentive to get customers and potential customers to sign up for the e-mail based alerts.

Food and grocery retailers like Aldi, Safeway Stores, Inc., Kroger, Whole Foods Market and many others -- including many in Southern California, Nevada and Arizona where the Fresh & Easy markets are located -- have been using e-mail alerts for a long time. It's a simple, cheap and effective way to communicate with consumers.

It's also a natural, 21rst century way to get a retailer's weekly grocery ad into the hands of shoppers in an inexpensive and alternative (in addition to paper) way. Imagine the money retailer's could save if they can eventually eliminate paper advertising circulars, for example.

Having an e-mail alert function is something Tesco's Fresh & Easy Neighborhood Market should have been doing long ago. But it has to date been behind the marketing curve on this and so many other areas, particularly relating to the use of the Internet, which it should be a leader in rather than a follower. For example, imagine if the started the e-mail alert program in January of this year -- the grocer would have a nice data base built by now.

Additionally, since Fresh & Easy's customer base appears from our research to thus far be overwhelmingly comprised of younger people (about age 18-35), a group that uses the Internet and personal communication devices as second nature, the retailer should use the Internet and the various forms of electronic communication available to it like...well, second nature, in our analysis and opinion.

At its sign up site, Fresh & Easy indicates it also will eventually sent text message updates as well as e-mail alerts. Using text messaging alerts to personal electronic communication devices -- mobile phones, Blackberry's, iphones -- is something we've been suggesting in Fresh & Easy Buzz offers great potential for marketers in the food, grocery and consumer packaged goods industries.

For example, we see a day very soon when consumer packaged good manufacturers can send coupons directly to a shopper while she is in the aisle at a grocery store. For example, say a shopper is in the household cleaning products aisle. She could press a button on her mobile phone or other device and get a list of coupons for laundry detergent -- Tide, Cheer, even the store private label brand. No worry about printing any coupons out. The stores would be hooked up to companies offering the service. There could be a simple way to transmit the coupon data from the customers' hand-held devices to the stores' point-of-sale systems as the shopper has her purchases checked out, the coupon values being deducted from her order.

This is just one example of what we believe are a myriad of marketing uses, and convenient options for consumers, of digital technology and its application to food and grocery marketing and shopping.

Promoting e-mail alerts on the MyPoints.com system

Tesco's Fresh & Easy also is promoting its e-mail alert program via the MyPoints.com reward program (promotion graphic from MyPoints.com pictured above), Fresh & Easy Buzz has learned. Consumers with a MyPoints account recently received an e-mail alert, as they do from other companies using the system, announcing the Fresh & Easy program. Below is the text of that Mypoints.com alert as it was sent to users:

Get Your Points!
"Now that you've read the BonusMail, visit Fresh & Easy Neighborhood Market™ online. Receive 5 Points. It then offer a link to the Fresh & Easy Web site."

In addition to MyPoints.com users getting five MyPoints bonus points (Mypoints' are similar to credit card points or airline miles in concept and use), which Fresh & Easy pays MyPoints.com for providing its users as part of the advertising arrangement, Fresh & Easy is offering the MyPoints.com users that sign up for the e-mail alerts on its freshandeasy.com Web site a coupon for a free Fresh & Easy reusable canvas shopping bag, which they can redeem in-store if they spend more than $10 at a Fresh & Easy market.

Since Fresh & Easy sells these bags for 99-cents in-store, we don't see it as much of a deal, and thus doubt if there will be much action in regard to consumers going to crazy over getting a 99-cent canvas bag for free in return for spending $10 at the store. Fresh & Easy should also have offered its $6 off coupon to the MyPoints.com users, along with the bag offer. Why not?

But using MyPoints.com as an additional avenue to promote the e-mail alert campaign is a good idea, in our analysis and opinion. Doing so taps into an established base of Internet savvy consumers who regularly use online-based marketing tools and programs offered by companies. It's smart for Fresh & Easy to piggyback on this base, we believe, even if the canvas bag incentive is rather on lean-incentive side. The main incentive to MyPoints.com users, in all promotions, are the five free MyPoint.

We are wondering why though Fresh & Easy hasn't e-mailed its current online promotional flyer to e-mail addresses, at least ours and those of a few readers we know, since we -- and they -- have already signed up for the e-mail alerts? In fact, you receive nothing via e-mail from Fresh & Easy after you sign -up -- not even a simple inbox message alerting you to the fact that something will be coming in a week or two, like the message we mentioned earlier in this piece that you get on the company's Web site after putting in your name and e-mail address.

It's simple to create a simple "bounce back" reply via e-mail like this. It's a good idea to do because not only does it provide instant feedback via e-mail to the person who just signed up -- something that's a good sign of things to come -- it also allows Fresh & Easy to get its first message (why not include a link to the $6-off coupon in a simple two or three sentence "bounce back" response if it need be limited to such) to its new e-mail alert participants right way.

God (and the Devil too it is said) is in the details. Add Internet savvy consumers to that list. Those consumers used to using the Internet regularly, like the target consumer base Fresh & Easy is (or should be) after with its new e-mail alert program, are used to and like instant response -- that's why they not only use computers but portable electronic communication devices as well.

Therefore, not getting any response from Fresh & Easy via e-mail after signing-up for the e-mail alerts program tends to short circuit the "alert" aspect of the program. It also makes users wonder if their e-mail sign-up went through, since they are used to getting immediate responses (instant feedback) from nearly all similar Web site sign ups. The grocery chain should fix that and add an immediate e-mail response "bounce back" posthaste, in our analysis. Follow through is key to everything a food and grocery retailer does. And details matter always, especially in marketing programs.

A Single Bird in the Ad (Even Wrapped in Bacon and Sage) Does Not Make For A Good Thanksgiving Promotion For A Neighborhood Grocer For 'Everybody'

Analysis & Commentary: Tesco Fresh & Easy Neighborhood Market's Thanksgiving 2008 Advertising Circular and Promotion

Benjamin Franklin's famous letter to his daughter Sally about why he wanted the turkey to be the national bird of the United State's instead of the bald eagle. Franklin wrote the letter to Sally on January 26, 1784 from France. She was in Philadelphia -- "For my own part I wish the Bald Eagle had not been chosen the Representative of our Country. He is a Bird of bad moral Character. He does not get his Living honestly. You may have seen him perched on some dead Tree near the River, where, too lazy to fish for himself, he watches the Labour of the Fishing Hawk; and when that diligent Bird has at length taken a Fish, and is bearing it to his Nest for the Support of his Mate and young Ones, the Bald Eagle pursues him and takes it from him.

"With all this Injustice, he is never in good Case but like those among Men who live by Sharping & Robbing he is generally poor and often very lousy. Besides he is a rank Coward: The little King Bird not bigger than a Sparrow attacks him boldly and drives him out of the District. He is therefore by no means a proper Emblem for the brave and honest Cincinnati of America who have driven all the King birds from our Country . . .

"I am on this account not displeased that the Figure is not known as a Bald Eagle, but looks more like a Turkey. For the Truth the Turkey is in Comparison a much more respectable Bird, and withal a true original Native of America . . . He is besides, though a little vain & silly, a Bird of Courage, and would not hesitate to attack a Grenadier of the British Guards who should presume to invade his Farm Yard with a red Coat on."

Fresh & Easy Buzz has been writing for some time about the fact Tesco's Fresh & Easy Neighborhood Market has failed to create and communicate a solid, clear value proposition for its small-format, convenience-oriented grocery and fresh foods stores, in our analysis.

We believe the primary reason this is the case is because the retailer has yet to define what the format is (is Fresh & Easy a discount grocery or specialty foods chain? Or both? Or more?) and it's retailing mission and focus are (are the stores really for "everybody" like Tesco says they are? If so, why is such a limited consumer demographic, mostly consumers aged 19-35, shopping the stores primarily? And not enough of them at that?)

As a result, the positioning of the Fresh & Easy is a muddle, as we've been arguing since December, 2007. We said give them time then. We said give them time in June and July of this year. But it's now nearly the end of November, 2008, and has been one year since the first batch of Fresh & Easy stores opened. The failure to position the stores is still as bad as it was in December, 2007, in our analysis. Why? Because of the reasons we stated above: The retailer still hasn't figured out the chain's format and mission, therefore there is no clear, comprehensive and solid focus and positioning for Fresh & Easy.

The grocer is using a shotgun form of positioning, merchandising and marketing (fire a bunch of shot out there and see what sticks) rather than a rifle approach, which is a clear, focused position and a comprehensive marketing communications program to then create the Fresh & Easy retail brand.

In fact, based on the thrust of Tesco's overall merchandising and marketing since the first batch of Fresh & Easy stores opened in November, 2007, our analysis is that the Fresh & Easy Neighborhood Market executive team is running a specialty foods chain, Fresh & Easy, and merchandising and marketing the stores in the main in that direction. Nothing wrong with that -- except that's not what Tesco says Fresh & Easy is.

The everyday low price, discount aspect of the stores has largely been obscured in the merchandising and marketing of the Fresh & Easy chain. The value proposition, which Tesco touted for over a year before the first store opened as being its key positioning factor for Fresh & Easy, along with convenience, has been nearly non-existent -- an after-thought when it comes to positioning, merchandising and marketing.

For example, for Thanksgiving Tesco's Fresh & Easy is promoting in-store, through a press release and in its current November 12-26 online and mass-mailed advertising circular, a gourmet, ready-to-cook turkey dinner, under the theme "Thanksgiving made easy," featuring a whole ready-to-cook turkey wrapped in smoked bacon and sage, along with including prepared side dishes and trimmings for six people for about $49, or $8 per-person. Here's the dinner promotional offering:

Ready-to-cook
fresh&easy Whole Turkey Wrapped in Smoked Bacon and Sage -- $2.29 Lb.

Prepared: Ready-to-heat
fresh&easy Mashed Potatoes -- $4.99/28 oz, or
fresh&easy Mashed Sweet Potatoes -- $3.99/24 oz
fresh&easy Herbed Stuffing -- $3.99/16 oz
fresh&easy Roasted Vegetables -- $4.99/19 oz
fresh&easy Turkey Gravy -- $3.49/20 fl oz
fresh&easy Cranberry & Orange Sauce -- $2.99/12 oz
fresh&easy 9" Pumpkin Pie -- $2.99 each

The $49 price for the gourmet turkey and trimmings (the turkey is gourmet while the trimmings are more mainstream) Thanksgiving dinner isn't bad at all -- it's about the same price nearly all of Fresh & Easy competitors in California, Nevada and Arizona are selling similar prepared Thanksgiving turkey/side dish/dessert dinners for. Except, the competitors' whole turkeys are already cooked in many cases, and they are your basic bird rather than being wrapped in bacon and sage or anything else. Many of these also feed 8-10 people rather than six.

We aren't saying a bacon and sage-wrapped turkey doesn't sound like it might be very tasty. The problem isn't with the dinner created by Fresh & Easy's in-house chef -- it's fine. The problem is, the Fresh & Easy Thanksgiving meal promotion is one a specialty or gourmet food store would offer, not one (at least making it its only advertised promotional offering) a neighborhood market that's positioned for everybody and claims it offers everyday food and grocery prices 15% -to- 20% lower than those of competing supermarkets would offer as its only Thanksgiving Turkey promotion. There is a disconnect from the attempted positioning of being a low-priced neighborhood market designed for all consumer segments and offering only the gourmet turkey promotion.

Such an offering would be fine as a secondary one by Fresh & Easy, say along with a value-priced Thanksgiving dinner (including just a basic, raw bird), as well as promoting basic, whole Turkeys at a hot price in the advertising circular.

But that's it. The gourmet bacon and sage-wrapped bird is the only turkey the grocer is promoting in its holiday ad. Fresh & Easy isn't promoting a value version of the dinner for say under $30 like the small-format Aldi USA discount grocery chain is doing, nor is the grocery chain offering fresh and frozen whole turkeys on sale for hot prices like Safeway Stores, Ralph's, Bashas and all of its other key competitor's are.

Aldi USA's value offering, which you can view here, is only $27.16 and includes a 14 pound Butterball brand whole turkey, which is one of the most popular brands in the U.S. The complete Thanksgiving meal fixings feed at least eight adults.

The positioning of Fresh & Easy with its Thanksgiving promotion is that of a specialty or gourmet market, plain and simple. If we may use a turkey metaphor: 'If your Thanksgiving holiday promotion looks like a gourmet turkey promotion (a bird wrapped in smoked bacon and sage), walks like a gourmet turkey promotion (higher-priced, prepared side dishes only) and is priced like an gourmet turkey promotion (higher than most consumers can afford this Thanksgiving holiday even though the price is decent for the perceived quality, and you offer no additional value-based options), it's a specialty/gourmet turkey dinner (promotion.)

For example, in addition to offering prepared turkey dinners at about $49, chains like Safeway (Vons in Southern California and southern Nevada, Safeway in Arizona, Northern California and northern Nevada) Ralphs, Albertsons, Bashas, Frys, Stater Bros, Food-4-Less and most others (all key competitors) all are offering a variety of turkey variations on sale this week. These range from promoting whole frozen birds for 38 cents -to- 49 cents per-pound if customers spend a minimum of $25 at the store, to selling frozen turkeys for 69 cents a pound (and some even less) with no minimum purchase requirements, to offering whole fresh birds for from 79 cents to about $1.39 per-pound.

These same supermarkets also are offering higher-end, premium birds, such as the popular Diesel brand free-range, all-natural turkey for as low as $2.29 per-pound, along with organic birds for a higher promotional price-point. A couple chains also are offering free turkeys (12-16 pounds) with a minimum total purchase of $100.

This Advertising and promotion is traditional. Every Thanksgiving U.S. supermarkets offer a wide range of turkey's -- usually at least three brands of frozen (a lower-end, medium range and high-end) and at least three brands of fresh turkeys (low, medium and high-end) -- for sale the week before Thanksgiving in their advertising circulars. Most also offer additional brands and versions, including premium, free-range and organic, as well as a couple value-added versions such as smoked, honeysuckle, ect. They do this because it works -- it appeals to the entire consumer spectrum, from lower income shoppers to the wealthy, or those who aren't wealthy but are willing to splurge and spend more for a premium turkey and higher-end trimmings.

It's our analysis that by promoting only one Thanksgiving offering, a ready-to-cook turkey wrapped in smoked bacon and sage, along with higher-priced ready-to-heat side dishes only, not only is Fresh & Easy missing the boat on drawing the majority of shoppers into its stores, its running a specialty food store promotion. There would be nothing wrong with this if Fresh & Easy was a specialty grocery. But it says it isn't. Rather it says it's a discount or everyday low price-format neighborhood grocery and fresh foods market designed for all consumers.

If that's the case, and positioning, then where are at a bare minimum the discount-priced and advertised fresh and frozen whole turkeys? And why not a value-version of a complete Thanksgiving dinner, along with the smoked bacon and sage-wrapped gourmet offering, like discount grocery chain Aldi USA is offering here, for example.

We say this with all humility and with zero pleasure: Tesco Fresh & Easy's November 12-16 Thanksgiving advertising circular is one of the worst Thanksgiving holiday promotions we've seen a grocer produce in nearly 30 years of working in and participating in the food and grocery industry in the U.S.

There's just no there there in the ad. No meat on the promotion's bones. No real value offered. No reason for a consumer to read it, comparing it to Safeway's, Kroger's and the other chain and independents Thanksgiving holiday promotions in California, Nevada and Arizona, and saying: 'I've got to shop Fresh & Easy for my Thanksgiving turkey and groceries.'

And in terms of promoting just the one turkey, the bird wrapped in smoked bacon and sage, most American consumers like a plain old bird for their Thanksgiving dinner. They then season it the way they choose. Feel free to ask the various U.S. poultry industry trade associations for their annual sales figures by type of bird sold if you don't believe us about the overwhelming popularity and sales of the plain old bird at Thanksgiving compared to all other variations.

A few consumers/cooks might even choose to wrap their plain old whole turkey in bacon, although we would guess that percentage would likely be about 1% of the U.S. population.

Additionally, most Americans like to buy a plain turkey because they generally serve Thanksgiving dinner to a number of family members, as well as often including friends at their holiday dinner celebrations.

Most if not nearly all U.S. consumers will shy away from buying a turkey wrapped in smoked bacon and sage because perhaps Uncle Jeff, who has high cholesterol, has been told by his doctor not to eat bacon, so he can't eat it. Or maybe because son Tom's wife is Jewish and doesn't eat pork. Then there's that crazy cousin Larry who hates bacon period. Not to mention all the kids who when they see a turkey wrapped in bacon and sage don't want any part of it. Too gross they might say, even though those of us who've enjoyed such a bird know its not gross at all. The plain turkey, seasoned by the home cook, is therefore the default bird for Thanksgiving in America.

Offering promotional variations in ads, like the bacon and sage-wrapped bird, on the plain whole fresh and frozen turkeys and turkey dinner package like Aldi's is fine. But they aren't a substitute, (rather an addition to) to offering the plain bird, unless the grocer doing so isn't concerned about sales. or drawing in holiday shoppers to its stores.

The point is, when feeding numerous family members, many from out of town or out of state even, on Thanksgiving Day, most Americans want to please all. Therefore they go for a basic, plain turkey most of the time and season it so that it appeals to most if not all of their dinner guests. Many offer a second entree as well.

The bacon and sage-wrapped turkey sounds tasty, although we prefer wrapping ours, on those rare non-Thanksgiving holiday occasions when we do so, in Pancetta. However, by making it the only offering in its Thanksgiving Day promotion and advertisement, Fresh & Easy is appealing to the smallest of consumer segments, rather then appealing to "everybody," which it could have done had it offered a plain bird, value version of the full Thanksgiving dinner, along with offering at least one frozen and one fresh whole turkey at a super hot price, like Safeway, Ralphs, Stater Bros., Food-4-Less, Bashas, Albertsons, Frys, Save Mart, Raley's and most others are doing, in its Fresh & Easy Thanksgiving holiday advertising circular.

Additionally, aren't ready-to-eat prepared meals a key aspect of Tesco's Fresh & Easy? Why no pre-cooked, ready-to-heat-only or ready-to-eat turkeys advertised for the holiday?

We suspect Fresh & Easy didn't advertise and promote this version, despite it being key to its prepared foods merchandising, because it feared it would be stuck with too many pre-cooked turkeys, having to mark them down 50% and toss many of them away after Thanksgiving. Safeway, Ralphs and most other chains are offering fully-prepared Thanksgiving meals for 8-10 for about $49 -to- $59, that include a pre-cooked turkey that just needs heating at home. Or in some cases if shoppers can get the pre-cooked birds home fast enough, keeping them hot, they just need to be carved and served.

If you view Fresh & Easy's November 12-16 advertising circular here, which is the grocer's Thanksgiving holiday promotion, we think you too will ask the same two questions we did when we first saw it: Where's the value proposition? Why no basic turkey dinner at a hot price? And where in the world are the fresh and frozen plain whole turkeys at a discount price? We had a couple other questions as well. But those were the key ones.

American consumers haven't been as financially strapped as they are this Thanksgiving since perhaps the recession of the 1970's. For many its even far worse than that. Based on its no frills, discount model, Tesco's Fresh & Easy should be offering at least one value-based Thanksgiving dinner, along with those discount-priced frozen and fresh whole turkeys we mentioned above, in its current holiday ad. By not doing so the retailer is missing the boat for what is the number one consumer spending holiday in the U.S. -- Thanksgiving. Where's the holiday value proposition? Look through the entire ad as well. Not much value. Few items even.

It's a time-tested empirical fact of American shopper behavior that U.S. consumers purchase most of their Thanksgiving holiday dinner, dessert and related food and grocery products at the store in which they decide to purchase their turkeys at, which the vast majority still serve on the holiday, although some serve ham or beef roasts. A few even serve chicken, lamb or a goose as their main course instead of turkey. But the mighty bird loved by Ben Franklin still remains far and away the number one Thanksgiving holiday dinner center of the plate item in American homes on the American-only holiday this Thursday.

In tough economic times like now many shoppers will cherry pick ads, going to two or three stores to purchase their holiday fixings. However, they still will buy lots of incremental items at the store where they purchase their turkey, ham or beef roast. That's why major U.S. chains and independents feature numerous varieties of turkeys (and hams , beef roasts, ect.) in their Thanksgiving holiday advertising circulars and promotions.

The promotional objective is to appeal to all segments of the consumer base -- from the lowest income end to the mid-range and often even the high-end. It's also to offer hot buys on the birds (often loss leaders in fact) in order to get consumers into the stores so they will buy other items. Get shoppers in with the cheap bird and hope they buy higher margin items along with other advertised products is the philosophy and practice.

Specialty markets on the other hand, especially those focused on the upscale shopper which most are, tend to focus only on the high-end Thanksgiving shopper, which this year is comprised of far fewer consumers. These are the consumers who would be more likely to buy a turkey wrapped with smoked bacon and sage to grace their holiday dinner table.

But we think most higher-end consumers wouldn't buy the bacon-sage-wrapped bird either. Rather they tend to go for a free-range, broad-breasted, organic turkey, then choose how they season it on their own. Perhaps rubbed with extra virgin olive oil and fresh garlic, then seasoned with sea salt, fresh, cracked black pepper, fresh rosemary, sage and thyme, which is a popular version for Thanksgiving.

Our analysis is Fresh & Easy has missed this empirical reality of U.S. food retailing and promotion this Thanksgiving. It's holiday promotion is pure specialty foods store, which would be fine if that's what Tesco would say Fresh & Easy is. But it isn't, according to the company. It's a neighborhood grocery and fresh foods market with low-prices positioned for all consumers, according to Tesco. But based on its Thanksgiving promotion it looks specialty foods store to us.

'The Promotional Pundit:' Old September 25, 2008 Online Coupon Post Removed From the Fresh & Easy Company Marketing Blog; See My Past Columns

Fresh & Easy Neighborhood Market director of marketing Simon Uwins or one of the grocery chain's marketing staffers has removed the September 25, 2008 post about the grocer's first online coupon from the company marketing Blog as I suggested in my recent columns should be done.

Read my past columns on the topic at the links below to learn what I wrote about the issue:

>October 10, 2008: 'The Promotional Pundit': Keeping the Marketing and Promotional Eye On the Ball; Fixing A Promotional Fiasco Fresh & Easy Isn't Even Aware Of

>October12, 2008: 'The Promotional Pundit:' More On the Online Coupon Fiasco: Tesco Fresh & Easy's Marketing Department to Launch A New Online Coupon Early Next Week

>October 13, 2008: 'The Promotional Pundit': Tesco Fresh & Easy Launches New $6-off Online Coupon Today; Post on Corp. Marketing Blog Remains -- Adding Insult to Injury

The old, September 25 post remained on the Fresh & Easy corporate marketing Blog until at least late last week.

The Promotional Pundit was alerted by a regular reader of the column yesterday that it had been removed.

It's good to see somebody at Fresh & Easy agreed with the Promotional Pundit and a number of Fresh & Easy Buzz readers who emailed me about the issue. Even more so, it's good the retailer is willing to self-correct.

Their were a number of readers of the Fresh & Easy marketing Blog who made comments on the Blog's September 25 post about being disappointed about not being able to get their online coupon when they clicked the link on the post, as you can read about and view in my previous columns linked above. When the readers/consumers clicked the link to go to the page where the coupon was supposed to be located, they were greeted with a message telling them the coupon had expired -- but suggesting they should go to their nearest Fresh & Easy market for great in-store low prices. Of course, since they were invited to obtain a coupon so they could enjoy "lower" prices, that wasn't a very pleasing solution to them.

As I wrote about in this October 13 column, "'The Promotional Pundit': Tesco Fresh & Easy Launches New $6-off Online Coupon Today; Post on Corp. Marketing Blog Remains -- Adding Insult to Injury," Fresh & Easy issued a new online coupon on October 13. That online coupon is being promoted on the homepage of the freshandeasy.com Web site. It isn't being promoted at all at present on Mr. Uwins' Fresh & Easy company marketing Blog. No new post regarding the new coupon replaced the September 25 post which I suggested needed to be removed -- and now has been removed from the Fresh & Easy company marketing Blog.

Even though the seven readers of the Fresh & Easy marketing Blog won't get an answer from Mr. Uwins or anybody else at Fresh & Easy to their comments about not being able to obtain their online coupon, at least by removing the post no further damage will be done from a marketing, branding and customer relations standpoint to Fresh & Easy.

That's the best thing a marketer can do in such a situation, which is why the Promotional Pundit suggested it needed to be done.

The comments from the seven consumers should have each been answered on the September 25 Blog post first though, telling each one about the new $6-off purchases of $30 or more online coupon, and providing the link to it on the homepage of the freshandeasy.com Web site. That would have been good customer service.

If a retailer uses a Blog as a marketing tool, it automatically becomes an interactive customer service tool as well. As a result, it is incumbent on the retailer to them answer readers comments -- positive or negative -- just like that retailer expects store-level employees to respond to questions from customers in-store. The Blog is in many ways merely an electronic extension of a physical storefront after all.

However, since the September 25 post is now gone (a positive event), it's a moot point in terms of responding to the comments from the readers/consumers. At least by removing the old post Fresh & Easy's marketing department is correcting a mistake, which I congratulate them for doing.

The first rule of marketing is: "But first, do no harm." An appendix to that rule is: "If you cause harm, immediately prevent further harm."

Fresh & Easy was slow on the draw in preventing further reputational harm by talking so long to delete the September 25 post. But at least they have now done so. That's a positive thing in terms of preventing additional marketing, branding and customer relations harm to the company.

'The Promotional Pundit': Tesco Fresh & Easy Launches New $6-off Online Coupon Today; Post on Corp. Marketing Blog Remains -- Adding Insult to Injury

Tesco Fresh & Easy Neighborhood Market launched its $6-off online coupon on its freshandeasy.com Web site today, as I reported yesterday in my column the grocery chain would be doing. As I reported, the coupon's value is for $6-off purchases of $30 or more in Fresh & Easy stores.

The coupon is located on the front page of the food and grocery retailer's freshandeasy.com Web site, on the left side at the very bottom of the homepage below the menu list. You can view it here. Scroll down to the bottom, left hand side of the homepage. Look closely as it is in a spot you likely wouldn't notice unless you are intentionally looking. The green color of the coupon link also tends to blend in with the page colors, making it less than easy to spot.

When you click on the coupon graphic on the homepage, it takes you to a page where the coupon is here. You click on a link and can download the coupon. Below is the promotional message at that link:




The new online coupon expires on October 19. That's one week from today.

In my column yesterday I reported the $6-off online coupon dropping today would have a three week shelf-life. That's not the case. Instead the coupon has a one week shelf-life. It expires on October 19, 2008. The Promotional Pundit can't be perfect. And, he was told by a couple good sources the original plan for the online coupon was for a three week duration.

The first Fresh & Easy online coupon, which I wrote about in my October 10 column, had a shelf-life of only four days. It came out on September 25 and expired on September 28. That online coupon had a value of only $1, good for purchases of $10 or more.

Click on the headline link to read my October 10, 2008 column here:'The Promotional Pundit': Keeping the Marketing and Promotional Eye On the Ball; Fixing A Promotional Fiasco Fresh & Easy Isn't Even Aware Of. Click on the headline link to read my column from yesterday, October 13, 2008, here: 'The Promotional Pundit:' More On the Online Coupon Fiasco: Tesco Fresh & Easy's Marketing Department to Launch A New Online Coupon Early Next Week.

In my column yesterday I suggested Tesco Fresh & Easy post today's online coupon in a easy to view place, such as on the home page of its freshandeasy.com Web site, which it has. I would suggest making the coupon advertisement a bit more easily visible than it is in its current location on the homepage though. Also a little higher-up on the page.

Fresh & Easy corporate marketing Blog

Unlike what was done with the first online coupon, their is no mention of the new $6-off online coupon on the Fresh & Easy corporate marketing Blog, which is authored and published by director of marketing Simon Uwins. That coupon was only promoted on the marketing Blog, with a mention as well on the grocer's page on Twitter.com.

However, the September 25 post announcing the first online coupon -- the $1-off purchases of $10 or more -- remains as of this evening at the top of the corporate marketing Blog. It's the one I wrote about in my first column on the topic on October 10 here and wrote about again in my column yesterday. The link on the September 25 post does now take the reader to the new $6-off coupon on the Freshandeasy.com Web site though.

There are eleven comments on that September 25 post announcing the first online coupon in the Fresh & Easy Neighborhood Market corporate marketing Blog. As I wrote about in yesterday's column, seven of those eleven comments are from Fresh & Easy customers unhappy about not being able to get an online coupon as the post says they can. They couldn't get it because when you click the link to the online coupon in that September 25 post it takes you to a linked page where you are told the coupon has expired. It even says "sorry."

You can read all seven of those comments in my October 13 and October 10 columns using the links above.

All of the current seven of those comments on the Fresh & Easy corporate marketing Blog still go unanswered by Mr. Uwins or any members of his marketing staff.

It appears Fresh & Easy Neighborhood Market isn't concerned about seven unhappy customers, assuming they have remained customers after their respective experiences with the first online coupon fiasco, which continues because the September 25 post remains up and the commentors'/consumers' questions remain without a response from Fresh & Easy. At least one of the commentors says she won't be shopping at Fresh & Easy anymore because of coupon issues and until they are resolved.

Marketing & promotions 101

The Promotional Pundit can't recall the last time he has seen a food and grocery retailer neglect consumers like this, especially since in the case of Fresh & Easy marketing director Simon Uwins he is using the Blog as a marketing tool. It looks to me like a better term would be "anti-marketing" tool in this case.

We all make mistakes, such as was the case Fresh & Easy made by not deleting the September 25 post, thereby creating unhappy consumers who clicked the link only to be told the online coupon was expired.

Those of us who publish Blogs know when it comes to readers leaving comments its the exception rather than the norm for them to do so. The fact seven readers of the Fresh & Easy corporate marketing Blog have left comments indicating being less than pleased about not getting their online coupons is a rather high number. Just imagine how many readers of the Blog also tried to get the coupon, were unhappy, but didn't leave a comment. We think its likely, based on seven that did comment, that number is easily in the hundreds.

Not answering the seven commentors'/consumers' remarks on the September 25 post, along with not deleting it or at least publishing a new post announcing the new $6-off online coupon launched today is pure lack of follow-up. And that's being kind. It's an example of a marketer taking his or her eye off the marketing ball. It also violates the first rule of marketing and promotions, which is: "But first...do no harm."

In this case the harm has already been done. And each additional day that September 25 post remains up makes the harm worse. It adds insult to injury.

For example, when I wrote my October 10 column, there were three complaints from consumers on that September 25 post in the Fresh & Easy marketing Blog. Just two days later on Sunday, there were four new ones.

Again, how many additional consumers read the September 25 post in the Fresh & Easy company marketing Blog just since I wrote my first column on Friday -- and again between yesterday and this evening when I am writing this -- and couldn't obtain their online coupon, were unhappy about it, but didn't comment as is the norm? Probably quite a few. Every customer a food retailer loses generally tells six or more family members, friends and co-workers about their bad experience with that retailer, and in the case where they stop shopping at that retailer's stores why they did so. Negative word of mouth advertising is not a good thing.

Sir Terry's ghost

One of the keys to the impressive global success of Tesco PLC. under the leadership of CEO Sir Terry Leahy has been the corporate culture he's promoted at the retailer's United Kingdom headquarters which emphasises attention to detail and follow-up.

However, It appears that corporate culture hasn't successfully made the journey across the pond from the UK to Southern California where Tesco Fresh & Easy Neighborhood Market's corporate headquarters is located. Until it does, we expect to see more examples of taking the eye off the ball like this and numerous other examples we've chronicled since December of last year.

Meanwhile, since there's no mention on the corporate marketing Blog about the new $6-off coupon located on the homepage of freshandeasy.com, despite the fact more than one of the commentors on that September 25 post ask in their comments when a new online coupon will be coming out. I suppose they will have to get lucky and find the link on the Web site. But they only have seven days to do so since that's when the online coupon launched today expires.

'The Promotional Pundit:' How Wal-Mart Can Use its Supercenters to Create Customers For its New Small-Format Marketside Stores in Arizona

Pictured above is a 200,000 square foot Wal-Mart Supercenter in the Phoenix, Arizona Metropolitan area. There's plenty of room inside the mega-stores for a 400-600 square foot 'Marketside' promotional kiosk.

We've been discussing the theme in Fresh & Easy Buzz that Wal-Mart, Inc.'s new Marketside format and stores -- the first four which opened officially on Saturday in the Phoenix, Arizona area cities of Gilbert, Chandler, Mesa and Tempe -- are a different retail animal from a strategic positioning standpoint than Tesco's Fresh & Easy stores are because for Wal-Mart Marketside is just one part of a four-format (Supercenters, Sam's Club, Neighborhood Market supermarkets and now Marketside) food and grocery retailing retail format strategy while Fresh & Easy is currently a single-play, single-format strategy in the U.S. for Tesco.

For example, we discussed the theme as part of an observational, analysis and commentary piece in the Blog published yesterday: "Wal-Mart's Marketside is More Than the Sum of the Parts of its Other Formats; While Time and Consumers Will Judge, We See the Format As A Stategic Fit."

In this piece today we outline and explain what we believe is a powerful marketing and merchandising aspect and tool of Wal-Mart's multi-format food and grocery retailing strategy which the retailer could use to not only create what we believe could be thousands of new customers (trial) for its four Phoenix region Marketside stores, but also use as an ongoing high-impact, low-cost marketing and cross-promotional tool which leverages its existing resources.

Those specific existing resources are the Wal-Mart Supercenter stores located in and near the four cities where the Marketside grocery and fresh foods stores are located.

Wal-Mart has about 70 Supercenters currently open and operating in Arizona. Additionally, there are a number of these Supercenters in and around Gilbert, Chandler, Mesa and Tempe, the four cities where the new Marketside stores are located.

Each Wal-Mart Supercenter is a form of media in and of itself in that tens of thousands of shoppers visit a typical Wal-Mart Supercenter each week. That's why so many consumer packaged goods marketers use (and pay to do so) Wal-Mart as their in-store advertising and promotional medium -- point-of purchase displays, brand signage, in-store brand videos, ect. It's also why Wal-Mart uses what's referred to as in-store shopper marketing so frequently. This essentially is using the store as the marketing medium as we described above.

With that introduction to the premise, here is one marketing and merchandising campaign we would launch right away for the four Phoenix region Marketside stores using the various Wal-Mart Supercenters located in and around the four Phoenix area cities.

The Marketside Supercenter Kiosk Campaign

First, we would install a "Marketside Kiosk" in every one of these nearby Supercenters. The kiosk would be about 400 -to- 600 square feet in size and located in a promenant part of the Wal-Mart Supercenter. Many Supercenters have space in the front of the stores designed for such promotional purposes. So in most cases that's where our kiosk would go.

The design of the in-Superstore Marketside Kiosk would mimic how the Marketside stores look essentially in terms of graphics and the like. It would be a mini faux Marketside store if you will.

The focus of the kiosk would be informational -- with brochures about Marketside, coupons to be used at Marketside handed out and related informational pieces. The kiosk would have a person working in it at all store hours. It also would be sensual -- tastes of Marketside preapred foods items being sampled in the kiosk.

Additionally, the Marketside in-Superstore kiosk would focus primarily (but not exclusively) from a merchandising or product selection aspect on the prepared foods offerings at the Marketside stores.

Prepared foods

For example,there would be a service refrigerated case in the kiosk where a person would hand out free samples of a changing selection of the various fresh, prepared foods offered in the four Marketside stores.

Mini mock-up

The kiosk would also have some mock shelving and such with a representative selection of products sold in Marketside so as to create that "Mini Marketside" store effect for the kiosk as we described earlier. Doing so also provides and reinforces the informational purpose of the in-Supercenter Marketside Kiosk.

Cross-promotional tool

We also would use the kiosk (and parts of the Supercenter) as a cross-promotional tool.

For example, we would place point-of purchase signs at every checkout lane in the front-end of the Supercenters. These signs would tell customers checking out that if they purchased $25 or more at the Wal-Mart Supercenter they could come over to the in-store Marketside Kiosk with their purchase receipt and receive a coupon good for free prepared foods items (say a $6 dinner entree) at one of the four Marketside stores.

We would run this promotion say twice a week for a month to start to create impact. Also, doing so on a more frequent basis could get expensive.

This in-store promotion does two things. First it drives shoppers over to the in-Supercenter Marketside Kiosk. Second, it ties-in what they purchased at the Supercenter with what they now can get for free at Marketside. We think it's a safe bet the majority of the Supercenter shoppers aren't going to have been previously aware the Marketside stores exist. They would be with this in-store promotion. They also sould spread the news through word of mouth advertising.

The cross-promotion is all about creating awareness of -- and driving consumers to -- one or more of the Marketside stores. Since you are dealing with existing Wal-Mart shoppers under the Supercenter roof, that's an additional bonus, since there's an implied loyalty to Wal-Mart by virtue of the fact the shoppers are shopping a Supercenter.

A 'Taste of Marketside'

Another in-Supercenter promotional event we would hold, using the Marketside Kiosk as the central organizing principle and marketing vehicle in-store, is a "Wal-Mart Supercenter Taste of Marketside."

We would pick a Saturday in which we would bring in selected employees from all four of the Arizona Marketside stores to the nearby Supercenters. Sampling stations would be strategically set up throughout the Supercenter -- from the produce department to the automobile parts department -- where prepared foods items from Marketside would be sampled to Supercenter customers by the visiting Marketside store employees. Of course, as part of the tasting the employees would hand out Marketside brochures, coupons and other promotional goodies to Supercenter shoppers, along with the various "tastes of Marketside" in the form of the prepared foods samples.

Each shopper also would receive a raffle ticket from the folks at the sampling stations. We would hold a drawing every 30 minutes in which a $25 gift certificate for free goods at the Marketside stores would be given away.

In order to get in the drawing, the shoppers would have to bring their raffle ticket to the in-Superstore Marketside Kiosk. That's where the raffle would be held. The drawing would take place in the kiosk and the winner announced each 30 minutes over the store's public address system. This would serve to not only create excitement but bring the shoppers back to the kiosk for a second look at Marketside. (they also need to return to the kiosk to get their coupon when they win the raffle.) It also makes shoppers linger longer -- and perhaps make additional purchases -- in the Supercenter. That's promotional synergy.

Synergy

Such promotional campaigns as we describe above are all about creating synergies. And only multi-format retailers can do so in the way we describe.

Additionally, the promotion is all about the "piggy back effect." That is using the established "big guy" (the Wal-Mart Supercenter) to assist the new, fledgling "little guy," (Marketside). Of course because of the synergies, the "big guy" benefits from assisting the "little guy," which is how it should be in muti-format retailing cross promotions, as well as it should be with life in general.

Marketside Kiosk as central promotional element

The Marketside Kiosk is the central promotional element -- and glue -- of this in-Supercenter cross-promotional campaign. The actual tactics we listed and detailed are far from the only ones that can be used once the kiosk is set up in the Supercenters. Additional promotions can be created, as well as having additional promotions feed off the ones we described.

The store is the medium, the kiosk the message

The store (Supercenter) is the marketing medium and the Marketside Kiosk is the message.

Think of it as just another aspect of shopper marketing. But instead of promoting brands and products in-store, you're promoting one of Wal-Mart's other formats -- it's newest one and the one that is different from all the others because of its "food-centric" premise, Marketside.

A promotion like this, which is cheap and uses existing resources (the Supercenters), can only be done by a multi-format retailer, as we mentioned earlier. You've got to have more than one format and the stores to do it.

We think its powerful because of the captured consumer audience that exists in the Supercenters, the pleasure shoppers get from food sampling in-store, the synergies it creates for both Marketside and the Supercenters, and a number of other high-impact reasons.

Most important, it will create much awareness about and drive lots of new customers to the four new Marketside stores in the four Phoenix Metro region cities. And once that phase of the in-Supercenter campaign is over, the kiosk can easily be used if desired for various promotions designed not only to generate new custoemrs for Marketside but also to retain them, along with coming up with various ways to assist in increasing the market basket sizes at the Marketside stores.

Think of it using a trade show analogy as well. The Wal-Mart Supercenters are the trade show floor, the Markeside Kiosk is the trade show booth, and the Supercenter customers are all prospective customers for the trade show's (in this case Marketeside) product, which is being offered in the "booth."

After all, the "big guys' (Supercenters) should always be the first in the family (Wal-Mart, Inc.) to give an assist to the "little guy," (Marketside). And with such synergies in play, that "big guy" will gain additional benefits for giving his smaller cousin (Marketside) that helping promotional hand.

Coming soon: What Tesco's Fresh & Easy can do counter-promotionally as a single-format retailer.

Perhaps Tesco's Fresh & Easy Did 'Listen' To Natural~Specialty Foods Memo's Analysis and Suggestions in it's Retail Marketing and PR Memo

Last Wednesday, April 2, we wrote this brief piece with a link to a "Retail Marketing & Public Relations Memo" the publication Natural~Specialty Foods Memo wrote that day regarding Tesco's Fresh & Easy Neighborhood Market's corporate blog announcement by marketing chief Simon Uwins that the retailer was taking a three month new store opening pause or hiatus.

Below is what we wrote on April 2, 2008 as an intro to the Natural~Specialty Foods Memo Retail Marketing and PR Memo story link (the original story from the food and grocery industry publication is linked in our April 2 post as well below):

A Retail Marketing and Public Relations Memo to Tesco's Fresh & Easy Neighborhood Market Management From Natural~Specialty Foods Memo

by Fresh & Easy Buzz: April 2, 2008

The food and grocery industry publication Natural~Specialty Foods Memo has a 'Retail Marketing and Public Relations Memo' to Tesco's Fresh & Easy Neighborhood Market senior management in today's issue.

The "memo," titled: "Retail Marketing and Public Relations Memo: What Tesco's Fresh & Easy Neighborhood Market Should Be Doing Now," talks about the current new store opening "pause" which we reported here on Saturday.

In the piece, the publication discusses the marketing, public relations and overall implications of the announcement as part of an total retail strategy. The piece also suggests Tesco's Fresh & Easy Neighborhood Market should have prepared for the mostly negative press reports which started coming out yesterday and today in numerous U.S. newspaper business sections, such as the Los Angeles Times, San Francisco Chronicle, Associated Press news service and others.

Natural~Specialty Foods Memo offers Fresh & Easy a strategic blueprint of how it could have prepared a strategic operations and media marketing strategy before posting the "pause" announcement in its corporate blog, including suggestions for how to not only deal with but also get on top of the news cycle. The piece also says any marketing and public relations strategy must be real and integrated with overall operations.

In fact, the marketing and public relations strategies would be good for Fresh & Easy anytime.

But they are especially important now, as it appears to us the retailer wasn't prepared for the mostly negative media coverage it's getting over the new store opening moratorium, along with the reports from analysts like us and others about the small-format, convenience-oriented grocery stores' sales underperformance to date, which these newspaper business section reporters and editors are including in their stories.

Lastly, the piece says "it's not too late" for Tesco to employ these strategies, if "Fresh & Easy senior management can be a fast-moving and nimble team."

Read the 'Retail Marketing and Public Relations Memo' to Tesco's Fresh & Easy Neighborhood Market from Natural~Specialty Foods Memo here.

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Fresh & Easy Buzz: Yesterday (April 8, 2008), we received the Tesco Fresh & Easy Neighborhood Market corporate press release reproduced below from the PRNewswire news release service, as did many other publications of all types:

Fresh & Easy to Give Away Free 'Bag For Life' For Earth Day

Grocer offers free reusable bags on April 22nd

EL SEGUNDO, Calif., April 8, 2008 /PRNewswire/ -- In celebration of Earth Day, Fresh & Easy Neighborhood Market today announced its 61 stores will bag groceries with free reusable "bags for life" for customers on April 22nd. The company encourages customers to reuse these bags and lessen their impact on the environment.

(Photo: http://www.newscom.com/cgi-bin/prnh/20080408/AQTU198.)

Fresh & Easy offers its customers two different types of reusable bags, including a $2.50 canvas bag and a plastic reusable "bag for life," which retails for $.20. The "bag for life" is larger and more durable than standard grocery bag and, if damaged, Fresh & Easy will replace the bag for free, forever. These bags are made with recycled material and are 100% recyclable.

"We want to make it easier for our customers to make more environmentally friendly decisions," said Tim Mason, Fresh & Easy CEO. "If everyone in the neighborhood shops with reusable bags, we can really make a difference."

Fresh & Easy has made a considerable effort to be a good neighbor and steward of the environment. For example, the company only sells energy efficient light bulbs, uses LED lighting in external signs and freezer cases, offers plastic, aluminum and glass recycling, and provides preferred parking for hybrid vehicles.

More broadly, Fresh & Easy has committed to build LEED (Leadership in Energy and Environmental Design) certified buildings and voluntarily joined the California Climate Action Registry to disclose its greenhouse gas emissions. At its distribution center in Riverside the company invested $13 million in a solar roof installation, which is one of California's largest at 500,000 sq. ft.

More information regarding Fresh & Easy Neighborhood Market can be found at http://www.freshandeasy.com/.

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Fresh & Easy Buzz: Finally, here is a link to a piece Natural~Specialty Foods Memo published yesterday (April 8, 2008) titled: "Retail Marketing & Public Relations Memo: Was Tesco's Fresh & Easy Neighborhood Market Listening to Our April 2 Memo?"

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Below are the key paragraphs in the Natural~Specialty Foods Memo piece linked above. However, we suggest you click on this link and read the entire piece from the food and grocery industry publication so you can understand the complete context, as well as get the full flavor of the key paragraphs reproduced below:

But, if we were in charge we wouldn't have stopped there in our pre-publishing of the "pause" strategy, for the post-pause news cycle period.

April 22, just two weeks away, is Earth Day.

Numerous grocery retailers, manufacturers and marketers are planning major Earth Day green marketing or green retailing promotions and activities for the day which celebrates the earth, conservation and environmental stewardship. We haven't heard of any plans for Earth Day from Tesco's Fresh & Easy.

Our second, "locked-and-loaded" post-pause corporate blog post news peg would have been tied to Earth Day. For example, why not an announcement from Fresh & Easy that it plans to give away thousands of free, reusable, canvass grocery tote bags at its 59 stores on Earth Day.

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Fresh & Easy Buzz: Our Observation: Well, to answer the question Natural~Specialty Foods Memo poses in the title of its piece yesterday---yes, it does seem that somebody at Tesco's Fresh & Easy Neighborhood Market was 'listening' to the April 2, 2008 memo. Of course, we don't know that for sure.

Further, as we write on Fresh & Easy Buzz regularly, it's our analysis that Tesco's Fresh & Easy Neighborhood Market needs to get out in front of a whole host of issues which are appearing daily in the press.

These include: the Fresh & Easy grocery stores sales underperformance, comments from fresh foods' industry suppliers and others that they are being cut out of the loop (and business) because Tesco imported three United Kingdom-based fresh foods companies to handle its business in the U.S. rather than using local companies, the press report we've reported on from the San Jose Mercury News about Tesco' selling of out-of-code and/or spoiled foods in a few UK stores (which happened some time ago), and a number of other issues.

By getting "out in front" of these issues, we don't just mean writing and sending press releases and statements (although that's not even being done strategically or often) to media outlets, or making comments when reporters call.

Rather, we mean developing and implementing a strategic plan--like Natural~Specialty Foods Memo outlined in its April 2, 2008 piece--and really addressing each one of these issues, which in some cases will mean admitting mistakes and changing policy. As we all know, strategy, policy and tactics aren't the same thing.

Personally, Fresh & Easy Buzz doesn't care if Tesco does this or not. We have no dog in it in any way shape or form; except that we cover, analyze and write about Tesco, Fresh & Easy and related grocery industry issues and developments here on the blog.

However, as close observers of Tesco and its Fresh & Easy Neighborhood Market USA retail grocery venture, and having many years experience in the industry and related areas, we can't have helped wondering what's been going on in many ways at the USA branch of one of the world's foremost retailers in the areas of operations, marketing, merchandising, public relations, and a couple other areas.

As a result, we offer analysis, research-based insight, the analysis and opinions of others, consumer comments (positive and negative), and our commentary tied-in to all of the above as we see fit.

That's all for now...but the story continues.

Our 'Fresh & Easy Stores' Lack A Sense of Place' Theory is Growing; Read What We and Others Are Saying Tesco Needs to Do With Fresh & Easy

We just finished reading a piece by Jim Prevor, sent to us from one of our readers. Mr. Prevor is a fresh foods industry consultant and writer who publishes a blog called the Perishable Pundit. He's been, like Fresh & Easy Buzz has, writing frequently about Tesco's small-format, convenience-oriented Fresh & Easy Neighborhood Market grocery store retailing venture in the Western USA.

We were pleased to read the following in Mr. Prevor's April 1 piece: "All these are good ideas [he has a list of seven suggestions for Fresh & Easy above this paragraph]. Our sense, however, is that there is a bigger problem [with the Fresh & Easy stores]. Many of the stores are ill-sited--they lack a sense of place--and it is unclear as to the kind of customer the stores are built for.

Some months ago, we first started writing about our empirical observation that one of the main problems with the Fresh & Easy small-format, combination basic grocery and fresh foods grocery markets, is that the stores lack a sense of place.

We sighted a body of sociological, anthropological and urban planning theory and empirical research called "Sense of Place Theory" as the basis of our assertion that the grocery store format--which has "neighborhood" in its name but not in its stores--lacks a sense of place, thus contributing to the fact people are shopping the grocery markets more like they do a conventional convenience store, rather than a neighborhood grocery store--which is how Tesco has positioned the stores--and how they must be shopped (primary and some secondary shoppers) in order to be successful.

We came upon this finding not only deductively by applying our knowledge and experience with "Sense of Place Theory" to the Fresh & Easy stores when observing and analyzing them in the field, but we also conducted what is called "action research," which is a social and behavioral science field research methodology.

[You can learn more about "action research" by getting the book, "A Practical Guide to Behavioral Research: Tools and Techniques," by Dr. Robert Sommer and his wife Dr. Barbara Sommer. Additionally, you can read a number of Dr. Robert Sommer's papers and articles here. Click here for Bob Sommer's complete list of publications.

Bob Sommer is a professor emeritus at the University of California, Davis, where he has been a Pychology professor--along with a consumer behavior researcher and pioneer--for 45 years. Dr. Sommer also is one of the founders of the field of Environmental Psychology, and was the founder and longtime director of the University's renowned Center for Consumer Research.]

Using the methods of behavior and observational "action research" (which you are now an expert in from reading Dr. Sommer's work linked above), we confirmed our hypothesis that the Fresh & Easy grocery stores are lacking a sense of place based on a number of objective criteria. [Action research is called that because it's not a mere theoretical exercise. Rather, as the term implies, it's a useful scientific research method to use in the real world (like a grocery store), the results of which can be used as data to make changes and improvements.]

Click here to read one of our more comprehensive pieces about the conclusions we reached, (and the suggestions we made in moving forward) about Tesco's Fresh & Easy grocery stores' lacking a sense of place, based on our research.

We're pleased Mr. Prevor independently arrived at the same conclusion we determined through our research, which is that a "big" problem with the Fresh & Easy stores is their serious lack of a sense of place.

[For more knowledge about "Sense of Place Theory" take a look here at what's called "Third Place" as well. Ray Oldenburg is one of the better writers on "Third Place" theory and practice. Coffee chain Starbucks has used "Sense of Place" and "Third Place" theory and practice extensively in it design, operations, marketing and merchandising strategy. Whole Foods Market, Inc. also has used elements of the concepts in its store design and merchadising practices.]

In his April 1 piece, Mr. Prevor also offers Tesco seven suggestions for moving forward with the Fresh & Easy format, operations and merchandising schemes.

His seven suggestions and a number of suggestions we've offered in the last few months are similar. (We've never met or compared notes.) And, he offers some good ideas we haven't mentioned, such as his concept that Tesco needs to stop running the chain like its a multi-thousand store operation rather than the start up it is. We also disagree on some key things of course.

For example, Mr. Prevor even offers a "final solution" of sorts in his piece, which is to break Fresh & Easy into two seperate chains--one a no-frills, discount grocery store format like Aldi, and the other a specialty grocery chain like Trader Joe's, which just happens to be owned by family members who also are the primary owners of German-based Aldi International.

We've thought about the same thing often. In fact, we warned of what we called a "format model muddle" problem with the Fresh & Easy grocery stores long before the the first unit opened. It's a real problem.

Statistitions and economists have a concept called BiModal Distribution. In very basic terms, it's a continuous probability distribution with two different and distinct (the Bi) modes. Up and down are bimodal modes, for example.

This concept has been applied to retailing, the results of which suggest in the case of grocery retailing. formats which have clear differentiation--Whole Foods as upscale, Aldi or Sav-A-Lot as no frills, discount grocers, for example--do the best. It's those in the middle, or without clear format differentiation, that fail the most.

Fresh & Easy does fall into this category in many ways (but not completely), so at some point we might determine that despite some significant format fixes, it might come time to scrap the current format outline altogether.

We aren't there yet. However, if Tesco doesn't make what we are calling significant format tweaks, we do believe the probability of the present format being successful with just marketing and merchandising changes alone is low.

In a nutshell, here are the basic (not all of them) suggestions we've offered to date on improving the Fresh & Easy format, operations, marketing and merchandising processes and practices, based on our field research, interviews with numerous vendors, consumers, store-level workers and others. You can find all of these suggestions in various pieces we've written in Fresh & Easy Buzz:

>Localism: There is a serious need to localize the stores' product mix (and to some degree the actual stores) to the neighborhoods in which they are located. This includes having a solid understand of and respect for the history, culture and demographics of each respective neighborhood a store is located in. From this knowledge flows product mix customization on top of the basic core mix that goes in every store. This customization process is category-wide.

Localism is actually a conceptual suggestion that covers many areas such as marketing, merchandising, format design tweaking and more. It's also a mind-set. It needs to permeate all that Fresh & Easy does in its retailing.

>Create a Sense of Place in the stores; or put the "neighborhood" in Fresh & Easy Neighborhood Market: This is explained a bit above. However, essentially the Fresh & Easy stores are too sterile and uninviting in our analysis to encourage customers to spend much time in them shopping and spending money, which is key to gaining primary shoppers. Doing so is vital for the chain's positioning as a "neighborhood" market, and essential for their financial success. As we mentioned above, there's what we call a "model muddle" within the Fresh & Easy format.

We've offered a number of suggestions for creating a better sense of place in the stores. Among the suggestions include: creating much more inviting bulk produce departments, creating a small, in-store "Fresh & Easy Cafe," in part modeled after Tesco's successful "Tesco Cafe" in the chain's UK stores, and adding design elements and unique features ("localism") to the stores which will reflect a given community and neighborhood's demographics, history and culture. This is done by numerous successful grocery chains. For a good example, note how Whole Foods Market, Inc. localizes it stores while still having an overall core design and merchandising mix. from a conceptualization standpoint, think "mass customization."

>Eliminate most of the packaged produce, with the exception of some specialty items, in favor of abundant, bulk produce displays. This is one of Mr. Prevor's suggestions as well. And of course it should be, he's an experienced produce man. So are we, among other things. And decades of that experience is in the Western USA market.

Americans, especially westerners, love their produce: lots of it and untouched in the main by bags, cellaphane and plastic containers. Sure, Trader Joe's sells produce in packages, and does pretty well with it, the argument will go. However, fresh produce is a mere sideline for Trader Joe's, compared to most supermarkets, large or samll-format.

For a grocer which is positioning its stores as a primary, neighborhood shopping venue like Tesco is with Fresh & Easy, produce can't be a sideline; it must be key. Fresh produce is one of the top-three reasons consumers choose a grocery store. And, at the top of their definition of "good produce" is fresh, bulk and lots of variety. Farmer's Markets have grown in the U.S. by 28% each year for the last 10 years. Does anybody wonder why? Let's see: fresh, abundant, wide variety, bulk, local produce....you get the point.

>Store Brand vs. National Brand: We've argued Fresh & Easy needs to change its current store brand vs. national brand product ratio (especially on basic grocery items) from it's current mix of about 65% store brand/35% national brand, to at a minimum 50% store brand/50% national brand mix. Even better, we've suggested, would be a 60% national grocery brand vs. 40% store brand mix.

We don't agree Fresh & Easy should eliminate most all of its store brand grocery items. We think the 60%-40% mix is good. If Tesco digs deep into it's corporate store brand marketing expertise it can do much with that 40%, which also (if marketed well) offers the Fresh & Easy chain a unique product offering to hang it's merchandising hat on. It's called differentiation. Again, it must be executed well. A little history: It took Trader Joe's many years to gain the popularity it has today for its various store brands. TJ's is doing store brand marketing far better than Fresh & Easy is though to date.

>Understanding and Executing a 'Western' USA Product Mix: We've argued the fact that in grocery retailing in the USA their are significant regional differences in brands and consumer product preferences. For example, Kraft Miracle Whip is one of the top two items in the condiment category in most of the Midwestern U.S. However, it ranks far-lower in California, for example.

What about Best Foods mayonnaise? That's what the category's number one selling brand is called west of the Rocky Mountains. East of the Rockies, the exact same product (also number one in the category) is called Hellman's. We've done studies: Western consumers claim Hellman's isn't near as good as Best Foods. They say they wouldn't buy it even if it was 40-50% cheaper. The east of the Rocky Mountain consumers say the same thing about Best Foods vs. Hellman's. There are numerous other, similar examples of the differences we mention.

There even are significant intra-region differences within the Western USA, for example. Even though there are more similarities than differences, the Southern California and Arizona markets have many brand and product preference differences. Even within California, there are many brand and product preference differences between Southern and Northern California.

The Fresh & Easy stores need a product mix review and analysis. This needs to be done by people who have experience in grocery retailing and merchandising in the respective markets: California, Arizona and Nevada. There currently are items in numerous categories--in some cases the number one and number two selling brands/skus--that aren't in the stores. Conversely, there are brands/skus that should be removed because they are poor sellers in the respective markets.

Picking a product assortment for a limited assortment format grocery store is far more difficult--and precise--than doing so for a standard-sized supermarket is. As we've suggested a number of times, Fresh & Easy needs to go back to the drawing board and review and optimize the product mix, across all categories, in the Fresh & Easy grocery markets.

>Fresh & Prepared Foods Out-of-Stock Problem: As we written often, Fresh & Easy continues to have out-of-stock problems in many of its stores in the fresh foods categories, especially fresh, prepared foods. This problem isn't due to massive sales unfortunately. It's a logistics problem. It's improved considerably over the last two months, but still exists.

We argue this is a problem that must be fixed "yesterday," or else it will define the Fresh & Easy stores in consumers' minds as "that store that's always out of what I want." The problem has already created this definition in the minds of numerous consumers we've talked to.

>Dump the Self-Scanning Checkout: American's don't like to scan and bag there own grocery purchases. It's been tried, going back to the 1980's, and has failed. Only a few, niche deep-discount grocers use it today, and its more a novelty than anything else. American consumers also don't buy the proposition that self-scanning leads to lower prices. Wal-Mart, Costco, bare-bones warehouse stores all have clerks who scan and bag customer orders. A chain would have to have really low prices to sell self-scanning to mainstream U.S. consumers; or even non- mainstream ones for that matter. Dump it and dump it fast, as we argued all the way back in December, 2007.

>A General lack of Consumer Awareness of Fresh & Easy Stores: To date, Tesco has relied almost exclusively on publicity generated via the media ("free media") to create awareness for the Fresh & Easy stores. Marketing PR if you will. This hasn't worked. Our analysis is that there's a low-level of consumer awareness (less in Nevada than Southern California and Arizona) in the neighborhoods where the stores are located. Therefore, we've suggested an integrated marketing campaign, using radio advertising as the campaign's "lead media horse." Tesco's "if we build it they will come" strategy hasn't worked thus far.

These six suggestions--and remember "localism" is a more conceptual, multi-purpose suggestion, as well as an attitude that in addition to the specific ideas we offered also must permeate all that the retailer does: format tweaks, operations, marketing, merchandising, customer service--form the basis of the suggestions for moving forward we've offered thus far over the last few months for Tesco's Fresh & Easy Neighborhood Market.

There are numerous points of agreement, and some significant differences as well, which are emerging from a group of grocery industry analysts and participants--who aren't in all cases talking to each other about the issues--about some of the ways Tesco needs to move forward in this now, new store opening "pause" period--and beyond--to help create a more successful outcome for the Fresh & Easy chain.

It's also clear most of these analysts aren't wishing Tesco failure with Fresh & Easy, as Tesco CFO Andrew Higginson suggested might be the case in this piece we ran yesterday.

As part of that "localism" which we humbly suggest should permeate all Tesco does with Fresh & Easy going forward, it might be a worth it to listen to what some of us experienced "locals" are saying. As we used to say in those old "action research" training sessions: 'There's no such thing as too little good data.'

A Retail Marketing and Public Relations Memo to Tesco's Fresh & Easy Neighborhood Market Management from Natural~Specialty Foods Memo

The food and grocery industry publication Natural~Specialty Foods Memo has a 'Retail Marketing and Public Relations Memo' to Tesco's Fresh & Easy Neighborhood Market senior management in today's issue.

The "memo," titled: "Retail Marketing and Public Relations Memo: What Tesco's Fresh & Easy Neighborhood Market Should Be Doing Now," talks about the current new store opening "pause" which we reported here on Saturday.

In the piece, the publication discusses the marketing, public relations and overall implications of the announcement as part of an total retail strategy. The piece also suggests Tesco's Fresh & Easy Neighborhood Market should have prepared for the mostly negative press reports which started coming out yesterday and today in numerous U.S. newspaper business sections, such as the Los Angeles Times, San Francisco Chronicle, Associated Press news service and others.

Natural~Specialty Foods Memo offers Fresh & Easy a strategic blueprint of how it could have prepared a strategic operations and media marketing strategy before posting the "pause" announcement in its corporate blog, including suggestions for how to not only deal with but also get on top of the news cycle. The piece also says any marketing and public relations strategy must be real and integrated with overall operations.

In fact, the marketing and public relations strategies would be good for Fresh & Easy anytime. But they are especially important now, as it appears to us the retailer wasn't prepared for the mostly negative media coverage it's getting over the new store opening moratorium, along with the reports from analysts like us and others about the small-format, convenience-oriented grocery stores' sales underperformance to date, which these newspaper business section reporters and editors are including in their stories.

Lastly, the piece says "it's not too late" for Tesco to employ these strategies, if "Fresh & Easy senior management can be a fast-moving and nimble team."

Read the 'Retail Marketing and Public Relations Memo' to Tesco's Fresh & Easy Neighborhood Market from Natural~Specialty Foods Memo here.