Tesco's Rob Salter, Category Director for Media & Entertainment at Tesco, gave a very interesting presentation yesterday evening (23 Nov) on helping to build Tesco's £800m Entertainment business up from an £18m fledgling in 1995. He highlighted the importance of Entertainment as a high frequency category, one where the company can create a close relationship with the customer, thus attracting them in-store and encouraging spending in other parts of the business.
He discussed his strategy for keeping up with industry trends, namely the move from physical merchandise in-store, to online purchasing, to digitalisation. He explained Tesco recent acquisition of Blinkbox (http://www.blinkbox.com/), similar to Amazon's LoveFilm, and shared a number of initiatives to create a unique offer in the digital space.
Rob provided interesting statistics around Entertainment purchases. He explained how most people buy something they have already seen or heard, pointing out that Tesco's highest selling DVD is the 'Only Fools and Horses' boxset. A recent survey showed that 17% of DVD purchases remain in their shrink wrap a year later, showing that people are often buying a copy of something they've seen before that they want for their collection.
Rob said that, contrary to popular belief, 70% of music is still bought on CD. He gave an interesting example of how Tesco have implemented initiatives to help keep physical copies relevant. For instance, they ran a Valentine's Day promotion with a Simply Red album that entitled the purchaser to get priority on tickets for the band's upcoming concert.
As well as some excellent ideas around driving Tesco Entertainment, we discussed the need to improve the customer experience on the broader site. Currently customers buying grocery, clothing and books, for example, would have to make three separate online transactions. With the likes of HMV struggling in the high street, if Tesco can improve its customer experience online there's no reason it couldn't build its Entertainment brand to rival the online giants like Amazon and Apple.