Opening: Hallo, Ladies and Gentleman
Thank you for inviting me to speak at this conference. It is a pleasure for me to be here today at the London School of Economics and it is great to see so many business students at one place. Introduction: My name is Sir Alen Iverson and I am the PR assistant at Tesco, the largest British supermarket chain. And today I would like to talk a little about retail market general. How it has developed the last couple of years. And I talk about Tesco’s current problems and finally I will comment on the company’s efforts to solve them taking the changing consumer behavior into consideration. I expect my presentation will last about 30 to 45 minutes
Feel free to ask any questions, speculations or something that you cannot understand you might have during my presentation. The world and the retailing is different from what it used to be. People wants bigger things now and that is the reason why we need to gather all the stores in one place. Shopping malls are the new today. All the small convenience stores cannot compete with the big shopping malls where you have the oppurtunity to shop all what you want. Many consumers do not have the time to run around from one shop to another to find what they are looking after, therefore the consumers prefer to shop in one big shopping mall. An example of a very successful retail outlet is Tesco. Tesco is a supermarket which contain pretty much everything you need. Tesco is gathering information about their customers through a club card, so if the customers change their way of buying Tesco will be first to know it. But you cannot knpw everything.. As the most of you probably know, then Tesco had some of our worst years in history. In Januar we came out with a profit warning showing that we have hadlower profits as expected.
Tesco’s shares have fallen 20 % and it has an expected loss of the market value of 5 billion pound sterling. After Tesco´s many successful years we have changed our boss, CEO Chief Terry Leahy who had been CEO from march 1997 until march 2011. He made Tesco expand so much, that some thought of him to be “too successful” and he was criticised a lot because of this. The critics thought that he had forgotten to tighten the economics, and to keep focus on our driver’s values, which is Quality and Service. The new CEO is Philip Clark who´s expected to get Tesco back on the right track. He will obviously be facing a long and hard task. We had an ill-fated price drop, which means that we went from being a quality store, to a discount store. This also meant that we did not live up to our costumers expectations. The consequences of this was that we decided to drop 182 of our branches.
Then we could reconnect with the costumers and change our corporate culture. Another way that we thought we could make this possible was by introducing the new private label called Every Day Value. This would give the customers a chance to buy quality products for a reasonable price. Further more we opened a few bakeries in our stores to give the customers a better experience. Then we made some further research on our products, by asking our costumers what they thought of them, referring to design and colours. It turned out that our costumers thought our colours to be “too hard”. A result
of this research was that we added softer colours of course.
We at Tesco have received a lot of complaints from our customers referring to the lack of employees to give a better service and empty shelves. That’s why we´ve planed to employ twenty thousand extra employees. So far we´ve managed to employ an estimated 8000 new employees to improve the service and to avoid the empty shelves. In the year 2007 Tesco founded Fresh & Easy in the United States of America. But Tesco should have waited. It was a really bad timing. Fresh & Easy failed to take off and you could probably blame it on financial crises. Therefore we decided to shut it down.
To solved these problems we have invested 150 million pounds in online shopping, which mainly is for selling non-food products. Then we made an app for the use on your phone. This will make it possible for you to shop from your phone, and go straight down to our stores and pick up our products, which of course is ready to go.
By doing these things and keeping on we can now all ready see that our sales has increased by 1,3% and we will keep on investing in the stores on the United Kingdom market with about 1 billion pounds.
In Tesco, we have chosen to make it possible for our customers to become members of the shop chain. That gives our customers benefits every time they shop in our stores and create loyalty to Tesco. And at the same time memberships give useful information about the shoppers purchase patterns.
The weekday is very stressful for many people, so we need to make it easier to do the daily shopping. One option could be to use Internet based shopping to help the customers save time. In times where the number of smartphones are increasing, a free application that enable users to easily order product from the stores with a few finger clicks, would help people to save time and use their spare time for other useful things. One problem when you are shopping in a retail store is that you might end up in a long line. Most people shop at the same time of the day, that is, when they are getting home from work. That creates problems with long lines at the cash disk. To
prevent all that wast of time waiting in line, you could install small cash disks with self-service to make the payment much faster for the busy customers. We have already seen self-service cash disks but in Tesco we think that self-service cash disk will be a part of the future shopping to a much higher degree.
Finally, let me sum up the main points of my presentation on this subject: * How the retail market, the world and us customers has changed. * Tesco terrible 12 months and how we will solve the problems * Ideas of shopping in the future – E-business, but still physical stores I believe that we at Tesco have done a great job so far. But there is still a long way to go. If we want to keep on being one of the biggest companies in the world we have to keep on focusing on the constant changing culture and behaviour of our costumers. Every one of you is different and you all have different desires.
We will make Tesco just the right shop for you!
Thank you for listening and again my name is Alen Iverson and I hope you liked or join my speech.
[ 1 ]. http://en.wikipedia.org/wiki/Shopping_mall
[ 2 ]. http://www.tesco.com/
[ 3 ]. http://en.wikipedia.org/wiki/Tesco_Clubcard and Tesco, Philip Clarke 1 (4:03) [ 4 ]. Tesco’s Terrible 12 Months
[ 5 ]. Tesco’s Terrible 12 Months
[ 6 ]. Tesco: Domestic Turnaround a Priority
[ 7 ]. Tesco’s Terrible 12 Months
[ 8 ]. Tesco’s Terrible 12 Months and Tesco: Domestic Turnaround a Priority [ 9 ]. Tesco: Domestic Turnaround a Priority
[ 10 ]. Tesco: Domestic Turnaround a Priority
[ 11 ]. Tesco, Philip Clarke 1 (4:03) and 2 (4:53)
[ 12 ]. http://www.dailymail.co.uk/debate/article-2135553/The-self-service-checkout-The-site-new-middle-class-rebellion.html [ 13 ]. Tesco, Philip Clarke 1 (4:03) and 2 (4:53)