Innovation and Entrepreneurship in Retail Industry

This report discusses the importance of innovation and entrepreneurship in the retail industry, focusing on Tesco plc. It explores the impact of emerging trends in the market and identifies business opportunities for innovation. The report also discusses the development of augmented reality (AR) and virtual reality (VR) services to enhance customer experience.

Opportunity
Innovation and
Entrepreneurship

Table of Contents
Table of Contents.............................................................................................................................2
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Background of company.........................................................................................................3
Emerging mega trends in the market......................................................................................3
Impact of changing trends in market......................................................................................4
Identification of business opportunity....................................................................................5
Development of product or service........................................................................................6
Feasibility study......................................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction
Innovation plays an important role in the sustainability of an organisation in the market
over a long period of time as with the help of innovation company products and services can be
improved in accordance with changing likes and preferences of customers. Potential
opportunities in market can be grabbed by the organisation so that it can successfully survive and
continue to make profits with the help of continuous innovation (Biemans, Griffin and Moenaert,
2016). Innovation also help the companies in gaining a competitive advantage in market by
effectively dealing with customer needs which can help in attracting them so that continuous
business opportunities can be developed in market. In this report Tesco plc is taken so that the
impact of emerging trends in retail industry on the company can be studied which help in
determining the way in which company can continue to survive in the market efficiently. Also
the entrepreneurial business opportunities which arise as a result of changing trends will also be
identified in this report.
Main Body
Background of company
Tesco plc is a British multinational retail company which deals in groceries and general
merchandise and was established in 1919 having its headquarters in England, UK. The company
has its branches in 11 countries across the globe through more than 6,800 shops and about
450,000 employees. The company is 3rd largest retailer in terms of gross revenues while 9th
largest in terms of revenue (Caneque and Hart, 2017). The company is focused on delivering
high quality products and services to its customers so that high value can be created for
customers so that their loyalty can be achieved. It also focuses on innovating its products and
services so that it can continue to meet the changing requirements of customers and also in
enhancing their convenience and experience through improved services.
Emerging mega trends in the market
With the growing use of technology in all the sectors of market innovation and change has
become an essential asset for all the businesses so that they can efficiently make use of
technology and enhance the quality their products and services. In the retail sector there are
various emerging trends which must be focused upon by retail organisations so that they can
continue to sustain in the market:

 The omni-channel imperative: Retailers use various channels so that they can delight,
engage and retain customers like online and offline stores, social media networks,
television, campaigns, YouTube ads, billboards etc. Various channels used by an
organisation can help in reaching to a variety of customers at larger scale so that sales of
company can increase (Cecora, 2019).
 Redefining customer engagement: It is important that customers are highly engaged with
the retailer so that effective services and products as per customer specifications can be
provided which can help in increasing customer loyalty towards company. Improving
customer service experience, consistent customer feedback etc. can be taken to increase
customer engagement.
 Product and service innovation: Retail sector experience is the most fast paced changes
through innovation in their goods and services so that better quality products can be made
available to customers at competitive prices along with increased discounts and offers so
that sales can be increased.
 Perfecting the delivery experience: It is important that delivery of products and services
are made both cost and time effective so that customers can receive their products in
mean time. Retailers are enhancing fast and free delivery of items to customers along
with improved packaging so that they can receive their products in good condition.
 Rise in subscription retail: In order to increase the loyalty of customers, retailers offer
them the ability to pay a set price so that specific benefits and discounts can be availed
along with recurring delivery. This helps the company in increasing its sales as in order to
avail the benefits of subscription, the customers revisit the sites of company so that they
can make their purchases (Ebrahimi and Mirbargkar, 2017).
 Increased inclination of customers towards companies using CSR: With the increased
awareness of customers about damages to environment because of businesses they have
become more inclined to purchase their products from retailer which are socially
responsible and follow CSR policies.
Impact of changing trends in market
With the changing trends in market it is important that Tesco plc also brings innovation in
its operations so that it can meet the changing needs and wants of customers. With the changing
trends in market it is essential that retailers adopt the market trends through innovation and

integration of technology so that high customer experience can be generated and competitive
advantage in market can be gained. These changing trends has also impacted on all the retail
businesses as increased use of technology is done by retailers so that they can increase customer
experience and reach more customers (Etzkowitz and Zhou, 2017). Tesco has also improved the
use of technology so as to market about its products and services and improve customer
engagement. Customers can do online shopping from the website or application of Tesco so that
they can get their items delivered to their homes. Also the company use CSR policies which help
it in attracting its customers through its ethical and responsible practices which is helpful in
saving the environment. The company has also improved its supply chain management so that
delivery of goods can be effectively done in real time thereby enhancing the convenience of
customers.
The changing trends in market has also enhanced customer expectations as they expect
high quality of services and products from companies and they can compare the quality and
prices of various companies related to similar products and services so that they can make better
decisions. It is thus important that Tesco provide products at competitive prices to their
customers that can help in attracting more number of customers and gain a competitive
advantage in market. With the emerging market trends Tesco need to find opportunities that are
present in market so that it can increase its sales and profitability while enhancing loyalty of
customers towards company (Konu and Komppula, 2016).
Identification of business opportunity
With the increase in innovation and improvement in information technology there has been
various changing trends in retail industry which provide various opportunities for businesses so
that a competitive edge in market can be achieved. Tesco can make use of Augmented Reality
(AR) and Virtual Reality (VR) techniques in the market so as to enhance customer experience
and attract more number of customers so that sales can be increased. These technological up
gradation can also help in improving everyday retail functions like shelf assortment, store design
and layout so that more number f customers can be attracted to make their purchases from stores
(Martovoy and Mention, 2016).
Tesco can make use of augmented reality in better understanding the customers and
analysing customer related data so that the changing trends in market can be analysed. AR can
also help in creating better relations with customers through new digital experience so that

customers can purchase their products on their mobile phones through better experience. Tesco
can also make use of VR so that better customer experience can be generated through interactive
and personalised customer experience. This can also be used by Tesco in training their customers
so that they can efficiently perform their roles and responsibilities and enhance customer
experience. Thus a new business opportunity that can be generated for Tesco by using AR and
VR technologies is that it can enhance customer experience and become highly competitive in
market. With the use of these technologies Tesco can achieve various benefits that can help it in
becoming leader in the retail industry and also help it in dealing with the changing needs and
wants of customers in an efficient manner (Mongelli and Rullani, 2017). More personalised
services can also be given by the company to its customers as they can have a digital experience
of using the products which can make online shopping more effective as customers can be
engaged with company services effectively. Thus including AR and VR in the technology of
company can help Tesco in making its services more effective and attracting more customers so
that its sales can increase.
Development of product or service
In order to provide innovative services to customers it is important that these services are
developed so that better services that can help in enhancing customer experience can be
provided. This can help in increasing the sustainability of company in market and increasing
customer loyalty towards company. Following are the steps which can help in developing new
service in Tesco that use AR and VR in improving the customer experience:
 Problem identification: Problems related with the existing services of company can be
found by contacting with the users and service staff so that the changing trends in
services can be identified along with the ways through which they can be made better
(Pauceanu, 2016).
 Idea generation: In this ideas need to be generated by participation of both the user and
staff members so that ideas regarding improvement in services or developing new service
can be generated. This stage can help in finding ways of improving the service so that the
best viable idea among various ideas can be selected and developed.
 Concept development and evaluation: The idea selected is developed so that its
evaluation can be done in terms of its profits which it can provide to the company and its

customers. AR and VR services can be developed by Tesco at this stage so that its
efficiency can be evaluated in generating better customer experience.
 Business analysis: At this stage the ability of business to develop the idea is analysed in
economic, technological and operational terms. Tesco at this stage need to analyse the
feasibility of idea in business so that the service can be developed by using its finances.
Also the company must have technology that can support the development of AR and VR
in company so that it can be efficiently applied in its processes (Samli, 2016).
 Development and testing: After the development of desired service it is to be tested in a
sample market so that its efficiency and effectiveness in achieving company goals can be
determined.
 Commercialisation: The idea is then commercially used and services are applied
effectively so that customers of company can avail the AR and VR services provided by
Tesco.
 Post evaluation: This relates to taking customer satisfaction surveys, feedbacks etc. so
that improvement can be done in the service of company.
Feasibility study
AR and VR can help Tesco in capitalising its marketing strategy by providing better
shopping experience to its customers so that they can have an immersive experience and increase
user experience. This can help in increasing the online sales of company as better customer
experience can be generated through AR and VR which can help in making better choices for the
products that they want so that high value for money can be generated. Feasibility study is
important so that the ability of service in achieving company aims can be assessed. AR and VR
are feasible for Tesco in terms of technology, economy, legality and operations as with the use of
these services the company can enhance customer experience (Schmitz and Guerrero, 2017).
Also Tesco has the available technology and finances which can help in effective
implementation of these technologies in company. The company can regularly monitor the
feasibility through financial statements so that the increase in profits with the use of AR and VR
can be analysed and its efficient use can be done by Tesco.

Conclusion
From this report it can be said that innovation in products and services can help the
companies in effectively dealing with changing market conditions so that customer’s demands
can be effectively fulfilled. Also through innovation companies can make their product and
services better and gain a competitive advantage in market and increase their market share.
Development of products and services can be done by application of various stages so that these
can be efficiently developed which can help in enhancing the effectiveness of company in
market.

References
Books and Journals
Biemans, W.G., Griffin, A. and Moenaert, R.K., 2016. Perspective: New service development:
How the field developed, its current status and recommendations for moving the field
forward. Journal of product innovation management, 33(4), pp.382-397.
Caneque, F.C. and Hart, S.L. eds., 2017. Base of the pyramid 3.0: sustainable development
through innovation and entrepreneurship. Routledge.
Cecora, J., 2019. Cultivating grass-roots for regional development in a globalising economy:
innovation and entrepreneurship in organised markets. Routledge.
Ebrahimi, P. and Mirbargkar, S.M., 2017. Green entrepreneurship and green innovation for SME
development in market turbulence. Eurasian Business Review, 7(2), pp.203-228.
Etzkowitz, H. and Zhou, C., 2017. The triple helix: University–industry–government innovation
and entrepreneurship. Routledge.
Konu, H. and Komppula, R., 2016. Customer involvement in a new service development
process: The case of “Feelgood in Lapland”. Anatolia, 27(4), pp.421-432.
Martovoy, A. and Mention, A.L., 2016. Patterns of new service development processes in
banking. International Journal of Bank Marketing, 34(1), pp.62-77.
Mongelli, L. and Rullani, F., 2017. Inequality and marginalisation: social innovation, social
entrepreneurship and business model innovation: The common thread of the DRUID
Summer Conference 2015. Industry and Innovation, 24(5), pp.446-467.
Pauceanu, A.M., 2016. Innovation and entrepreneurship in Sultanate of 0man –an empirical
study. Entrepreneurship and Sustainability Issues, 4(1), pp.83-99.
Samli, A.C., 2016. Empowering the market economy through innovation and entrepreneurship.
Springer.’
Schmitz, A., Urbano, D., Dandolini, G.A., de Souza, J.A. and Guerrero, M., 2017. Innovation
and entrepreneurship in the academic setting: a systematic literature
review. International Entrepreneurship and Management Journal, 13(2), pp.369-395.