Tesco Essay Example for Free

Tesco EssayThe Tesco. com point acts as a portal to most of Tescos products, including various non-food ranges (for example, Books, DVDs and Electrical items under the Extra banner), Tesco Personal Finance and the telecoms businesses, as easy as serve offered in league with specialist companies, such as dieting clubs, flights and holidays, music downloads, gas, electricity and DVD rentals. Tesco Competitors Tesco currently leads the UKs other lead-in grocery retailers in terms of market share. This pattern is repeated online. The compilation below is from Hitwise (2005) and the figures in brackets show market share for traditional offline retail formats from the Taylor Nelson Softres A-one panel (see superpanel. tns-global. com) 1. Tesco superstore 27. 28% (29% of retail trade) 2. Asda (13. 36%) 3. Asda t home 10. 13% (17. 1%) 4. Sainsburys (8. 42%) 5. Tesco wine warehouse, 8. 19% 6. Sainsburys to you 5. 86% (15. 9%) 7. Waitrose. com 3. 42% (3. 6%) 8. Ocado 3. 32% (owned by Waitrose, 3. 6%) 9. Lidl 2. 49% (1. 8%) 10. Aldi-UK 2. 10% (2. 3%) virtually companies are repeated since both their main site and the online shopping site are reported on separately.Asda. com now seems to be performing in a consistent manner online to its offline presence. However, Sainsburys online performance seems to be significantly lower compared to its offline performance. Some set asiders such as Ocado which originally just operated within the London area hand over a strong local performance. Notably, some of Tesco. com competitors are absent from the Hitwise listing since their strategy has been to focus on retail formats. These are Morrisons (12. 5% retail share, Somerfield (5. 5%) and Co-op (5. 0%). Promotion of service As with other online retailers, Tesco. om relies on in-store advertising and marketing to the supermarkets Clubcard loyalty schemes customer base to persuade customers to shop online. NMA (2005) quotes Nigel Dodd, marketing director at Tesco. com as s aying These are invaluable sources as we have such a strong customer base. However, for non-food experts the supermarket does advertise online using keyword targeted ads.For existing customers, email marketing and direct mail marketing to provide special offers and promotions to customers is important. According to Humby (2003), e-retailer Tesco. om use what he describes as a commitment-based segmentation or loyalty ladder which is based on recency of corrupt, frequency of buy and value which is used to identify 6 lifecycle categories which are then further divided to target communications Logged-onCautionaryDevelopingEstablishedDedicatedLogged-off (the bearing here is to winback) Tesco then use automated event-triggered messaging can be created to encourage continued purchase. For example, Tesco. com has a touch strategy which includes a sequence of put through communications triggered later on different events in the customer lifecycle.In the example given below, communicati ons after event 1 are intended to reach out the objective of converting a web site visitor to action communications after event 2 are intended to move the customer from a front clip purchaser to a regular purchaser and for event 3 to reactivate lapsed purchasers. * turn on event 1 Customer start-off registers on site (but does not buy). Auto-response (AR) 1 2 days after registration e-mail sent offering phone assistance and ? 5 sack off first purchase to encourage trial. * Trigger event 2 Customer first purchases online.AR1 Immediate order confirmationAR2 5 days after purchase e-mail sent with link to online customer satisfaction survey asking about quality of service from driver and picker (e. g. item quality and substitutions). AR3 Two- workweeks after first purchase Direct mail offering tips on how to use service and ? 5 discount on next purchases intended to encourage re-use of online services. AR4 generic wine monthly e-newsletter with online exclusive offers encouragin g cross-sellingAR5 Bi-weekly alert with personalised offers for customer. AR6 After 2 months ? discount for next shop. AR7 Quarterly mailing of coupons encouraging repeat sales and cross-sales. *Trigger event 3 Customer does not purchase for an extended periodAR1 Dormancy detected Reactivation e-mail with survey of how the customer is finding the service (to identify any(prenominal) problems) and a ? 5 incentive. AR2 A further discount incentive is used in order to encourage continued usage to shop after the first shop after a break. Tescos online product strategy New Media Age (2005) ran a profile of Laura Wade-Gery CEO of Tesco. om since January 2004 which provides an interesting insight into how the business has run. In her first year, total sales were increased 24% to ? 719 million. Laura, is 40 years old, a keen athlete and has followed a varied career developing from a MA in History at Magdalen College, Oxford, an MBA from Insead Manager and partner in Kleinwort Benson Mana ger and senior consultant, Gemini Consulting Targeted marketing director (Tesco Clubcard), and Group strategy director, Tesco Stores. The ontogenesis overseen by Wade-Gery has been achieved through a combination of initiatives.Product range development is one key area. In early 2005, Tesco. com fulfilled 150,000 grocery orders a week but now also offers more intangible offerings, such as e-diets and music downloads. Wade-Gery has also focused on improving the customer experience online the time it takes for a new customer to complete their first order has been decreased from over an hour to 35 minutes through usability work culminating in a major site revision. To support the business has it diversifies into new areas, Wade-Gerys strategy was to make home rake part of the DNA of Tesco according to NMA (2005).She continues What we offer is delivery to your home of a Tesco service its an obvious extension of the home-delivered groceries concept. My May 2005, Tesco. com had 30,000 customers signed up for DVD rental, through partner Video Island (who run the rival Screenselect service). everywhere the next year, her target is to treble this total, while also extending home-delivery services to the likes of bulk wine and white goods. Wade-Gery looks to achieve synergy between the range of services offered. For example, its partnership with eDiets can be campaignd through the Tesco Clubcard loyalty scheme, with mailings to 10m customers a year.In July 2004, Tesco. com Limited paid ? 2 million for the exclusive licence to eDiets. com in the UK and Ireland under the URLs www. eDietsUK. com and www. eDiets. ie. done promoting these services through these URLs, Tesco can use the dieting business to grow use of the Tesco. com service and in-store sales. To help keep focus on home retail-delivery, Wade-Gery interchange womens portal iVillage (www. ivillage. co. uk) back to its US owners for an undisclosed sum in March 2004. She explained to NMA Its a very differe nt sort of product to the other services that were embarking on.In my mind, we stand for providing services and products that you buy, which is slightly different to the world of providing information. The implication is that there was insufficient revenue from ad sales on iVillage and insufficient opportunities to promote Tesco. com sales. However, iVillage was a useful learning experience in that there are some parallels with iVillage, such as message boards and community advisors. Wade-Gery is also director of Tesco Mobile, the sum Pay-As-You-Go venture with O2 which is mainly serviced online, although promoted in-store and via direct mail.Tesco also offer broadband and dialup ISP services, but believe the market for Internet telephony (provided through Skype and Vonage for example) is not sufficiently developed. Tesco. com have concentrated on more traditional services which have the demand, for example, Tesco Telecom fixed-line services attracted over a million customers in i ts first year. However, this is not to say, that Tesco. com pull up stakes not invest in relatively new services. In November 2004, Tescos introduced a music download service and just six months later, she estimates they have around 10% market share one of the benefits of launching relatively early.Again, there is synergy, this time with hardware sales. NMA (2005) reported that as MP3 players were unwrapped, sales went up even on Christmas solar day She says The exciting thing about digital is where can you take it in the future. As the technology grows, well be able to turn Tesco. com into a digital download store of all sorts, rather than just music. Clearly, film through video on demand would be next. But it has to be based firmly on abridgment of customer demand.She says The number one thing for us is whether the product is something that customers are saying they want, has it reached a point where mass-market customers are interested? There also has to be scope for simp lification. NMA (2005) notes that Tesco is built on a core premise of convenience and value and Wade-Gery believes what its already done with mobile tariffs, broadband packages and music downloads are good examples of the retailers knack for streamlining propositions. She says Weve actually managed to get people joining broadband who have never even had a dial-up service