2016年2月29日星期一

4. Analysing successful factors of grocery home shopping in UK


After understanding what current state and development of China's e-commerce market. In order to acknowledge what factors adverse China's grocery online shopping, it is important that analysing successful factors of grocery home shopping with typical grocery retailers in UK. With comparison between UK and China, I will easily find the difference and problems. And before that, the following intresting vedio can show how Chinese people shopping in the China's supermarket or retailer and what is local Chinese supermarket look like?
(Chinese supermarket in China)

In UK, it is common phenomenon that consumers buying food in online grocery like Tesco famous grocery in daily life. UK Market Synopsis has been estimated (2009) that the online food market was worth £3.2 billion in 2008, and is growing by an average 4% every year.  Let's see the following BBC news reports vedio to understand current grocery online shopping market in UK. 


Tesco: Tesco is a famous food retail in UK and it also has own online retail market (Tesco.com， 2015). And Tesco.com was just established in 2000 with high speed to develop. “Company’s annual online sales exceeded $5 billion and Tesco.com is recognized as the world’s largest online grocery, with a customer base of little less than 1 million and more than 250,000 orders completed a week.”(Sumyla, 2011) The main reason is that Tesco provides a mature online grocery platform to bring lots of benefits for customer involved saving time, money and energy, due to it can reduce the transportation costs and staffs fee.

ASDA: it was founded in 1999, also has online food stores. “ASDA owned by US corporation Wal-Mart since 1999, is the only supermarket with the potential to become a thorn in the side for Tesco. Wal-Mart is the biggest food chain in the world and has annual sales eight times bigger than Tesco’s” (Sumyla, 2011). Certainly, not just only Tesco and ASDA two online food retailers successfully developed, Sainsbury’s or Otto group has advanced achievement in the world as well.

What successful factors enable to promote its sales growth every year? There are two aspects one being ‘the value price’ which involve both lower price and the quality of product and the second being “The principle is really very simple - nobody will sell the equivalent product of the same quality for less money. And further, we guarantee that if a customer can buy the same item cheaper from a competitor, within a three mile radius of their Tesco store, we will refund twice the difference and drop our price accordingly.”  (Tesco.com, 2015a). And also Tesco.com (2015b) states that we work closely with our suppliers to ensure that products are always of the highest quality and that they are delivered to our stores in the best possible condition. That means online retailer not only provide the lower prices for products, but also the business must give a good quality to their customers at the same time. If a customer purchases a product with a discount online, but the product is in bad quality when they receive it making the consumer lose trust. And one more thing is worth mentioning that Tesco always treats customer with high loyalty. In my opinion, loyalty is most important part of customer service, as it is a key to maintain business development. Therefore, the lower price with high quality could be positive influencing customer intention to purchase food online.

The second point is well -customer services. Customer service could cover many areas. Different business strategies are able to improve capacity of customer services. “Last year we held 115 customer question times where we met nearly 9,000 customers. Talking to customers and finding out what they expect from Tesco is vital to the continued growth of the business.” (Tesco.com, 2015c). Regard to technology as aspect of customer services, it has an advanced information system like club card membership. “We now have in place highly sophisticated computer systems with which we are able to analysis the information we receive through Club card.”(Tesco.com, 2015d). “Everything we do is aimed at encouraging our customers, new and old, to stay with us and maintain their loyalty” (Tesco.com, 2015e). These business strategy will immensely improve customer services, due to Tesco takes the aim of client groups face to different kinds of level of customer.And the following video can show how the Tesco grocery online shopping operate their market and customer services.

(Tesco online shopping launch & introduction, Source: Youtube)

The above two points might strongly enhance the online business competitiveness. Providing lower prices with high quality to attract more customers which providing much more discount for their customer by cutting the labour cost and transport cost to make up loss of discount. Tesco capture an important point which customers want to use club card to help them reduce budget. Vijayasarathy and jones (2000) find that savings in transaction costs that lead to better deals on price can positively influence consumers’ attitudes on the intention to shop online. And offer club cards to enlarge membership at the same time let customers stay with their business for long time. And the important is that Tesco maintain friendly relationship with each level of age for customers which enlarge consumer scope. Furthermore, they have advanced computer system and management of network to promote them to analyse information from their customers'feedback.



Reference:

  • BBC news Online food shopping what is a 'dark' supermarket, 2014, [Video] Youtobe. 
  • Tesco online shopping launch & introduction, 2013, [Video] Tesco malaysia, Youtobe

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