Tesco is one of the pioneers of UK internet shopping. It first started selling groceries online as long ago as 1995 – in response to demand from customers. It was an enormous challenge, says JJ Van Oosten, CIO at Tesco.com, “not least because we had to invent and develop much of the technologies ourselves to make it work. But the fact is that customers were asking for home delivery of groceries and we just had to try and see if we could make a go of it.”
Indeed, throughout, he says, the development of the service has been led by the drive to satisfy customer demand.
Van Oosten said: “For all the amazing technologies and IT-driven work, the actual success of the service has been about getting a reputation for reliable, convenient deliveries that customers can trust.
“That’s a huge achievement. I was helping to pick orders for delivery last Christmas and I will never forget the fact that I found myself clearly picking some customers’ Christmas dinners. These customers were trusting us to deliver the most important meal of their year. It was a humbling moment.”
Fifteen years on, the service is still evolving in a way that aims to meet the needs of customers both at home and overseas. That means taking stock of customer comments and responding through the development of new solutions, not also in direct customer service but also through improvements to the tools that staff use, making their jobs simpler and therefore less likely to go wrong.
“What I do is ensure we apply innovative thinking and, where necessary, use innovative technology to make Tesco better, simpler and cheaper,” says Van Oosten.
Innovations include a picking system that locates exactly where every product is in any given Tesco, while handheld computers for delivery drivers can scan any product a customer doesn’t want for an immediate refund. Most recently, technology has been introduced that detects delivery vans’ location and texts customers with an update on order arrival time.
Further afield, Tesco is also now adding online ordering in some of the dozen countries where it now has stores. “That way,” says Van Oosten, “we can reach customers in areas that may not have a nearby Tesco store.”
Future developments in how customers can shop online at Tesco, whether from their computer, mobile phone or other handheld device, are now set to come thick and fast. That’s because Tesco has struck out in a new direction, encouraging third-party developers to design apps. So far those developers have come up with ideas ranging from a mobile phone shopping app to recipe and diet sites, Facebook apps, and Twitter accounts that respond to Tesco grocery requests. Developers share in the revenue brought in through the app.
Van Oosten says the move to involve third-party developers came as a result of seeing how mobile and web applications across the internet became ever more sophisticated in a relatively short period of time. This happened as different designers took and built on the best aspects of existing apps to create new generations of web tools. “The magic of evolution was clearly at play and we thought we should tap into this fantastic mindset,” he says.
Some interesting developments certainly, but doesn’t this present a risk to Tesco’s control of its shopping channels? That’s not how Van Oosten sees it: “We’re the first to accept that we won’t have all the best ideas but collectively the third-party developers will have. I have had some peers in my industry say to me that there are dangers to having third parties get between our brand and the customer, but I say to them, ‘So what? As long as the customer is getting a better and better experience with their ‘perfect app’ access to Tesco, then why not let third parties share in the success?”
In addition, he points out, the company protects itself through comprehensive terms and conditions and the ability to shut out any app that breaks those conditions. It also makes sure it retains control of registering new customers and of payment, which happens through the standard Tesco checkout page, also available on mobile. “I tell my peers,” he says, “that they should harness the wisdom of the crowds.”
Looking forwards, Van Oosten identifies three main areas of development that all CIOs should be preparing for. Again, it’s the customers who are leading the way.
Social networking: “Customers like talking to their family and friends about our products and services. We need to make that easier for them - for example by embedding some aspects of Facebook and other social networking sites in our own web site.”
Customer reviews: “Customers like to see what others think about products and services - good and bad! We intend to incorporate reviews into many of our product ranges online.”
Personalisation: “I'm a customer of Tesco online myself and I would love to see 'My Tesco' with all my favourite products and services within easy focus. For example, I want Tesco to detect that I have a dog, and bring deals on suitable products that I might be interested in to the forefront - pet insurance and ‘buy one, get one free’ offers on some dog food products. Equally, I don't have any interest in some other areas, so it would be great if they were pushed into the background. That way I can quickly locate everything that Tesco offers that interests me, and I know that will improve my loyalty as a customer.”
JJ Van Oosten will be speaking on How to Win in the Digital World of Retail in Track Two, Reaping What you Sow at Internet Retailing 2010. The event is held on October 12. To find out more or to register, click here.