Tesco home shopping managing director Simon Belsham has said technology is the key to creating a truly multichannel retailer.
Speaking at the grocer’s dotcom centre in Erith which opened at the end of October, Belsham said its multichannel customers – those who shop online and in stores – are more loyal, and spend more.
He said Erith is an “important part of the jigsaw in its multichannel plan”. He said the centre, the sixth Tesco has built in the last seven years, operates “technology which is second to none”.
Erith, Tesco’s fourth generation dotcom centre, has automated ambient and chilled picking zones, meaning no more trolleys. For half of its ambient volume of goods, it has ‘goods to person stations’ whereby products and customer trays go directly to the picker, rather than previous centres where the picker had to walk to collect products.
Richard Lamb, groceries operations development director, said this technology is “a first for grocery dotcom in the UK”. He said rival Ocado has “something similar” but added: “Theirs operates on a timed system, while ours is more flexible so offers more efficiency.”
Belsham also said Tesco is using technology in several trials in a bid to make the most convenient shopping offer for the customer.
Tesco relaunched its smartphone apps for IOS and Android two weeks ago, with added options such as bar code scanning so customers can add products to their online shopping basket.
It is also trialling an app available to shoppers of its Chelmsford superstore, called MyStore, which uses the customer’s online profile to help them shop in stores in a more logical way. It also gives customers special offers based on what items they buy regularly online.
Tesco managing director for London Andrew Yaxley said “technology is at the leading edge of Tesco’s London stores”.
He said: “There are several trials across London, such as card only self scan tills, which are helping us find the most convenient way for customers to shop.”
Yaxley said the role of London within the wider Tesco group is to “bring together the multi-format, multichannel proposition, then roll that out across the country”.
Tesco is also ramping up its delivery options for groceries. It is trialling a same day delivery option in Mansfield in Nottinghamshire, and is seeking to expand the number of sites where it offers click and collect.
It currently has 220 sites where it offers grocery click and collect, the majority of which are in its larger stores. It also has a handful of trial locations in the York area including a school, park and ride, and office parks.
Tesco also has two Express stores – in Datchet and Harrow – which offer click and collect via a van parked at the back of the store. It will seek to increase the number of these locations it offers the service from.
Belsham would not comment on any specific negotiations the retailer is having, but pointed out that Asda’s deal with Transport for London to offer click and collect from a selection of stations is the type of conversation Tesco is also having to widen its delivery options.
Belsham said that while at the moment there isn’t a need for deliveries combining both groceries and general merchandise, “over time we will look to bring these two together when there is a customer need”.
Belsham, who moved back to Tesco in February this year after a stint as director of non-food at Ocado, said: “Part of the reason I moved back to Tesco was because I believe the future is a multichannel model. It’ not just stores or online, it’s both. It’s about providing the most convenient offer for each customer.”
He added: “More than half of the market is in small baskets – whether that’s top up shopping, food on the go, or shopping for that evening – and online doesn’t cater for that, so the model has to be stores and online.”
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Analysis: Tesco home shopping MD Simon Belsham on how technology is fuelling its multichannel ambitions