E-Commerce Times Talkback
See Full Story
The search for positive signs in the online grocery world has usually required a keen eye.
Now it only requires a glance across the Atlantic to the UK.
That's where online grocer Tesco.com is poised to turn a profit for the entire year,
lending credence to one form of the Internet grocer business model and poking giant holes
in other parts of the grand scheme. In fact, Tesco.com has much to teach the entire
U.S. e-commerce community about how to reach the promised land of profitability.
I'm surprised by this article - Tesco could considerably improve its site by reduction of page size and image sizes - their home page is 45K just for the main frame HTML, 30K for the top and left frames, and then the right hand side and main frame images are about 25K worth - thats 100 Kilobytes. What was that inaccuracy in the article about Tesco having small pages and being quick to download? The journalist who wrote this piece should be told to concentrate on checking the story before publishing and this would have revealed the hollowness of this particular claim. With page sizes like that, it must be frustrating for the vast majority of people who don't have a high-speed Internet connection.
I'm a bit lost, so I'm using our offer to reply in order to find how I can find out how much a packet of either 160 or 240 Thypoo tea bags cost? I'm in France, Dijon and need this information to ask a friend to bring them over for me. The price does not need to be contractual, but I need to know a sum approx. Hope you can help. Or give the address where to contact to get the information.
Yours aye. MIKE
I agree. A disappointingly uninciteful article.
Its only interest for me was that I use the service and therefore able to 'know' more than the writer about how it works and as an IT professional something of the way the system works.
To your design point - They get round the bandwidth issues - not by design of the website, which is not that great, but by supplying a CD application and updating it by file transfer - that works well.
The user interface is not intuitive and took my wife and I months to get used to.
One thing that the article failed to mention was if Tesco charges a delivery charge for grocery deliveries (which I believe they do). Thus, the biggest thing that this company can teach its American counterparts is that if you are making 3% margin on a $100 order, you cannot absorb a $5 per stop delivery charge when offering free delivery (or even more ridiculous free delivery by appointment).
For those interested:
There's a fixed £5 charge ($7). Some of their competitors waive this over £100 ($140).
Because they are based out of stores they use the store server which I have found unavailable on a couple of occasions. The thought of turning up to a retail store that is essentially open 24 hrs a day and finding the store doors closed would be inconceivable. But this happens with the .com service.
The design of having hundreds of distributed store servers is inherently more difficult to manage, maintain and resolve problems.
The author contends that Tesco's model is the answer. It may be a good interim solution, but it is just that, interim, from a customer perspective.
For a robust service it requires much more process management. Tesco's is undoubtably a spectacular retailing success - coming from a heritage of down-market, dirty stores to becoming the premium retail in the UK. I'm sure there are lessons to learn from them, but it isn't 'the answer' as it is today. They'll develop it. Waitrose, a smaller premium retailer, delivers to cold storage at our office business park. They do this from key warehouses. It works well. Others are experimenting with collection from the store within 2 hours of submitting your order.
Hope this is of interest.
Tesco was in no rush...they didn't have venture capitalists breathing down their back...their success, going after the edges, would be considered feeble in the U.S.
From a logistics standpoint, how does a store with limited aisle space realistically pick and pack from store shelves? Is it really conceivable to do this without inconveniencing the customers already standing in the aisles? How do you keep your pick/pack people doing their jobs when in-store customers hold them up with inquiries? Seems a little unrealistic on several levels, but it sure beats having Webvan leave your market.
The '.com pickers' do have to compete with other shoppers and do get asked questions - but they have time; they are picking several hours before the order is due to leave the store - it no different to Disney's litter collectors who were seen as key customer relations staff.
As the stores are so large, they don't make a significant impact on traffic in the store. Especially since the delivery slots are spread evenly throughout the week. They also have hand scanners to automate and are clearly more knowledgeable than the average shopper about where the products reside. But I can't help feel that it is easier for the pickers to decide they can't find something rather than when a stock item is off the shelf ask someone to find it 'outback'.