IMAT5211: A Case Study of Tesco's E-commerce Strategy and Systems

This case study examines Tesco's e-commerce strategy, focusing on its online systems, strengths, and weaknesses. It begins by outlining the rise of e-commerce and its benefits, then provides an overview of Tesco's business activities and its e-commerce platform, Tesco Online. The analysis delves into the strengths of Tesco's customer-centric design and CRM, while also addressing weaknesses such as limited online offerings and complex ordering processes. Opportunities for improvement include fully embracing e-commerce and customizing the online portal. The study concludes with recommendations for Tesco to enhance its e-commerce system to improve customer base and profitability, emphasizing the importance of effective online portals, delivery systems, and payment options. Desklib provides a platform to access similar solved assignments.

Running head: E-COMMERCE SYSTEMS
E-COMMERCE SYSTEMS: A CASE STUDY OF THE E-COMMERCE STRATEGY
OF TESCO
Name of the Student:
Name of the University:
Author’s Note:

1E-COMMERCE SYSTEMS
Introduction
As opined by Saleem et al.1 the advancement or the recent developments in the
spectrum of the technological field had positively affected the contemporary business
enterprises and their business activities. Lin et al.2 are of the viewpoint that the impact of the
different disruptive technologies not only manifests itself in the business models or the
structures which are being used by the contemporary business enterprises but also in the wide
array of the services or the goods offered by them as well. Furthermore, while the different
disruptive technologies had opened up new windows of opportunities for the business
enterprises it had also substantially enhanced the level of business rivalry or competition
faced by them in the markets of their operations3. In this regard, mention needs to be made of
the e-commerce business model which in the present times had gained a substantial amount
of prominence and is being extensively used by the different business enterprises in order to
earn a higher amount of profitability4. However, at the same time it needs to be said that
despite the high propensity shown by the contemporary customers regarding the use of e-
commerce business services it had been seen that very few enterprises have embraced it
completely or are using it partly. This paper intends to analyse the construct of e-commerce
systems in the particular context of the UK retail enterprise Tesco which uses it partly.
1 Saleem, Hussain, M. Khawaja Shaiq Uddin, Syed Habib-ur-Rehman, Samina Saleem, and Ali Muhammad
Aslam. "Strategic Data Driven Approach to Improve Conversion Rates and Sales Performance of E-Commerce
Websites." International Journal of Scientific & Engineering Research (IJSER) (2019).
2 Lin, Yong, Jing Luo, Shuqin Cai, Shihua Ma, and Ke Rong. "Exploring the service quality in the e-commerce
context: a triadic view." Industrial Management & Data Systems 116, no. 3 (2016): 388-415.
3 Kasemsap, Kijpokin. "Implementing electronic commerce in global marketing." In Encyclopedia of e-
commerce development, implementation, and management, pp. 591-602. IGI Global, 2016.
4 Pantano, Eleonora, ed. Successful technological integration for competitive advantage in retail settings. IGI
Global, 2015.

2E-COMMERCE SYSTEMS
E-commerce systems and the benefits offered by them
Mena and Bourlakis5 have articulated the viewpoint that the process of electronic
commerce or simply called by the name of e-commerce refers to the act of selling or buying
products or services over the internet or electronic portals of the business enterprises. As
discussed by Falk and Hagsten6, there are various factors which have given rise to the
emergence as well as the popularity gained by this pattern or style of conducting business in
the present times. For example, it had been observed that the lives of the modern individuals
have become much more complicated as well as hectic thereby leaving them very little time
to indulge in activities like going out to shop for groceries or retail products7. More
importantly, the construct of e-commerce affords the opportunity to the customers to order
products or services from the comfort of their homes and also to receive it at their doorsteps.
In addition to these, it is seen that the customers have the opportunity to undertake thorough
market research and also read the reviews given by the existing customers or the past
customers regarding the products or services that they are opting for. Moreover, the
handsome or attractive discounts which are being offered to the customers for undertaking
transactions or buying products through e-commerce is another factor which had given rise to
the e-commerce model of business8. Furthermore, the majority of the business enterprises
offering e-commerce services to the customers have easy return or refund policies which in
turn substantially add to the gratification factor on the part of the customers for using the
same. The resultant effect of this is that the traditional retail outlets or the “brick and the
5 Mena, Carlos, and Michael Bourlakis. "Retail logistics special issue." International Journal of Physical
Distribution & Logistics Management 46, no. 6/7 (2016).
6 Falk, Martin, and Eva Hagsten. "E-commerce trends and impacts across Europe." International Journal of
Production Economics 170 (2015): 357-369.
7 Akter, Shahriar, and Samuel Fosso Wamba. "Big data analytics in E-commerce: a systematic review and
agenda for future research." Electronic Markets 26, no. 2 (2016): 173-194.
8 Yu, Ying, Xin Wang, Ray Y. Zhong, and George Q. Huang. "E-commerce logistics in supply chain
management: Practice perspective." Procedia Cirp 52 (2016): 179-185.

3E-COMMERCE SYSTEMS
mortar” ones registered a growth rate of 4.1% in comparison to the 16.7% growth rate
registered by the e-retail enterprises of UK in the year 20189. This as a matter of fact goes on
to show the popularity as well as the increasing demand for the e-commerce services among
the customers in the nation of UK.
Overview of the business activities of Tesco
Tesco Plc., founded in 1919 by Jack Cohen, is the largest retain enterprise of the
United Kingdom and is presently operational in more than seven different nations of the
world in the continents of Europe and Asia10. The concerned enterprise is reputed for the
plethora of products or services that it offers to the customers starting from groceries, books,
furniture to financial, telecom and other similar services11. As a matter of fact, the retail
enterprise under discussion here is presently the 3rd largest retail enterprise of the world in
terms of gross revenue and the 9th largest one in terms of net revenue12. In addition to these, it
was seen that the annual revenue of the concerned enterprise for 2018 was more than £57,491
million and it around 7000 retail stores operational in seven different nations of the world13.
More importantly, the online or e-commerce portal of the concerned enterprise, namely,
“Tesco Online” had helped in a substantial manner towards the improvement of the financial
prospects of the concerned enterprise over the years14. Having said this, it is seen that despite
the success it had been able to attain through its e-commerce service it is still relying heavily
9 Butler, Sarah. "Tesco And Rivals Turn Against Hypermarkets As Internet Shopping Takes Over". 2019.
https://www.theguardian.com/business/2012/mar/04/online-shopping-changes-hypermarket-strategy.
10 Tesco.com. "Tesco - Supermarkets | Online Groceries, Clubcard & Recipes". 2019. https://www.tesco.com/.
11 Theguardian.com. "E-Commerce | Technology | The Guardian". 2019.
https://www.theguardian.com/technology/efinance.
12 Finch, Julia. "Tesco Leads The World Online Growth And Profit". 2019.
https://www.theguardian.com/technology/2000/jan/20/efinance.personalfinancenews.
13 Tesco.com. "Tesco - Supermarkets | Online Groceries, Clubcard & Recipes". 2019. https://www.tesco.com/.
14 Ecommercenews.eu. "Tesco Launches One-Hour Delivery Service Tesco Now". 2019.
https://ecommercenews.eu/tesco-launches-one-hour-delivery-service-tesco-now/.

4E-COMMERCE SYSTEMS
on the ‘brick and mortar’ model that it had been following since its foundation in the 20th
century.
E-commerce system used by Tesco
The “electronic commerce website” of Tesco, popularly called by the name of
“Tesco.com” or “Tesco Online”, was launched by it in the year 2000 in response to the high
demand of the UK customers for the e-commerce services15. As a matter of fact, it is seen that
the online portal or the website of the retail enterprise under discussion here had been
designed in such a manner that the customers have the option to order any product or service
offered by the concerned enterprise straight from the same. In addition to this, the customers
can specify the location or the destination at which they want the concerned product or
service at the desired time and they even have the option to pay for the concerned product or
service over the online portal of Tesco itself or at the time of receiving the delivery16. More
importantly, it is seen that the concerned enterprise does not charges any additional charges
from the customers for the home delivery of the products or services which are being
delivered to the customers and also they have easy return as well as refund policies in case
the products or services delivered to the customers are defective in nature or not as per their
expectations17.
Another important aspect of the e-commerce services offered by the retail enterprise
under discussion here is the fact that apart from the online portal of the enterprise, the
customers also have the opportunity to scan the product or service code or for that matter the
QR code of the same and offer the desired location of delivery to get the product or service at
15 Vickers, Amy. "Tesco Stacks Up Online Sales". 2019.
https://www.theguardian.com/media/2001/apr/10/newmedia.marketingandpr\.
16 Ecommercenews.eu. "Tesco Launches One-Hour Delivery Service Tesco Now". 2019.
https://ecommercenews.eu/tesco-launches-one-hour-delivery-service-tesco-now/.
17 Theguardian.com. "E-Commerce | Technology | The Guardian". 2019.
https://www.theguardian.com/technology/efinance.

5E-COMMERCE SYSTEMS
their doorstep18. Needless to say, the e-commerce services offered by the concerned
enterprise had substantially enhanced the sale of the products or services offered by the
enterprise and thereby contributed towards the enhancement of its profitability significantly.
Critical Analysis of the E-commerce system used by Tesco
A critical analysis of the e-commerce system used by Tesco is likely to yield
significant information regarding the same and also the manner in which the concerned
enterprise can enhance it so as to improve the financial returns earned by it. Pantano et al.19
have articulated the viewpoint that one of the most important strength points of the e-
commerce strategy used by the enterprise under discussion here is the fact that it had been
created taking into account the demand of the customers for the same and also the satisfaction
level of the customers as well. For example, it is seen that taking into account the perspective
of the different customers and also the aspect of their satisfaction the concerned enterprise
had designed its online portal in a user-friendly manner wherein the users have the
opportunity to easy order the products or services, pay for the same, return them, get their
money refunded in case of any issues and others20. As discussed by Falk and Hagsten21, this is
important since it turn had enabled the enterprise under discussion here to earn the loyalty or
the satisfaction of the customers which in turn had positively affected the net revenue
generated by it over the years. Another important strength point of the online or e-retail
services offered by Tesco is the fact that it is on par with the ones offered by the other full-
18 Finch, Julia. "Tesco Leads The World Online Growth And Profit". 2019.
https://www.theguardian.com/technology/2000/jan/20/efinance.personalfinancenews.
19 Pantano, Eleonora, Constantinos-Vasilios Priporas, Stefano Sorace, and Gianpaolo Iazzolino. "Does
innovation-orientation lead to retail industry growth? Empirical evidence from patent analysis." Journal of
Retailing and Consumer Services 34 (2017): 88-94.
20 Yu, Ying, Xin Wang, Ray Y. Zhong, and George Q. Huang. "E-commerce logistics in supply chain
management: Practice perspective." Procedia Cirp 52 (2016): 179-185.
21 Falk, Martin, and Eva Hagsten. "E-commerce trends and impacts across Europe." International Journal of
Production Economics 170 (2015): 357-369.

6E-COMMERCE SYSTEMS
fledged e-retail business enterprises operational in UK like Aldi, Asda, Amazon and others22.
Along with these, the concerned enterprise had also designed an effective customer
relationship management wherein the customers have the opportunity to effectively articulate
their concerns or the issues that they are facing and also get them redressed.
Saleem et al.23 are of the viewpoint that the strength or the positive points of the
online or the e-commerce services offered by Tesco notwithstanding there are some inherent
weaknesses of the same. For example, it is seen that despite the unprecedented success
attained by Tesco Online over the years it had been seen that the concerned enterprise had
still not fully embraced the e-commerce system and as a matter of fact it is seen that there are
many products or services which are not offered by the online portal of the concerned
enterprise and to purchase them the customers had to physical visit the stores of the
enterprise24. This can be explained on the basis of the fact that the enterprise under discussion
here had separate retailers for both its online and offline business. Another important
weakness of the online services offered by the concerned enterprise is the fact that the
customers had to undergo a tedious process so as to book the orders or to get the deliveries at
their doorsteps and many times it is seen that the products or the services which are being
delivered to the customers are faulty or defective25. However, at the same time it needs to be
said that there are various opportunities which galore the concerned enterprise regarding the
e-commerce system which it is presently using. For example, on the score of the success that
22 Butler, Sarah. "Tesco And Rivals Turn Against Hypermarkets As Internet Shopping Takes Over". 2019.
https://www.theguardian.com/business/2012/mar/04/online-shopping-changes-hypermarket-strategy.
23 Saleem, Hussain, M. Khawaja Shaiq Uddin, Syed Habib-ur-Rehman, Samina Saleem, and Ali Muhammad
Aslam. "Strategic Data Driven Approach to Improve Conversion Rates and Sales Performance of E-Commerce
Websites." International Journal of Scientific & Engineering Research (IJSER) (2019).
24 Theguardian.com. "E-Commerce | Technology | The Guardian". 2019.
https://www.theguardian.com/technology/efinance.
25 Vickers, Amy. "Tesco Stacks Up Online Sales". 2019.
https://www.theguardian.com/media/2001/apr/10/newmedia.marketingandpr\.

7E-COMMERCE SYSTEMS
it had been able to attain through its e-commerce system, the concerned enterprise in order to
enhance the prospects of its business and also its profitability can develop a full-fledged e-
commerce system just like the enterprises Amazon, Aldi and others. On the other hand, the
enterprise under discussion here also has the opportunity to customise its online portal and
make it more user-friendly. Lastly, one of the major threats that the concerned enterprise
faces on the score of its e-retail services can be attributed to the threat that it is presently
facing from the other retail enterprise which are using the same system and also the difficulty
that it faces for the effective management of the same26.
Recommendations
 Tesco has the opportunity to remodel its entire business system and fully embrace the
e-commerce system or model in order to enhance its customer base, profitability and
others. This as a matter of fact finds evidence from the success attained by Amazon
over the years through the usage of this business model.
 Customisation of the online portal and also the improvement of the product or service
delivery system are two other options that the enterprise Tesco can use to improve the
e-commerce system that it is presently using.
Conclusion
To conclude, the e-commerce system had faced a substantial increase in its demand
by the customers over the years and this is one of the major reasons why the different
enterprises are increasingly trying to integrate this system within the business model used by
them. However, at the same time it needs to be said that for the effective integration of the e-
commerce system the business enterprises need to design effective online portals, product or
service delivery systems, payment options which the customers can easily use and others.
26 Theguardian.com. "E-Commerce | Technology | The Guardian". 2019.
https://www.theguardian.com/technology/efinance.

8E-COMMERCE SYSTEMS
These aspects of the e-commerce systems become apparent from the above analysis of the e-
commerce system used by the UK retail enterprise Tesco.

9E-COMMERCE SYSTEMS
References
Akter, Shahriar, and Samuel Fosso Wamba. "Big data analytics in E-commerce: a systematic
review and agenda for future research." Electronic Markets 26, no. 2 (2016): 173-194.
Butler, Sarah. "Tesco And Rivals Turn Against Hypermarkets As Internet Shopping Takes
Over". 2019. https://www.theguardian.com/business/2012/mar/04/online-shopping-changes-
hypermarket-strategy.
Ecommercenews.eu. "Tesco Launches One-Hour Delivery Service Tesco Now". 2019.
https://ecommercenews.eu/tesco-launches-one-hour-delivery-service-tesco-now/.
Falk, Martin, and Eva Hagsten. "E-commerce trends and impacts across
Europe." International Journal of Production Economics 170 (2015): 357-369.
Finch, Julia. "Tesco Leads The World Online Growth And Profit". 2019.
https://www.theguardian.com/technology/2000/jan/20/efinance.personalfinancenews.
Kasemsap, Kijpokin. "Implementing electronic commerce in global marketing."
In Encyclopedia of e-commerce development, implementation, and management, pp. 591-
602. IGI Global, 2016.
Kurnia, Sherah, Jyoti Choudrie, Rahim Md Mahbubur, and Basil Alzougool. "E-commerce
technology adoption: A Malaysian grocery SME retail sector study." Journal of Business
Research 68, no. 9 (2015): 1906-1918.
Lin, Yong, Jing Luo, Shuqin Cai, Shihua Ma, and Ke Rong. "Exploring the service quality in
the e-commerce context: a triadic view." Industrial Management & Data Systems 116, no. 3
(2016): 388-415.
Mena, Carlos, and Michael Bourlakis. "Retail logistics special issue." International Journal
of Physical Distribution & Logistics Management 46, no. 6/7 (2016).

10E-COMMERCE SYSTEMS
Pantano, Eleonora, Constantinos-Vasilios Priporas, Stefano Sorace, and Gianpaolo Iazzolino.
"Does innovation-orientation lead to retail industry growth? Empirical evidence from patent
analysis." Journal of Retailing and Consumer Services 34 (2017): 88-94.
Pantano, Eleonora, ed. Successful technological integration for competitive advantage in
retail settings. IGI Global, 2015.
Saleem, Hussain, M. Khawaja Shaiq Uddin, Syed Habib-ur-Rehman, Samina Saleem, and Ali
Muhammad Aslam. "Strategic Data Driven Approach to Improve Conversion Rates and Sales
Performance of E-Commerce Websites." International Journal of Scientific & Engineering
Research (IJSER) (2019).
Tesco.com. "Tesco - Supermarkets | Online Groceries, Clubcard & Recipes". 2019.
https://www.tesco.com/.
Theguardian.com. "E-Commerce | Technology | The Guardian". 2019.
https://www.theguardian.com/technology/efinance.
Vickers, Amy. "Tesco Stacks Up Online Sales". 2019.
https://www.theguardian.com/media/2001/apr/10/newmedia.marketingandpr\.
Yu, Ying, Xin Wang, Ray Y. Zhong, and George Q. Huang. "E-commerce logistics in supply
chain management: Practice perspective." Procedia Cirp 52 (2016): 179-185.