Customers are poor predictors of their own behaviour. Just ask Tesco. It spent a year talking to potential consumers on the US’s west coast, trying to understand their needs and motivations, before launching its Fresh & Easy store concept a couple of years ago.
Yet the stores are not performing as well as expected. Tim Mason, Tesco’s US chief, “has said its early market research was mistaken and it may make big changes to the stores,” told The Sunday Times.
No matter how much research a company does, managers who bring a
new business to market hold their breath as if they were NASA scientists watching a rocket launch. I know from my own experience that research and even early success is a poor predictor of longer-term performance.
Back in 2003, when I was working for Boots, I led a team that researched a new-style, city centre store. We piloted the new concept in London and our store immediately saw a double-digit growth in sales.
Believing we had found the answer I moved the project team on and a new team took over the work. The problem, however, was that much of our success was due to random factors rather than our own brilliance, and future stores failed to justify their investment. Less than a year later the programme was stopped.
My painful lesson from this experience was that creating an innovative product or business is, above all, an iterative process. It requires trial and error, constant review and refinement, as well as a willingness to remain open-minded about the solution. Customer research can only point you in a certain direction — it cannot give you the answer.
Innovation is not the job for a strategist but for those focused on action and learning. It is a hands-on, sleeves rolled-up, dirty business and not a theoretical exercise.
As any innovator will tell you, it is likely to be the 100th trial that gives you the answer — t is very unlikely to be the first. This means that you must start small, learn quickly and go from there.
The irony for Tesco is that it should know this, having taken several years to develop the Express line of stores.
Unfortunately for Tesco there are already over 100 Fresh & Easy stores on the ground in the US. Changing the offer significantly is now likely to be expensive, slow and very dirty.
