Tesco's Fresh and Easy grocery stores have been in the US for about 15 months. They are not performing as expected, and the finger pointing has started.
One object of suspicion is the early research. Originally, this work was thought exemplary because it was ethnographic. Tesco Marketing director Simon Unwins recalls,
We went into people’s houses, talked to them about food and food shopping. We went into their kitchens and poked round pantries.
And indeed Tesco invested more than the usual time and money.
The company has spent years gathering detailed information on every aspect of American life. Most retailers would think they had done their homework after the usual focus groups and surveys, but Tesco went much further. Researchers, including a small cohort of top executives, spent two weeks living with 60 American families. They poked around in their kitchen cupboards, watched them cook and followed them as they shopped. (The Economist)
But did Tesco grasp the method they were using? There is a distressing habit these days to think the ethnographic due diligence has been satisfied if interview are done in-home and in-store. In point of fact, an interview not in-home is not ethnographic. Unless certain methodological conditions are satisfied, it is merely an interview done in-home.
Ethnography is good at the following things.
1. it is good at picking up the telling detail. And yes, you want to be in someone's home to do this. Or at point of purchase. Or where the product gets consumed. IDEO is good at this sort of thing.
2. it is good an embracing point of view, so that we see all the details at once. This is the "holistic" approach for which anthropological is in the social sciences famous. As we shall, see it looks at if Tesco failed on this point
3. it is good at seeing the topic from several (and collective) points of view, the client's, the consumer's, the various members of the household, family, neighborhood, city, etc. This is the cultural point of view. And it looks as if Tesco entirely missed this entirely.
4. it is good at dollying back from fine details to an ever larger picture so that we see the product, or innovation, or opportunity in successively broaders contexts. This is the strength of the big management consulting houses like McKinsey. What they lack in ethnographic nuance and cultural understanding, they make up in the construction of a powerful strategic picture.
The irony: when we define ethnography as interviews done in-home, almost all of this potential value is lost.
Back to Tesco. It looks as if Tesco may have satisfied the Condition 1. But it looks now that even by a literal understanding of ethnography, it was too narrow. As the Sunday Times puts it,
Mason now admits, they did not poke around their garages, where they would have found huge freezer chests bulging with stockpiled meat bought on special offer.
Conditions 2 and 3 were failed as well, apparently. The anonymous observer on the blog Fresh and Easy Buzz suggests that with noses pressed up against the kitchen window, Tesco researchers missed:
basic aspects and practices of how food and grocery retailing in America works.
These research failures include such simple basics as how Americans prefer fresh, bulk produce over pre-packaged, to … the regional, sub-regional, sub-sub regional and local nature of grocery retailing in the U.S. — that there are regional markets like the Western U.S., then sub-regional markets within those which have extensive differences, like California, Nevada and Arizona, then additional sub-sub regional markets within those, such as Southern, Central and Northern California, and then even local markets within those sub-sub regional ones, right on down to the neighborhood level. There are niches within the niches.
In a more perfect world, ethnography moves from the small detail to an embracing view. Here's how Lafley and Charan put it in The Game-Changer.
P&G needed to look at consumer more broadly. It tended to narrow in on only one aspect of the consumer–for example, their mouth for oral-care products, their hair for shampoo, their loads of dirty clothes and their washing machines for laundry detergents.
P&G had essentially extracted the consumer out of her own life (and, at times, a particular body part as well!) and myopically focused on what was most important to the company–the product or the technology. P&G has since learned to understand and appreciate her and her life–how busy she is; her job responsibilities; the role she plays for her children, husband, and other family members; and her personal and family aspirations and dreams.
This broader view promised an advantage.
[It] has enabled the identifications of innovation opportunity that truly provide meaningful solutions to her household and personal-care needs and wants that otherwise wouldn't have been discovered through more-traditional, more-narrow, and often more-superficial methods. (p. 36)
In an entirely perfect world, the ethnographer understands the consumer with Lafley-esque nuance. He or she gets the cultural context, the life context, the aspirational context down to the ground. But the ethnographer also gets what we might call the McKinsey-esgue context, the one that comes from a deep mastery of the structure of the market, the industry, the competitors, and the competitive state of play right up to the heavens.
At it's best, ethnography supplies the biggest picture. The trick is how to do those interviews in home but still generalize to the larger cutural, competitive and strategic factors that make it make sense. From a parochial point of view, I like to think of this as putting the anthropology back in the ethnography. But if I too am obliged to take the larger view, it's also a matter of putting the IDEO, the Lafley, and the McKinsey back in ethnography.
The risks are fantastically high. As the Tesco CEO put it two years ago:
“Clearly it’s high risk,” agrees Sir Terry. “But we’ve carefully balanced the risk. If it fails it’s embarrassing. It might show up in my career [and] it’ll cost an amount of money that’s easily affordable by Tesco—call it £1 billion if you like. If it succeeds then it’s transformational.” (The Economist)
But it is not just careers that hang in the balance. If we continue to diminish what ethnography is, the very method is in peril.
Anonymous. 2009. Fresh & Easy Buzz: A Healthy 'Mea Culpa': Tesco Fresh & Easy CEO Tim Mason Says 'We Got it Wrong;' Comments Tend to Agree With Fresh & Easy Buzz Analysis and Arguments. Fresh and Easy Buzz http://freshneasybuzz.blogspot.com/2009/02/healthy-mea-culpa-tesco-fresh-easy.html
Anonymous. 2007. Fresh, far from easy. The Economist. June 21, 2007.
Kay, William. 2009. Tesco admits: We got it wrong in US. The Sunday Times.
February 22, 2009.
Lafley, A.G. and Ram Charan. 2008. The Game-changer. New York: Crown.
Thanks to Paul Snyderman for pointing me in the right direction.