Tesco Grocery online – our journey September 2010.
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Transcript of Tesco Grocery online – our journey September 2010.
Tesco Grocery online – our journey
September 2010
Tesco today
Tesco.com today
Online Grocery today
£2bn sales
Profitable
350,000 orders per week
20m items picked every week
Over 2000 vans
Over 1.2m active customers
Home delivery isn’t new
In 1994 customers were saying…
I’m a busy working Mum; I
have less time
I’m housebound but really
independent; how can I do my shopping?
Why can’t you do the
work for me?
Why can’t the shopping
come to us?
Customer led, not technology led
…our Technology platform in 1994
The internet to the rescue
So how does it work for the customer?
Who is our shopper?
0%
5%
10%15%
20%
25%
30%
Total
Upmar
ket
Mid
mar
ket
Less
Afflu
ent
South
Mid
lands
North
& S
cotla
nd
Pre-F
amily
Young
Fam
ily 0
-4 Y
ears
Mid
dle F
amily
5-9
Yea
rs
Family
10+
Yea
rs
Older
Dep
ende
nts
Empt
y Nes
ters
Retire
d
2008 2009 2010
What do they buy?Dotcom participation
020406080
100120140160180F
roze
nre
ad
y
Ba
ke
db
ea
ns
&
Fro
zen
ve
ge
tab
les
Ho
us
ho
ldp
rod
uc
ts
So
ft D
rin
ks
Bre
ak
fas
tc
ere
als
Ch
ick
en
Co
ok
ing
pro
du
cts
Bis
cu
its
Ve
ge
tab
les
Fru
it
Ind
ex
Listening to our customers
…the sum of hundreds of small innovations
Telematics
Scan item scan tray
Would I buy it?
Dynamic scheduling
Variable service charge
Suggested substitutes
Big battery
Electric vans
Hybrid vans
Shopper hours
Flexi contracts
Pre-picking
Space saving trolley
Picker BRAG Bagless deliveryCubiscan
Picker routing
Structures
Site stability
FavouritesRecipes
Green slotsCall me
VBV
Premium service
Bag recyclingVan step change
Driver training
Healthy alternatives
Dispatch process
Snake loading
Picking algorithms
Van scheduling
Driver assessments
Vehicle incident board
Hours forecasting
Pre-picking
Customer notes
Same day delivery
Hub stores
Weighing scales
Van turnaround process
Dispatcher
Earlier deliveries
e-coupons
Shapes and colours
Pick audit tool
Alternative locations Loyalty gifts
Goodwill gestures
TWIST
New customer pages
Mystery shoppers
Grocery images
TrolleysSubs on manifest
Ranging algorithms
Tray weights
Product separation
Van charging points
Green slots
Van refrigerationRight pay
Team leaders
Dotcom academy
Know your stuff
Inside out bags
Van GPS
Product mappingReturn tray option
Pick across vans
Catchment road speeds
Live traffic updates
To perfect the shopping trip…
To deliver Every Little Helps
Shorter than we’d like
Price match substitutions
Satisfaction with Subs – % very/fairly satisfied
20%
30%
40%
50%
60%
70%
P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12Target TY LY Very/quite dissatisfied TY
Launched Price Match
Subs
Mobile phone apps
Click and collect
Routing and drop density
Dotcom only stores
What have we learnt?
The Obstacles• Sales cannibalisation
• Pricing and trading decisions
• Its too small to worry about
• Parochial anti-customer behaviour
• “It’s too difficult!”
• “This will never make money!”
Our Response• Separate business unit
• Same prices
• The right accounting…
• …own P&L
• ….with shared KPIs...
• Customer obsession
• Operational efficiency
• Shared infrastructure
• Constructive tension
The future
It [the kitchen] has become a real social area now, because we keep the laptop
there one of the boys will always be on it and I’ll be cooking over there and talking
to them
I use everything in combination, chatting to my mates about the programme I'm watching on my phone, looking up stuff about it on my laptop if it’s boring...you just keep everything open something is
always active
I just cook with my laptop on the kitchen counter!
Thank you