Tesco Grocery online – our journey September 2010

Tesco today

Tesco.com today

Online Grocery today £2bn sales Profitable 350,000 orders per week 20m items picked every week Over 2000 vans Over 1.2m active customers

Home delivery isn’t new

In 1994 customers were saying… I’m a busy working Mum; I have less time I’m housebound but really independent; how can I do my shopping? Why can’t you do the work for me? Why can’t the shopping come to us?

Customer led, not technology led …our Technology platform in 1994

The internet to the rescue

So how does it work for the customer?

Who is our shopper?

What do they buy?

Listening to our customers

…the sum of hundreds of small innovations Telematics Scan item scan tray Would I buy it? Dynamic scheduling Variable service charge Suggested substitutes Big battery Electric vans Hybrid vans Shopper hours Flexi contracts Pre-picking Space saving trolley Picker BRAGBagless delivery Cubiscan Picker routing Structures Site stability Favourites Recipes Green slots Call me VBV Premium service Bag recycling Van step change Driver training Healthy alternatives Dispatch process Snake loading Picking algorithms Van scheduling Driver assessments Vehicle incident board Hours forecasting Pre-picking Customer notes Same day delivery Hub stores Weighing scales Van turnaround process Dispatcher Earlier deliveries e-coupons Shapes and colours Pick audit tool Alternative locations Loyalty gifts Goodwill gestures TWIST New customer pages Mystery shoppers Grocery images Trolleys Subs on manifest Ranging algorithms Tray weights Product separation Van charging points Green slots Van refrigeration Right pay Team leaders Dotcom academy Know your stuff Inside out bags Van GPS Product mapping Return tray option Pick across vans Catchment road speeds Live traffic updates To perfect the shopping trip…

To deliver Every Little Helps

Shorter than we’d like

Price match substitutions Satisfaction with Subs – % very/fairly satisfied Launched Price Match Subs

Mobile phone apps

Click and collect

Routing and drop density

Dotcom only stores

What have we learnt? The Obstacles Sales cannibalisation Pricing and trading decisions Its too small to worry about Parochial anti-customer behaviour “It’s too difficult!” “This will never make money!” Our Response Separate business unit Same prices The right accounting… …own P&L ….with shared KPIs... Customer obsession Operational efficiency Shared infrastructure Constructive tension

The future It [the kitchen] has become a real social area now, because we keep the laptop there one of the boys will always be on it and I’ll be cooking over there and talking to them I use everything in combination, chatting to my mates about the programme I'm watching on my phone, looking up stuff about it on my laptop if it’s boring...you just keep everything open something is always active I just cook with my laptop on the kitchen counter!

Thank you