Tesco.com - IT and online strategy and business model

2. INTRODUCTION
 Tesco:A Major Retail
Grocery selling store
 Setup by Jack Cohen
 First to Introduce Self-
Service mode
 Growth by Acquisitions
 Introduced Trading
Stamps
 Businesses include
financial services, online
grocery retailing ,Petrol
filling Stations

3. TESCO.COM-
A RARE PROFITABLE.COM
 1996: Decided to tap the Internet for Business.
Accepted phone, fax, and Internet orders.
 First retailing company that was an Internet
Service Provider.
 Proved Online Grocery selling as a viable
Business.

4. REASONS FOR PROFIT
GENERATION
Online customers tended to order costly
Merchandise in large quantities
Opportunities for cross selling (Pop-up
windows)
Customers ordered in bulk to justify delivery
charges of $ 5

5. A UNIQUE BUSINESS
MODEL
“The Pick-In-The-Stores System”
Rejected warehousing Model : As demand
was low and it was a huge investment.
Opted for Positioning Information System
in Existing Stores.
 Used Shopping cart equipped with Online
Displays.

6.  Divided Outlets into six Major zones – Bakery,
Groceries, Frozen Foods, Chilled-Foods, Liquor,
Produce.
 Electronic Scanning of Ordered Items
 Suggested Substitute Products for Out of Stock Items.
Continued…

7. FLOWCHART

8. THE INGREDIENTS OF
SUCCESS
Delivering Excellence:
 Problem: Complex
Delivery Procedure
What Tesco.com did?
 Optimal use of Time
and Resources
 Predetermined route
maps for Delivery
 Generated $27 million
through delivery Fees

9. INVENTORY MANAGEMENT
 Inventory monitoring and
replenishment
How these conditions were
fulfilled?
 Used a wheel with light of
various colors
 Customer profile Database
generated through loyalty
card scheme

10. CUSTOMER SERVICE
Differential pricing
Variety of merchandise
availability on
Tesco.com
Text to speech
conversion technique
was introduced for
Blind people
Timeliness of deliveries
and accuracy with
orders served

11. WEBSITE MAINTENANCE
 Tie up with knowledge
management consultants -
Intervowen
 Website updated on
regular basis
 CD version of website for
dial up mode customers
 System checks were
carried out
 MyWeb Software adopted

12. Low fixed cost but high
variable cost
Intensifying
competition
Increasing Internet Traffic
Entry in U.S. Market
REASONS TO WORRY

13. Presented By:
Ashima
Pragyandipta Patnaik
Mayur Kansal
Neetika Panwar
Megha Yadav

14. Queries???

15. Sales increased from
$19.2Million to
$264 million
Online venture sustained due
to
Smart-small business
The Safeway alliance-The
biggest testimony
UNIQUE BUSINESS MODEL-
THE OUTCOME