Rlchard Pettlnger

BEST PRACTICE CASE STUDY: TESCODIRECT.COM

Tesco Plc. is the largest UK supermarket chain. It has a 21% share of the groceries market in the UK. It has overseas interests in Thailand, where it owns the Lotus chain of supermarkets, and in Poland, Hungary, the Czech Republic, and Slovakia, where it has opened state of the art superstores in major cities in these countries.

Tescodirect.com was opened in October 1998 as a ‘‘virtual grocer.’’ The aim was to generate 4% of total turnover via the Website, which could become the company’s ‘‘virtual branch’’ – effectively its (at the time) 869 ^th store.

Potential sources of stress quickly became apparent, especially at the point of customer service.

» Delivery staff: those ordering their groceries over the Internet were given a three hour window during which their order would be delivered. Ability to meet these deadlines was only partially in the hands of delivery drivers, given the state of traffic on UK roads, and the fact that the majority of customers lived in urban areas. Those who lived in rural areas also suffered because of the long distances involved in some cases. It also became apparent that not every order included the offers and discounts that were available to those who went to the company’s stores

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to do their shopping. Delivery staff therefore found themselves struggling through congested traffic or along country roads, only to be faced with complaints of lateness, overpricing and wrong deliveries. This was accentuated by the fact that because there was very little within their control, there was consequently little that they could do about it to resolve the customer’s dissatisfaction.

» Customer services and public relations staff: the volume and nature of complaints handled consequently rose sharply. While the company has always adopted a very positive attitude towards complaints based on a ‘‘no quibble’’ replacement and refund policy, the sheer volume of complaints nevertheless caused stress.

The company addressed each as follows.

» Drivers were given small amounts of generic and highly deman- ded products to carry in the vans so that, where orders were incomplete or inaccurate, there was the potential for putting them right. They were also given discount vouchers that they could issue at their discretion, to actual and perceived aggrieved customers.

» Additional customer services and public relations staff were taken on, and others were trained in this expertise as part of multi-skilling and organization development programs. This was because the company recognized that dealing with extensive volumes of complaints is, in itself, stressful and harmful in the long term to individual general well-being.

After its launch Tescodirect.com had an initial surge of interest followed by a sharp decline in usage. In 2001 it reported that only 15% of customers who had used the Internet service had done so three times or more. Nevertheless, pronouncing itself satisfied with the performance of Tescodirect.com, and with its specific resolution of stress-related problems, it announced a joint venture with Safeway.com to open up the virtual groceries market in the US in June 2001.

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