OPINION: Firms always fail to turn back the tide of progress

King Canute was a man who knew his limitations. Legend says that he had his throne set on the seashore to prove to his sycophantic followers that even he couldn’t command the waves to stop advancing any further.

King Canute was a man who knew his limitations. Legend says that he

had his throne set on the seashore to prove to his sycophantic followers

that even he couldn’t command the waves to stop advancing any

further.



So it goes with the tide of marketing progress. No matter how much

competitors stand and rail at the relentless onset of successful

competitive ideas that can change the rules, they are shouting into the

wind.



It’s pretty easy to tell when companies are beginning to squirm against

the inevitable. Take Tesco. Tesco has been applauded for doing a lot of

things right. But it appears to be somewhat rattled by the combination

of the continuing investigation by the Competition Commission into

supermarket food pricing and the potential impact on that pricing of the

arrival of Wal-Mart in the UK marketplace through its takeover of

Asda.



The first sign came with the publication a week or so back of a survey

carried out for Tesco by market research group ACNielsen MEAL. It

compared a typical basket of 131 items from the UK retailer with leading

chains in France, Germany, Italy, the Netherlands and Belgium.



The results probably won’t come as a surprise. Tesco proudly claims that

the study shows that its prices on essential food items are 8% lower

than the European average. Some products were up to 20% cheaper. Well,

they would say that, wouldn’t they.



The second sign that Tesco is feeling ever so slightly on the defensive

came with reported comments from Tesco chief executive Terry Leahy in

The Sunday Times in an article on the forthcoming Wal-Mart

juggernaut.



All this attendant publicity about just what impact Wal-Mart could have

on the UK retailing scene was all very well, he argued, but there was a

need to look at the ’bigger picture’, and not just focus on the domestic

market. ’We don’t want to wake up one day to find that one of the few

world-class British industries has fallen into foreign hands. You have

to ask who would really benefit from that.’



But that was a mistake: the playing of the national card can easily

backfire.



After all, disgruntled consumers can reply, if we get a more competitive

deal and even better service from a foreign-owned company, what

difference does ownership make?



Another retailer that could learn a thing or two from King Canute is

Waitrose, the rather lofty food retailer in the John Lewis group. Its

marketing director, Mark Price, was reported to have described Boots the

Chemist as using ’Big Brother marketing tactics’ after it announced

plans to spend pounds 14m putting interactive terminals in 350 stores

offering customised promotions and discounts for the ten million holders

of its Advantage card.



He accused Boots of building up a ’sinister’ database, which raises big

issues about intrusion. Even worse, he declared , were the huge costs

involved, which someone had to pay for: ’Boots is certainly not being

philanthropic, and it is not straightforward, honest retailing.’



This is very strong stuff from a normally very reticent retailer - and

one not in direct conflict with Boots anyway - and speaks of all sorts

of hidden agendas. After all, information collection is now practically

a given. Waitrose itself has installed a self-checkout system in a

number of its stores based on its own cards, which means it can also

monitor information on shopping patterns.



In fact, what this vitriolic attack does seem to indicate is that

Waitrose, long resting on the laurels of being associated with the John

Lewis brand, no longer feels as aloof from the cold winds of competition

as it once did. But hitting out like a querulous child isn’t going to

make it any better.



It’s indeed tough and it’s disconcerting when the traditional

certainties of business disappear. But trying to turn back the tide is

pointless - and there’s a good chance you’ll drown in the process.



Discussion

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