Tesco, well known as Britain’s leading food retail group with a presence also elsewhere in Europe, Asia and the United States has also been a pioneer online. Tesco Product ranges
The Tesco.com site acts as a portal to most of Tesco's 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 well as services offered in partnership with specialist companies, such as dieting clubs, flights and holidays, music downloads, gas, electricity and DVD rentals. Tesco Competitors
Tesco currently leads the UK’s other leading 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 Super 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%)
Some 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 providers such as Ocado which originally just operated within the London area have 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.com relies on in-store advertising and marketing to the supermarket's Clubcard loyalty scheme's customer base to persuade customers to shop online. NMA (2005) quotes Nigel Dodd, marketing director at Tesco.com as saying: ‘These are invaluable sources as we have such a strong customer base’. However, for non-food goods 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.com use what he describes as a ‘commitment-based segmentation’ or ‘loyalty ladder’ which is based on recency of purchase, frequency of purchase and value which is used to identify 6 lifecycle categories which are then further divided to target communications: “Logged-on”“Cautionary”“Developing”“Established”“Dedicated”“Logged-off” (the aim 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 follow-up communications triggered after different events in the customer lifecycle. In the example given below, communications after event 1 are intended to achieve the objective of converting a web site visitor to action; communications after event 2 are intended to move the customer from a first time purchaser to a regular purchaser and for event 3 to reactivate lapsed purchasers. * Trigger event 1: Customer first registers on site (but does not buy).Auto-response (AR) 1: 2 days after registration e-mail sent offering phone assistance and £5 discount 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-weeks after first purchase -...