stock only 2,000 lines. The system keeps track of what products are stocked
and how much is in the store, and is then able to use this information,
together with the sales data, to calculate how much more should be ordered.
Most products have to be calculated every day, on a one or two day lead
time (the time between ordering and delivery).
The SBO system also manages the recording of all store-based stock
movements (for example damaged goods, out-of-code waste, transfers to other
stores), stock count scheduling and validation. The stores also use the
system to influence their orders, for example factoring up expected sales
of ice cream when a hot spell is forecast.
ICT systems used by Customer Service Centre.
The centre provides a central customer service operation for the company;
it handles requests for information and customer enquiries. It also handles
the management and administration of Tesco Clubcard, and the processing of
orders for the Baby Catalogue and the Home Shopping service.
The scale of the operation, and the efficient organisation of staff to
provide exceptional customer service, requires the extensive use of IT both
in telephone and information systems.
To give you an idea of the scale of company operation, Tesco employs over
400 staff, both full and part-time. The Clubcard loyalty scheme has over 10
million customers. In a typical week Tesco get 100,000 telephone calls,
5,000 letters, and 1,500 e-mails from customers, and company generates
7,000 outbound letters to customers.
Tesco uses IT to manage 100,000 calls a week, both to organise the calls
efficiently and to provide information on the timing and length of calls
for planning and monitoring purposes. Among the systems Tesco uses are:
ACD - Automatic call distribution (Meridian)
This system manages the way calls get routed to Customer Service Centre
staff. Calls into the centre are distributed to ensure that call queues
are managed effectively. Real time monitoring facilities provide
information on service levels.
Call forecasting and scheduling system (QMax)
The distribution of calls varies significantly throughout the week. This
system is used for forecasting when calls are likely to be made. The
information is then used to schedule staff availability so that they are
there to take the calls.
IVR - Interactive voice response
This is a menuing system on the telephone to filter out those calls that
can be handled without an operator. The customer selects various options
so that calls can be transferred directly to the appropriate service or
person.
There are many ways in which IT provides and organises information for
Tesco. For example :
Customer services have systems to assist in logging customer enquiries,
handling responses and tracking progress on outstanding issues.
Tesco has an addressing system, based on the Post Office Address File, that
enables accurate addresses to be captured quickly.
Tesco has a knowledge base on an intranet to help staff deal with customer
queries. This contains frequently asked information about the company’s
stores, products, services and policies, as well as general information
about nutrition and healthy eating.
Management reporting is used extensively to provide information to the
business on customer concerns. Tesco is now looking at new technology as a
way of pro- actively reporting on any serious issues that emerge requiring
close, urgent attention.
Orders from Home Shopping customers may be received over the telephone, by
fax or via the Internet. These are collated by store and go through a
delivery scheduling system which plans the most efficient delivery route,
and are then transmitted to the stores for packing and delivery.
The Clubcard system enables staff to deal with customer queries related to
the service. This involves managing a large number of routine calls with
regard to changes of address, lost cards, and so on. IVR systems are used
to intercept these routine calls so that they can be handled automatically.
A1
Alternative approaches which might enable the business to better meet its
objectives.
The retail grocery market is intensely competitive today and no serious
contender can afford to rest on its past achievements. This should
encourage Tesco to pioneer many new ideas. By listening and responding to
customer needs, Tesco will continue to bring in new ideas and services. Its
latest venture, with the Royal Bank of Scotland, launched in November 1997,
is to offer customers competitive financial services through its stores. It
is fifty years since Jack Cohen opened his first self-service shop, and we
expect Tesco stores in fifty years' time to be as different from those we
know today as Tesco’s current stores are to the stores of fifty years ago.
Non-food retailing is a major part of Tesco strategy. Tesco is increasing
competition and offering customers real value and choice in all areas from
sportswear to software, electricals to spectacles. By introducing these
ranges to more of company’s stores Tesco also offer customers the
convenience of shopping for great value non-food along with their food and
household goods.
More choice in-store includes many new lines for the home and garden,
motoring and leisure, fashion and cosmetics. Opticians, mobile phones and
health and beauty are examples of departments that have been expanded to
meet customer demand. Tesco relaunched its clothing range to offer better
value, quality and choice.
In this year Tesco should continue to bring its customers big names at
competitive prices. Last year, for example, Tesco sold 14-inch Bush TVs and
Vodafone, Orange, One 2 One and Cellnet mobile phones at record low prices.
Film and batteries came down by 30% and cuts of between 15% and 50% are
being made on stationery, pet accessories, video tapes, CDs and DVDs and
many other popular products.
The convenience of shopping for non-food alongside food is what Tesco
should offer customers. At the start of the year Tesco already had 90
stores trading with full non-food offer in the UK. During the year Tesco
should increase this as much as possible through extensions, refits and new
store development programmes.
Through these programmes Tesco will have more Tesco Extra stores including
its newest at Newcastle upon Tyne. It is Tesco’s first UK store to be
designed and built to hypermarket blueprint, using many of the elements
which Tesco has found to be successful in European and Asian stores. It
has given to the company the opportunity to introduce a much wider range of
non-food products to the UK, giving its customers even more choice when
they shop at Tesco.
Through innovating and investing for its customers Tesco is leading the way
in new forms of retailing. Tesco is the largest on-line grocer in the
world, and through the rapid development of its e-business Tesco is now
offering customers real choice and value on the internet.
Tesco.com is new 100% subsidiary company that runs company’s e-commerce
business, which is an important part of company’s future strategy. Tesco
should ensure that it has a real focus, the relevant resources and can move
quickly.
Grocery home shopping business offers customers shopping on-line choice,
value and convenience. Hundreds of new customers are registering every day
and Tesco has the capacity to grow this business at a significant rate.
On the internet Tesco is not constrained by space as the store can be as
large as you like. Company’s Internet customers now have an exciting range
of non-food offers beyond food shopping - just a few clicks away. Tesco’s
new book store offers a choice of 1.2 million titles, with 50% off top
lines and Tesco has an entertainment store selling over 300,000 CD, video
and DVD titles.
Tesco’s European business is focused on the Republic of Ireland and the
four Central European countries of Hungary, Poland, the Czech Republic and
Slovakia accessing a population of 68 million people. In Ireland the
business is progressing well as Tesco near completion of rebranding
programme. And in Central Europe Tesco continue its rapid hypermarket roll-
out opening 11 stores and 1.3 million square feet in the year.
Regional focus and market leadership is a key objective of Tesco’s strategy
in Central Europe. Tesco is the only retailer in all four countries -
Hungary, Poland, the Czech Republic and Slovakia. Company’s portfolio now
includes 19 hypermarkets totalling two million square feet of retail space.
Tesco is meeting and stimulating demand in these markets as customers begin
to recognise the better choice, quality and value that Tesco offers.
Tesco is pursuing an active programme of store openings which will take the
company to 69 hypermarkets by the end of 2002, and will make the company
the market leader across the region.
The hypermarket blueprint is the focus of Central European activities. At
100,000 square feet or more, hypermarkets give Tesco the space to offer
customers extensive food and non-food ranges at outstanding prices.
Tesco is learning all the time. The format is internationally transferable
and adaptable to different regions, and part of the success has been to
supplement UK skills in grocery retailing and customer service with
international expertise.
In the Republic of Ireland Tesco should continue to make good progress.
Without the benefit of any new stores, sales increased by 6.1% in the year.
Cumulative sales growth since acquisition is now 20%, moving market share
to 23.3%.
Ireland and Central Europe are already a significant part of the Group
employing 27,000 people which will grow even further as Tesco move forward.
Asia is the second international region where Tesco is expanding. The Tesco
Lotus business in Thailand now has 17 hypermarkets and is well on the way
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