Tesco: Analysis of Retail Trends and Business Performance

This report examines the retail industry, with a specific focus on Tesco's performance during the pandemic. It explores key trends such as AR-powered shopping, eco-friendly practices, virtual dressing rooms, and technology-driven home deliveries. The analysis includes an overview of Tesco's strategies, customer feedback, and SWOT analysis. The report also provides several recommendations for Tesco to enhance its business performance, including leveraging technology for customer engagement, investing in VR fitting rooms, utilizing self-driven delivery options, hiring technology experts, implementing influencer marketing, and maintaining direct customer contact. The conclusion highlights the significant impact of the pandemic on the retail sector and how Tesco adapted to meet changing customer demands.

Inquiry based learning

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
Trend in retail..............................................................................................................................2
Analysis of the organization........................................................................................................3
Recommendations........................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
APPENDIX......................................................................................................................................9
Interview......................................................................................................................................9

INTRODUCTION
In the recent times, most of the businesses are focused upon their operations because
pandemic affect their business in adverse manner. It has a direct impact upon the retail industry
because lockdown decreases the overall functioning of a business in adverse manner. Similarly,
the chosen firm for the report is Tesco, one of the leading supermarkets in UK. It offers range of
grocery products, cloth, financial services, home-décor etc. The report will describe the trends
within retail industry and through interview, study will perform analysis of an organization
during pandemic. Lastly, it will recommend the ways through which company will easily
improve their overall business performance.
Trend in retail
2020 has been one of the most challenging year for the retail industry due to pandemic
because retailers have to make extra efforts in order to retain their customers. However, the
challenges presented by pandemic reflect that 2021 will be completely relied upon innovation
and technology related trends. Therefore, some of the trends are as mentioned below:
AR powered shopping experience: Such technology started from last many years, but
due to pandemic most of the retailers would understand the importance of using Augmented
reality (AR), machine learning (ML) and artificial intelligence (AI). Most of the shoppers
continue to rely on the online shopping during pandemic and retailers took benefit of the
situation by using AR technology in order to bridge the gap between digital and physical. For
example, Shopify introduced Shopiy AR which is an easy to use toolkit for business to create
their good experience to showcase their products to customers. Results indicate that this work
and it also helps to increase 94% higher conversion rate (Retail industry in 2021: top five trends
to look out for, 2021).
Eco-friendly shopping: Covid-19 has changes the customer buying behavior and that is
why, consumer becoming increasing aware of how to protect the environment by using
recyclable products. In 2021, Tesco expects to collect and recycle 1000 tonnes which is a great
initiatives performed by the company to create awareness (Stewart, 2021). Also, company stop
using plastic bags many years ago and also run many campaigns in order to create awareness

among people. That is why, customers prefer Tesco as one of the most renowned supermarket
whose aim is to think about society and environment along with business’s growth.
Virtual dressing rooms: Another trend used by the retail industry during pandemic that
increases the sales of the company by 20%. It is drive from AI and VR, used by the global retail
giants like Macys and Adidas (Wei, 2021). Now, Amazon is also involved Virtual dressing room
development in order to boost the market share. Due to Covid, customers faces troubles in trial
rooms and to solve the issue, companies are tie up with advance technologies in order to provide
better experience and stop the spread of virus among them. So, it can be stated that it provides an
ability to sample and model the products remotely.
Home deliveries will rely on technology: it has been examined that online shopping has
seen an exponential increase in 2020 onward due to pandemic, due to closed of physical stores.
So, in online boom retailers start thinking to offer home deliveries would be the best option to
increase sales (Al-Suraihi and et.al., 2020). For that, they most of the retail giant also include
self- driving deliveries and drone deliveries for their customers. For example, Walmart also uses
the self-driven cars in order to deliver the grocery to one of their customers. Thus, it can be
stated that Covid has had adverse impact on the retail sector, but it completely transforming the
shopping experience.
Focus on the personal health and self-care: It can be stated that pandemic change the
items that online shoppers prefer to purchase. During first wave of pandemic, attitude of people
heavily focused on purchasing personal health products. Research entails that 34% of the
consumers increases their purchase of personal hygiene products (Foster, 2021). In order to meet
the demand of the customers, retailers add variety of the healthy products and also, online
grocery brands prioritize to support the healthy lifestyles for their shoppers and employees. Also,
customers are modifying their personal habits such as cleaning more surfaces, increasing their
hand washing due to Covid-19. Thus, retailers should consider this as an opportunity and also
increases the online selling as well so that it would create a positive impression upon the
customers.

Analysis of the organization
In order to conduct in-depth analysis of an organization, primary research has been
conducted in which three customers of Tesco has been randomly selected. Also, through the
means of interview, a deeper insight about the quoted firm regarding to their shopping habits,
preferences can be analyzed. All the customers stated that they enjoy shopping with Tesco since
8 to 10 years and this in turn reflects that the company has a strong customer retention strategy.
Also, it can be stated that company keep introducing new schemes, loyalty cards for their
customers in order to attract the users towards it.
Moreover, one of the customers stated that company has an effective arrangement during
pandemic so that none of the customer faces any challenges. Such that it start priority hours for
elderly and vulnerable customers. Also, it offers online delivery system for their customers at
urgent basis. During pandemic, company registered 1.5 million delivery and around 850,000
vulnerable customers registered with a firm who are eligible for the priority access to online slots
(Tesco: during Covid-19, 2020). In order to meet the changing demand of customers it has been
identified that company start offering healthy products to their customers. This also attracts the
health conscious people towards it and increases the overall performance.
Apart from this, it has been examined that company highlight in its website for the safety
of customers that if it is possible to shop online instead of offline so please do, as company open
many online slots for customers like you to help anytime. This in turn reflects that company has
immediately implemented the strategies to combat the situation of pandemic and also comply
with government guidelines as well (Hänninen, Kwan and Mitronen, 2021). Moreover, through
SWOT analysis of the company it has been realized that company won many awards and it is the
only company who use technology in the best optimal way to enhance the shopping experience
during emerging of digitalization. Currently, it also big data such that its automated warehouse
solution which are an urban fulfillment centre. Also, it started providing online payment facilities
to their customers and installed the application Scan Pay Go for their users in order to lead their
customers towards cashless.
Therefore, it is clearly evaluated that company implement best measures to meet the
current market needs and that is why, it has earn a strong goodwill in the market as well. Also, it
has been realized that company also focused upon advance technology and offering healthy

products to their customers more rather than meat. Such that in 2014 onward, company launched
a range of healthy foods to help customers lead healthier lifestyles. This include more than 230
products from bakery and ready meals to yoghurts as well as healthy treats. So, it can be stated
that company make many initiatives that assist them to improve the diet, as range of people
suffered from obesity. Hence, it is a good initiate took by Tesco and further develop different
strategy to take a business at further level of success.
Recommendations
Through the above, it has been examined that Tesco implement range of strategies, but
still there are some of the key areas which needs to be overcome. For that, effective ways should
be suggested that helps quoted firm to improve the brand and also enhance the financial
performance over next period. The suggestions are as mentioned below:
 In order to combat the situation of Covid-19, company implement different ways,
however to increase the customer base, it is suggested to the company to install the
technology which signifies the customers about its limit. In order to comply with the
government guideline, company already change the timing for customers, but when the
situation will be normal, company must think about the same (Hussein and Kais, 2020).
This in turn concern with the health and safety of customers so that it will improve the
brand image within market.
 In addition to this, Tesco is also dealing in clothing, so it is suggested too the company to
introduce VR fitting rooms in which customers do not have to use trial rooms. With the
help of effective technologies, customers have to stand in front of that and they determine
whether it will be suitable for them or not (Rosenlund and et.al., 2020). This in turn
reflects that company will increase the customer retention and also attract new customers
toward it.
 Moreover, it has been examined through the analysis of the organization that, company
has implement the technology that assist to improve the efficiency. Also, during Covid,
company offers the range of strategies, but it is suggested to use self-driven cars in order
to deliver the products to their customers. This in turn assist them to use the human
resource in another field so that company will enhance the overall performance in
positive manner.

 Further, it is also recommended to the company to hire the experts for their company who
implement advance technologies. This help Tesco in near future to meet the demand of
customers and also improve the financial position of the company as well (Roy, Balaji
and Nguyen, 2020). Moreover, it also deal at different locations and that is why, company
has a strong workforce. Hence, either company must develop effective training and
development session for the employees or hire new employees who manage the crucial
work easily. Thus, it will be more beneficial for the company to improve the overall
performance and meet the defined aim of a business as well.
 It is also suggested to the cited business to invest within influencing marketing in order to
attract the customers. Secondary study reflects that customers are attracted easily by the
use of influencing marketing, because they considered them as a role model. That is why,
it would be good opportunity, as audience put trust in brands that showcase authentic
voices and sometime brands don’t prioritize authenticity which in turn considered the
biggest issue. Thus, it will be a good opportunity for the company, if they invest within
such marketing tools to attract range of employees and minimize the issue of sales within
non-season time.
 Lastly, it is further suggested to the companies to have a direct contact within customers
either verbal or written format. This in turn assist them to examine their actual loopholes
and key areas through which customers are not satisfied with. Through survey, company
encourages their users to examine their pitfalls and then make strategies in order to
minimize the same (Shankar and et.al., 2021). In addition to this, by evaluating the
response of customers, company further implement the strategy which in turn assist
business to raise the overall performance and attract the customers. This can be also done
through social media platforms in which customers share their experience with other or
company as well.
CONCLUSION
By summing up above, it has been concluded that pandemic change the shopping
experience of customers and also most of the giant retailers took an advantage of the situation.
For them, online shopping become a boom and increases the market share as well. There are
many trend of retail industry discussed above which includes implementation of AI and VR,

focused upon eco-friendly products, personal health and online deliveries. Moreover, through
analysis of Tesco, it has been summarized that company make different strategies in order to
meet the changing demand of customers and offering high quality products will assist firm to
increases its market share. Lastly, by following the recommendations mentioned above, Tesco
also increases its brand image and grab attention of many customers towards it.

REFERENCES
Books and Journals
Al-Suraihi, W. A. and et.al., 2020. The Effect of Customer Relationship Management on
Consumer Behavior: A Case of Retail Industry in Malaysia. International Journal of
Management and Human Science (IJMHS). 4(3). pp.32-40.
Foster, B., 2021, March. New Era Chain Supply on Retail Food Industry in Indonesia. In IOP
Conference Series: Materials Science and Engineering (Vol. 1115, No. 1, p. 012019). IOP
Publishing.
Hänninen, M., Kwan, S. K. and Mitronen, L., 2021. From the store to omnichannel retail:
looking back over three decades of research. The International Review of Retail,
Distribution and Consumer Research. 31(1). pp.1-35.
Hussein, R. S. and Kais, A., 2020. Multichannel behaviour in the retail industry: evidence from
an emerging market. International Journal of Logistics Research and Applications, pp.1-
19.
Rosenlund, J. and et.al., 2020. The emergence of food waste as an issue in Swedish retail. British
Food Journal.
Roy, S. K., Balaji, M. S. and Nguyen, B., 2020. Consumer-computer interaction and in-store
smart technology (IST) in the retail industry: the role of motivation, opportunity, and
ability. Journal of Marketing Management. 36(3-4). pp.299-333.
Shankar, V. and et.al., 2021. How technology is changing retail. Journal of Retailing. 97(1).
pp.13-27.
Stewart, B. L., 2021. Pandemic Panic and Retail Reconfiguration: Consumer and Supply Chain
Responses to COVID-19. Journal of Family & Consumer Sciences. 113(1). pp.7-16.
Wei, S., 2021. Analysis of Marketing Innovation Under the New Retail Mode-Taking “Luckin
coffee” as an Example. In E3S Web of Conferences (Vol. 235). EDP Sciences.
Online
Retail industry in 2021: top five trends to look out for. 2021. [Online]. Available through:
<https://www.retail-insight-network.com/features/retail-industry-in-2021-top-five-trends-
to-look-out-for/>.

Tesco: during Covid-19. 2020. [Online]. Available through:<https://www.tescoplc.com/covid-
19/>.

APPENDIX
Interview
Q1. How long you have been with Tesco as a customer?
Q2. Do you face any challenges during pandemic while shopping?
Q3. What do you like the most about Tesco?
Q4. Does company made different arrangement during pandemic?
Q5. Would you like to suggest something about company’s environmental policies?