TESCO case

The remarkable strategy change that TESCO took was the implementation of computerized checkout systems and introduction of The Tesco Clubcard. This strategy has significantly brought more customers and by 1996, Tesco has become the number one retailer in UK.

In my opinion, the introduction of Tesco Clubcard was a clever move. Customers are benefited with points they have collected to be exchanged with products and services, and Tesco has precise data on buying patterns of its consumers. With its massive volume of data, Tesco needs to handle better the information by investing in NCR Teradata data warehouse, providing Tesco with 360-degree view of its customers. With this big investment in data handling system, Tesco could generate more personalized approach to its customers. Tesco has competitive advantage in offering its customers based on their buying patterns and their last baskets purchased. Tesco offers more personalized vouchers and specific offerings to its Clubcard holders. Marketing expenditures could be more efficiently targeted on its regular customers and their need segments.

Although it is not stated in the case, I strongly believe that Tesco also has benefited in having accurate information in real time stocks movements through this sophisticated data handling, which have big impact in supply chain management. The more effective supply chain, the more cost reduced, which means Tesco could compete with further price reduction and offering with products and services.

Tesco's Clubcard IT system does not stop to that level only. To give more added value to its customers, Tesco integrates with several partners to provide another services such as telephone account and financial products.

By implementing another smart move in utilizing internet to offer its Tesco Direct service, Tesco has succesfully become the number one e-grocer. The idea is to provide Clubcard holders a different buying experience. Customers not only do groceries on internet, but they also can purchase videos, books, electrical appliances, and others. Tesco also added several features such as Price Check, which can be used by users to compare prices against several leading supermarkets; financial services; shopping services; and online customer services. Furthermore, Tesco has developed Tesco.com to be accessible for those with sight problems and hearing impaired.

I believe that, by making big investment in information system and focusing on customers, Tesco has gained position in its customer mind and firmed its position as number one in UK's retailers competition.