Tesco’s Digital Marketing Strategies and Benefits

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Introduction

The proliferation of the Internet and e-commerce has largely changed the marketing environment in which modern businesses operate. Digital marketing is currently a top priority for companies’ product promotion efforts. Compared to traditional channels, digital platforms and tools offer the opportunity to better engage with customers and reach a wider audience. In a competitive environment, these aspects are sluggish for the most effective business.

It is also important that modern digital marketing allows companies to use a variety of data analytics tools. In particular, it has become much easier to define and analyze customer behavior patterns, which allows you to target audiences and offer relevant products and services effectively. Finally, digital marketing offers more accurate metrics for measuring campaign performance over traditional channels, which is an additional benefit.

This report focuses on describing a potential digital marketing strategy for Tesco. Tesco is a multinational groceries retailer that currently focuses on developing omnichannel marketing efforts. For this brand, an effective digital strategy is most relevant as Tesco offers its customers grocery delivery. Developing a company’s presence in a digital environment will enable a smoother customer experience and the integration of digital and physical channels of interaction. This report provides an overview of the basic concepts and tools of modern digital marketing, as well as its comparison with traditional approaches. Based on these, a digital marketing campaign strategy for Tesco is further proposed that could be an effective omnichannel approach.

An Overview of Digital and Traditional Marketing

The widespread use of the Internet as the main channel of communication has significantly changed the business landscape. The explosive growth in online sales, especially with the use of mobile devices, has identified the need for companies to build digital relationships with customers (Kannan and Li, 2017). The development of technologies such as the Internet of Things (IoT), artificial intelligence, big data, and mobile devices are transforming the marketing environment in the modern economy. The most important aspect is that digital marketing can effectively shape and define purchase intentions (Dunakhe and Panse, 2021). Thus, in a short time, the concept of traditional marketing may disappear, as any efforts will include digital features.

Digital marketing refers to all communication activities between an organization and consumers using digital channels and technologies. Kannan and Li (2017, p. 24) define digital marketing as “an adaptive, technology-enabled process by which firms collaborate with customers and partners to jointly create, communicate, deliver, and sustain value for all stakeholders.” Thus, digital marketing includes not only direct advertising using digital media resources but also interactions through digital channels.

Most importantly, new types of marketing are creating new experiences for customers. This aspect significantly increases the value of the product or service that the company offers. Currently, the development of digital technologies and their impact on the economy is growing rapidly. More than 20% of offline consumers go online every year, and younger technology-oriented people become active buyers of goods (Kannan and Li, 2017, p. 24). Thus, digital marketing is a necessity for a modern business, as it allows it to function within a changing economy.

The concepts utilized in traditional and digital marketing are different, which requires special attention when developing a strategy. Primarily, traditional marketing appeals to the 4P’s, including price, product, promotion, and place (Singh and Deshmukh, 2021). These concepts are applicable in digital marketing as well, for example, through advertising. In the modern digital space, in comparison with traditional marketing, there has been a change in the channels for promoting goods, but the principles have remained the same. It is still important for companies to promote their product to an audience, just as with traditional marketing.

However, there has been a significant shift in the company’s accessibility for communication and customer relationships. This leads to the expansion of the scope of the audience in digital marketing due to the emergence of many new channels (Singh and Deshmukh, 2021). Compared to traditional marketing, the determining factor of digital marketing is the platform or resource rather than a specific group, which increases the audience of the product or service.

Consumer behavior has now become the main concept within digital marketing that defines marketing activities. Saura and Palos-Sanchez (2020, p. 2) note that companies primarily use “optimization, search engine marketing, social media marketing, programmatic advertising, and influencer marketing, among others.” Moreover, organizations are increasingly using algorithms to analyze consumer perceptions and attitudes towards products and services to shape strategy (Saura and Palos-Sanchez, 2020). Most importantly, through the collection of such information, companies can influence purchasing behavior.

Kannan and Li (2017) note that in comparison with traditional marketing within the digital space, the stages of product evaluation and consideration are reduced or excluded. In this way, companies can provide the necessary information to target users in order to maximize the likelihood of purchasing a product and building brand loyalty.

Social media within the digital space is also gaining a growing influence in the promotion of goods and services. The most important difference between traditional marketing and digital marketing is the ease with which word-of-mouth information is disseminated (Kannan and Li, 2017). Users can share reviews and recommendations with a wide audience, which allows user-generated content to act as a promotion tool.

In this case, interaction within the framework of social media is the crane beneficial and priority for companies. Thus, Social Media Marketing (SMM) is the most significant area of ​​marketing efforts in modern conditions and involves driving traffic to business resources through social media (Bala and Verma, 2018).

The main advantage of modern digital platforms is high potential efficiency at low costs. SMM efforts should be the backbone of digital marketing efforts for a successful marketing strategy. Kannan and Li (2017) emphasize that word-of-mouth spreads faster and wider in a digital environment than in traditional marketing, which makes it more effective. However, like any promotion activity, this aspect should be modeled and directed within the framework of marketing efforts.

Another important component of digital marketing that distinguishes it from traditional marketing is search engines. They allow customers to receive free information about products and services, as well as companies and brands. Researchers note that promotion through search engines helps companies acquire customers with a higher lifetime value than using offline or other online channels (Kannan and Li, 2017).

Additionally, paid advertising in search engines is more effective than traditional offline methods and has a longer-lasting impact (Kannan and Li, 2017). The marketing efforts involving search engines include two main areas: Search Engine Optimization (SEO) and Search Engine Marketing (SEM) (Bala and Verma, 2018). SEO implies getting the most efficiency from the site’s position in the list of search engines results. In this regard, it is necessary to work on improving “content and query matching, spidering, indexing, and interpreting non-text content” (Bala and Verma, 2018, p. 329). SEM is a more complex strategy and refers to paid promotion, which can have a different structure (Bala and Verma, 2018). To achieve the best results, you should competently combine these approaches to maximize traffic from search engines.

Digital marketing has the most important aspects, one of which is content. Content is the main tool for attracting traffic for SEO (Hanlon, 2019). Content within the digital environment content is a valuable resource, which implies the need to develop a content strategy. Weerasinghe (2018) clarifies that content marketing has a significant positive impact on online customer engagement, which in turn will potentially bring tangible benefits to the company.

The principles of building online communities or networks are the foundation for successful content marketing (Hanlon, 2019). Compared to offline or traditional communities, such groups are less structured and less transparent, and members can easily get in and out of them, which makes them flexible. Participation in such online communities allows companies to promote the brand and its products, which also increases sales while reducing customer uncertainty (Hanlon, 2019). Thus, organizations in a digital environment need to pay particular attention to the creation and management of online communities, as well as content marketing.

Modern economic conditions present new marketing challenges for businesses in promoting products and services. The factors that contribute to digital marketing growth primarily include the spread of the Internet and e-commerce (Jain and Yadav, 2017). In particular, for many companies, there is an opportunity for hybrid use of online and offline promotion channels, that is, a combination of digital and traditional marketing approaches (Zhang and Pauwels, 2019).

However, in this case, digital platforms act not as an auxiliary but as the main tool for accessing a product or service. Thus, in a modern economy, digital marketing performs a primary function in comparison with traditional marketing.

As well as the benefits and opportunities that digital marketing offers, there are challenges the company can face while switching from traditional practices. The main difficulty in the transition to digital marketing is the need to hire specialists (Gupta, 2020).

It is important to consider both the creative and the technical skills of the candidates, which can present a barrier to talent acquisition. In this regard, there is also the problem of constant rapid changes in the digital environment. Digital marketers need to constantly monitor industry trends, which requires additional resources and engagement. A significant technical challenge is the danger of cyber attacks and, as a consequence, potential security vulnerabilities (Gupta, 2020). In this case, the company needs not only to hire professionals in this field but also to develop appropriate protocols and purchase equipment. To maintain the confidentiality of information, the company also needs to take care of the software.

As the company moves from traditional to digital marketing, one should also not overlook the increasing competition. Nowadays, business is actively developing in the digital environment, which makes successful functioning in it rather difficult, despite the abundance of opportunities. The sheer volume of content, products, and services that are currently presented on the Internet makes it challenging for many companies to emphasize brand uniqueness (Anbumani, 2017). Another difficulty related to the described problem is the need to determine the target audience and attract relevant traffic (Anbumani, 2017). These aspects can be the biggest obstacles to a successful start-up digital marketing campaign. To overcome these challenges, the company needs to conduct a thorough analysis in accordance with the set goals.

In today’s digital environment, there are a variety of marketing tools that are effectively used and combined to achieve the best results. As part of the SEO direction, special attention should be paid to the analysis of customer search and keywords. These tools help companies get the most out of organic search in search engines. Platforms such as Google Trends enable companies to monitor current audience interest effectively and respond to customers’ inquiries.

SEMrush platform enables an organization to effectively measure the value of keywords to maximize the accuracy of a site’s search. Another useful tool is rank checking, which allows organizations to monitor the effectiveness of SEO efforts. Platforms such as Google Search Console can provide useful information on the website search appearance to correct potential problems. These tools and platforms refer to methods of free website promotion. In addition to these approaches, attention to content management is also necessary.

Within the SEM areas of promotion, the greatest attention should be paid to analytical tools. This approach involves a large investment compared to SEO, as well as increased risks. Google AdWords is a useful platform for analyzing the performance of paid advertising, in particular on social media. Google Analytics and social media platform dashboards can provide valuable insights into marketing campaign performance and key metrics.

In today’s digital environment, special attention should be paid to interaction with consumers in social media, as well as collaboration with influencers. Platforms as Facebook, Instagram, Twitter, and others can be the most valuable resources for publishing content and gathering audience information. Analytics in this regard is key, as it allows you to transform your strategy and marketing campaign depending on performance. However, for the effective use of these tools, specialized software is needed, which is selected in accordance with the goals set. Using social media is the most affordable option and is extremely useful in the early stages of the digital marketing transition. As SEO, this approach requires attention to content management, which is the basis for a successful promotion campaign.

Compared to physical promotion channels such as traditional advertising methods, digital channels offer more flexibility. First of all, the company can choose the platform that meets the objectives and also attracts the target audience. The most significant advantage of digital channels is the granular analytics and data collection required to transform strategy. In the case of physical channels, it is impossible to get comprehensive information about the results of a marketing campaign. Finally, digital channels allow campaigns to experiment with marketing approaches and reach new audiences with less risk.

The digital marketing landscape consists of technological innovations that modern society uses to buy and sell goods and services. The greatest influence on its formation is exerted by the spread of the Internet, mobile devices, and social media (Puthussery, 2020).

As part of the new marketing landscape, organizations and consumers are empowered to communicate in two ways, which impacts relationship building and the way companies do business. E-commerce now occupies an increasingly significant position and defines customer behavior (Goyal and Sergi, 2017). More and more purchases are made over the Internet, which requires companies to develop new infrastructures and integrate digital promotion methods. The transition to digital marketing in the current environment is rather a prerequisite for maintaining a competitive advantage.

The concept of omnichannel is dominant in the modern economic environment and especially significant for the retail sector. Mosquera and Pascual (2017, p. 167) note that “the omnichannel concept is perhaps one of the most important revolutions in business strategy in recent years.” The spread of technology in the economic environment has provided customers with more opportunities to interact with companies.

In particular, new retailing formats were introduced that consumers can use as part of their experience. Within the framework of omnichannel marketing, companies strive to communicate with customers and provide goods and services using two or more channels at the same time (Payne and Barger, 2017). It is noteworthy that these channels can be both physical and digital, complementing each other. The main advantage of omnichannel marketing over unique-channel marketing is better customer loyalty to the brand, as well as higher lifetime values (Payne and Barger, 2017). Thus, when working with omnichannel marketing, the main task is to achieve the integration of the channels used.

Initially, the concept of omnichannel marketing developed as a theoretical model. This idea focused on the need to create “a holistic shopping experience, one in which a customer’s buying journey is smooth and seamless, irrespective of the channels used” (Payne and Barger, 2017, p. 5). Most importantly, in omnichannel engagement, the brand is central, not the channel (Hendriyani and Chan, 2018).

In contrast to multi-channel marketing, omnichannel marketing emphasizes not only the use of multiple channels but also their unity. In this case, the channels are managed together and constitute a single customer experience, which additionally presents a challenge. A company needs to select and integrate channels so that customers can use them smoothly without experiencing the difference in interaction. This approach is extremely important for creating brand awareness and developing an effective marketing strategy in the digital environment, especially with a focus on e-commerce.

Digital Marketing Plan

A digital marketing strategy is based on innovation and optimization of existing product promotion channels. For Tesco, in developing omnichannel marketing initiatives, it is important to focus on personalizing customer experience in order to maintain a competitive advantage. As part of the proposed digital marketing strategy for the company, the first step is to identify the channels. Tesco should focus on social media, website, and mobile app. Currently, the company is actively developing a mobile version of the site, but this direction is not relevant enough in modern conditions. The mobile application provides more options for interacting with customers and maintaining loyalty.

The development of social media and active SEO and SEM efforts will allow the company not only to promote products effectively but also to research purchasing behavior. Social media offers the greatest potential in this regard, as it additionally provides access to feedback. Such information will allow the company to develop new products that can become the focus of promotional activities. It is also important that communication through social media increases brand awareness and customer loyalty. As part of interaction on social media, you can also use ad integrations with various influencers. This approach will allow the company to expand its audience and attract new customers.

The main point of the strategy is the mobile application, which is integrated with other marketing channels. In this case, it is critically important for Tesco not only to provide influencers with the possibility of e-commerce via a mobile application in addition to the website but also to develop a loyalty program. The use of the mobile application should be as convenient as the navigation on the site and contain the same functions. This will ensure a complete customer experience across all platforms. Given the fact that more and more people are now using mobile devices, this approach is most significant. The mobile application can also be integrated with social media, providing, for example, access to various company news feeds or product reviews on any platform.

As for the company’s website, special attention should be paid to optimizing the user experience (UX). Tesco should consider current trends in interface design to appeal to a younger and more technologically advanced audience. This effort should apply to all channels that the company uses. The improved website design will allow the company not only to look more modern but also to use social media more organically. In the situation of Tesco SEM, the promotion does not seem to be potentially effective since it involves significant costs with high risks. A company should focus on SEO, paying particular attention to keywords to optimize site search results.

The proposed omnichannel marketing strategy will enable Tesco to increase customer engagement through better brand communication. The mobile app and loyalty program will potentially increase customer loyalty, and the use of social media will allow for better monitoring of customer behavior. Optimizing a company’s website will contribute to better brand awareness and create a unique appearance while maintaining the company’s competitive advantage. The proposed strategy also potentially has a positive impact on the company’s ROI, as it will help to achieve higher customer lifetime value, which is important for e-commerce. Additionally, the integration of various promotional channels will allow Tesco to reach a large audience, potentially leading to increased customers and profits.

The company may also use the website and social media traffic analytics to create personalized customer experiences and unique products and services. Currently, there are many tools for tracking customer behavior that helps in analyzing and predicting customer preferences. The integration of more digital channels will allow Tesco to collect as much information as possible and analyze it to create a customized experience. It is also important that the targeting algorithms available in social media and search engines will allow the company to offer the necessary products to the target audience.

To improve the effectiveness of Tesco’s digital marketing campaign, it is necessary to implement analytic tools as performance metrics. First of all, you need to pay attention to the brand search lift. This indicator will help the company track changes in brand awareness and adjust its marketing strategy. It is important that the use of this metric is quite simple and requires only monitoring the number of requests about a company in search engines. The position in the search results also reflects how competently the company performs SEO and forms the keywords for the search. The most significant economic performance metrics include the average order value.

This metric will help the company track the value of the products it offers to customers. Saura (2020) notes that choosing the most relevant metrics allows companies to spend less time and effort optimizing customer databases. In this situation, it is important for Tesco to implement big data technologies that can track and analyze customer behavior patterns. In this regard, it is also important to pay attention to the development of technologies to protect data privacy.

Conclusion and Recommendations

Digital marketing is the main focus of today’s marketers’ efforts, driven by the current economic and technological environment. A particular focus of companies should be on developing an omnichannel approach to interacting with the audience. This is especially important for companies as Tesco, as it allows not only to provide a smooth customer experience regardless of the platform but also to effectively leverage traditional and digital aspects within the framework of e-commerce.

For a more effective implementation of the proposed strategy for the company, it is recommended to perform a thorough preliminary analysis of the existing audience. This will identify specific social media platforms that can be used for communication as well as potential audience expansion. It is also important to establish the goals that the company pursues on which the final selection of relevant performance metrics will depend.

In general, as noted, the focus of marketing efforts should be on the mobile application and the development of a loyalty program, which should be integrated across all channels. Additionally, it is important to ensure smooth communication between customers and the company on all platforms, which will ensure the best loyalty.

Reference List

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