Boots Bank: Will Santander be interested?
Recently, news surfaced that Boots plans to add a personal banking service to increase customers.Reason: Because Tesco is doing it.
How is that going, may I ask?
Tesco’s grip on the British public is so strong and widespread because prices are low (or competitive) enough and footfall is sufficient to sustain its other services.
True to the supermarket giant’s brand proposition, “Every Little Helps”, customers can save time and earn points using their mobile, insurance and banking services. Whilst they may not be the cheapest in town, they certainly are one of the most fuss-free. Everything done under one roof, from groceries to wine to topping up your phone. Heck, your pets will be safe and you get points for that too!
(image Copyright © Mike Smith 2003)
Now let’s go back to Boots.
Boots is a high-street chemist, healthcare and beauty products retailer. It was also where you could buy stamps, the Pill as well as grab lunch and drop off your film to be processed. When it dropped “the chemist”, the company showed that it wasn’t just enough.
One can only imagine what on earth they’re thinking trying to copy Tesco.
Putting on my strategist’s hat, I can imagine that the board was seeing their share price slip and sales stagnant and they’re thinking “How does the big 4 do it?” (the Big 4 being the 4 supermarkets that dominate in the UK; Sainsbury’s, Tesco, Asda and the other one – actually, it could’ve been the big 3 and I’m getting that mixed up with the 4 aces of advertising). So they go:
“Right, who do we admire most?”
“What do they have that we don’t have?”
So the entire board visualises the shopfloor and start form the entrance.
“They have cigarettes and lotterty”.
Gets a backhand.
“They have shampoo!”
“We have shampoo”
“They have drugs!”
“We have drugs”
“They have food”
“We have food”
“They have drinks”
“We have drinks”
“They have cheap booze”
“They have insurance and banking services!”
I can only see failure in this and urge Boots to not go down this route and try to be another Tesco, but rather, be the Tesco of chemists, healthcare and beauty.
Tesco is to value (not groceries) what Boots is to healthcare and beauty. I say it’d be better for Boots stick to what they know best and invest in reinforcing that image.