Tescos Virtual Store From South Korea
Tesco’s Virtual Store: From South Korea to the United Kingdom
Tesco introduced a virtual store concept in South Korea that has been successful. I would recommend that Tesco introduce a similar store concept to the United Kingdom.
There are similarities between the Seoul and London markets that give confidence that a similar store concept would be successful in London as well. Both cities are of a similar size, about 9 million people, with similar average incomes (Exhibit 5).
The virtual store model relies on good smartphone penetration to access Tesco’s products via QR code and a smartphone application. When the store was introduced in Seoul in 2011, smartphone penetration was 45%, and London surpassed this figure in 2014 at 50%. Smartphone penetration continues to grow in both cities (Exhibit 6).
Another key factor for the success of the virtual store concept is the delivery system. According to Tesco’s website, their grocery delivery service covers most residential areas in the U.K., so the delivery infrastructure already exists.
I recommend that Tesco’s virtual store’s role be more focused towards increasing Tesco’s share in online retailing. Tesco is already a well-known international brand with a large market share in the U.K. The focus should be more on the online store development considering there is a good potential growth in this area (as shown in exhibit 7). Online stores could also reach customers that traditional stores may not. The presence of virtual stores would also have a knock-on effect of general promotion of the Tesco brand and products, without being the focus.
Possible locations for the virtual stores could be Train Stations, Underground, and Airports.
I recommend train stations as the most promising locations in London for Tesco virtual stores. According to the 2010 National Travel Survey, 84% of the U.K’s 1.3 billion annual rail trips were on weekdays, with 51% of trips being for commuting. In addition, 59% of all rail
Tesco introduced a virtual store concept in South Korea that has been successful. I would recommend that Tesco introduce a similar store concept to the United Kingdom.
There are similarities between the Seoul and London markets that give confidence that a similar store concept would be successful in London as well. Both cities are of a similar size, about 9 million people, with similar average incomes (Exhibit 5).
The virtual store model relies on good smartphone penetration to access Tesco’s products via QR code and a smartphone application. When the store was introduced in Seoul in 2011, smartphone penetration was 45%, and London surpassed this figure in 2014 at 50%. Smartphone penetration continues to grow in both cities (Exhibit 6).
Another key factor for the success of the virtual store concept is the delivery system. According to Tesco’s website, their grocery delivery service covers most residential areas in the U.K., so the delivery infrastructure already exists.
I recommend that Tesco’s virtual store’s role be more focused towards increasing Tesco’s share in online retailing. Tesco is already a well-known international brand with a large market share in the U.K. The focus should be more on the online store development considering there is a good potential growth in this area (as shown in exhibit 7). Online stores could also reach customers that traditional stores may not. The presence of virtual stores would also have a knock-on effect of general promotion of the Tesco brand and products, without being the focus.
Possible locations for the virtual stores could be Train Stations, Underground, and Airports.
I recommend train stations as the most promising locations in London for Tesco virtual stores. According to the 2010 National Travel Survey, 84% of the U.K’s 1.3 billion annual rail trips were on weekdays, with 51% of trips being for commuting. In addition, 59% of all rail