Rules of the game and learning from the failure of Jack’s.
Remember Sainsbury’s failed rollout of Netto in 2014? Tesco tried something similar with the launch of Jack’s in 2018 (directly taking on Aldi/Lidl), to much fanfare, but has today (1st Feb) announced that all stores will close.
Quelle surprise? Not really.
Extending beyond your core, in a sub-category with well understood, laser focused competitors is a dangerous undertaking for any brand.All new ventures enjoy a bit of trial/curiosity in the early days but consumers quickly form their opinion.
What jobs did Jack’s solve for, and what were its areas of superiority vs the competition?
I’m sure early-stage Jack’s research (behavioural, diaries, IDIs) would have shown more work was needed, or if it didn’t, it should have. Either way, clearly consumers couldn’t work it out.
Was Tesco brave and clear enough with Jack’s proposition? Yes it was different to their core, but meaningfully different? Did they get the commercials / pricing / economics right?
In the hyper competitive world of discounter retail, probably not. I suspect complacency and a ‘build it and they will come’ mindset persisted.
Tesco (Jack’s) needs to be more than just in the game to take market share. Yes the trend is a flight to discounters, but Aldi and Lidl have clear propositions and loyalty. It seems Tesco didn’t understand the rules of the game (as defined by consumers), or maybe they did, but were unwilling to change.
Pricing, range and quality in the right places is the name of game here. Great innovation is about being nimble and agile: test, learn, re-imagine etc. and humbly assuming you can always sharpen things.
The fate of Jack’s serves as a harsh reminder that as we progress through 2022, consumers are increasingly savvy, and brands or businesses that are unable to deliver against clear jobs to be done will get punished.
I don’t know the extent of the research that Jack’s did in the 3 years it was around, but I hope big lessons around what it takes to win in 2022 have been learnt by Tesco.