TESCO's Digital Transformation
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Case Code: BSTR472 Case Length: 14 Pages Period: 1919 - 2014 Pub Date: 2015 Teaching Note: Available |
Price: Rs.400 Organization: Tesco Plc. Industry: Retail Industry Countries: United Kingdom Themes: Business Transformation, Online, Digital Marketing and Retailing |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Club Card
The introduction of Club card was a milestone in Tesco's journey. It was born out of the initiative taken by Terry Leahy (Leahy), Marketing Director of Tesco (1992-1997). He and his team members while looking for innovative ways and ideas to improve the performance of the business; came across Dunhummby, a Data Analytics company specializing in analyzing consumer data. Dunhummby was given the responsibility of designing a model that met Tesco’s requirements. Dunhummby came up with the Club card. After a series of trials which ran for almost a year, the Club card was introduced nationwide in the year 1995.
The operation of the Club card was simple. Customers, who were interested in becoming members of the scheme, approached the nearest Tesco store, filled and submitted the membership form there. The customers were asked to fill in the contact information, details of household activities, hobbies and interests, etc....
Online Expansion
Tesco started offering products online in 1990. In the beginning, customers could place orders through the telephone, fax or the internet. The order processing mechanism was manual. It was slow, ineffective, and often resulted in the failure of the system. Gradually improvements were made in the service. Tesco's website 'tesco.com' started offering a wide range of products and services from the year 2000. The website grew to be popular and attracted a large number of customers.
The management of Tesco was keen on developing a customer-centric website which was simple to navigate. "Actually, we weren't particularly bothered about the Website, as long as it enabled customers to do the basics of a shopping trip; that is, find the products they need, look at them, make their choice, and pay. So, we decided to keep it as straight forward as possible" Laura Wade-Gery, CEO Tesco.com 28 . The website created an impression in the minds of the customers that Tesco provided whatever a customer wanted at a great value (In terms of satisfaction)...
Going Digital
Tesco constantly improved operational performance and the customers' shopping experience both offline and online. It provided an extensive in-store digital experience for the consumers. Scan as you shop was an innovative way of shopping introduced by Tesco in the year 2008 for its Club card members. Around 20,000 hand-held devices were provided in the stores to facilitate the process of Scan as you shop. Using these handheld devices, a consumer scanned the barcode on whatever products he/she wanted to buy and placed the goods in bags. This helped in preventing a final rush for billing. The device updated the shopping information of the customer and made it easy for him/her to pay the bill amount at the designated counter without much delay. At the counter, a system was installed that allowed the customer to scan the details of the shopping uploaded in the handheld device. During the entire process, customer services executives were available at various levels to assist the customers....
Tesco On Social Media
Tesco managed a Facebook 32 account for interacting with its customers. Tesco's social media team posted regular updates on their Facebook page. The posts were mainly related to promoting its brand and the products. To encourage better customer interaction, Tesco awarded Club card points to customers who shared information and feedback on various topics and issues. It followed a set of social media guidelines to protect the interests of the customers and social media users. The social media team was advised to protect the values of the customers and the company, stick to authentic information, protect copyright issues in terms of content postings, etc. Tesco's Facebook page was provided with a number of apps and games. Any user (or) customer who wanted to play a game (or) utilize the app had to agree to like the page first...
Integration in Multichannel Strategy
Tesco provided its customers with various options to access online shopping. They could log on to the website directly or access it through mobile phones and tablets. Once an order was placed, the products were delivered as per the mode of delivery selected by the customer. The products were directly delivered to the home (or) the customers were allowed to collect them from a nearby Tesco store (or) from a designated collection points. Tesco associated with Microsoft to develop an App called Tesco Access. This app facilitated access to Tesco stores online via wireless and mobile devices.....
Road Ahead
Tesco began adopting a holistic approach to its multichannel offering and looking at how customers were interacting through its online, digital, and in-store points of contact. The management realized that any future success would depend upon the successful integration of both offline and online points of contact. "If you reinvent you've got more of a chance of growth in future. Bricks and clicks will power growth in long term and medium terms" said Clarke. The relevance and importance given to digital transformation by Tesco could be seen with the formation of an executive committee on Digital marketing.....
Exhibits
Exhibit I: Online Sales Figures of Tesco Plc
Exhibit II: Functioning of a Handheld Device
Exhibit III: Snapshot of an Issue Solved through Twitter
Exhibit IV: Tesco's Evolving Strategy to Address Online Demand
Exhibit V: Components of Tesco's Multichannel Strategy
Exhibit VI: Organization Structure of Tesco
Exhibit VII: Digital Transformation Model
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