Tesco

Tesco
plc is one of the largest UK retail chains, competing with Sainsbury and ASDA, but it is more than that. Tesco provides a handy pack of extra services, from being cell phone operator to energy saving consultant and DIY legal advisory (!).

It all started about a century ago, when Sir Jack Cohen, a retiree of Royal Army, invested into a grocery store in East End. Soon he began expanding his presence under the brand "TESCO", originating from "TE Stockell", a tea importer, and CO from his own surname. By the end of 1930's there were over 100 stores in country, and today Tesco operates in UK, US, Ireland and Eastern Europe, claiming to be a 3rd largest retailer in the world.

During the 1980's company began to implement a number of technological advancements in an effort to gain markket share and minimize operating costs. Despite a loss oof about 4,5% of the profits, they managed to increase market share from 15 to 18% in just over 6 months.

How? They created a Club Card, which gave customers an ability to gain points on every purchase over 10 pounds, which later could be transferred to cash-back and other benefits.
Simple as that, it allowed Tesco to gain more loyalty from the clients, but also the company started to gather customer profiles, based on the purchasing pattern, frequency and amount of money spent.

By gaining such knowledge, Tesco was able to project sales volumes, optimize and minimize inventories at hand and discover potential customer needs, not yet covered by shop's portfolio.
During 1998, company sent out 80000 variations of product offer booklets to over 8M customers, creating probably the most personalised off-line marketing campaign so far.

Subsequently, during the period of 1996-2001, Tesco introduced Tesco.com, becoming UK's largest e-grocer in just 5 years. By adding a number of value services, such as mentioned earlier travel agency, or making the website accessible for people with sight problems, (not to mention a network of gas stations and a finance institution with Royal Bank of Scotland) they became almost one-stop-shop for most customer needs.

The questions that remain open, though:
- Does optimization of product portfolio according to (majority of) customer's preferences leave such porfolio too generic?
- Is the quality of value-added services worth the time one saves by not doing competitive research?

The answer is probably not that simple. Most of the customers will enjoy shopping at such places, many others will prefer to search for cheaper insurance or favourite cereal brand...