Tesco 2014 Annual Report Download - page 14

The key enablers
T
As a retailer, our business model is based on four core
activities. Using our unrivalled insight to understand what
customers want, we buy products and services from suppliers,
move them through our distribution network and sell them
to customers. Most importantly, our core purpose is at the
heart of these activities. It is by improving these activities
for customers each time they shop with us that we make
what matters better, together.
Across the Group, our customers visit us in store, online, or through a
combination of different formats and channels. They come to buy their
groceries, clothing, general merchandise and services such as telecoms,
digital entertainment and banking. We are focused on providing customers
with the most compelling offer and the best shopping trip. We work with our
suppliers to offer an excellent range of products and services. We move the
products through our modern and efficient supply chain into our well-located,
multi-format store network, ready for customers to shop with us 24 hours a day.
The core activities form a cycle. To keep customers coming back, we are
constantly strengthening our operation. This starts with insight. We listen
to customers in a number of ways, including through our monthly Customer
Viewpoint surveys in UK stores, in-depth focus groups with our Tesco Families
and dedicated Customer Question Time sessions. Combining this feedback
with our data, including the unique insight we gain from Clubcard, and acting
on it is crucial to our success.
Our seven key enablers are our business strengths. They help
us to sustain and improve our core activities. These elements
are what make us different and it’s because of these that we
are uniquely placed to win.
For example, establishing multichannel leadership and building a seamless
offer will enable customers to shop however, whenever and wherever they
want, which will mean that we stand out for customers.
Another example is leveraging our Group skill and scale, which is all about
sharing our experiences across our operations. We trial in one area of the
business and transfer the learnings to another, whether it’s sharing the
loyalty scheme blueprint internationally or building capital-efficient grocery
home shopping businesses in new markets. Being able to leverage our
Group skill and scale makes us unique and helps us to perform the core
activities even better.
The momentum of our business model comes from the virtuous
circle. By developing economies of scale and investing in an
ever-improving customer offer, we drive loyalty and grow sales.
Developing and using economies of scale across our business all over the
world, enables us to improve the customer offer by investing in areas such
as price, range, quality and service. This year, for example, we completed the
roll-out of grocery home shopping to all of our markets (except India). It is a
service we developed in the UK and have rolled out in a capital-efficient way
to our international businesses, with a great customer response.
Doing the right thing for customers is central to the business model. It’s why
one of our Values is ‘no-one tries harder for customers’; we know that if we do
the right thing for customers, they will reward us with their loyalty. The more
pleased customers are with the shopping trip, the more loyal they will be and
the more we will grow our sales. This combination of scale and growth is the
driving force of the business model.
38 million
Clubcard customers shopping in our 7,300 stores across
the Group give us unrivalled insight into consumer habits,
trends and preferences.
59.7%
of our UK customers shop across two or more channels,
including stores and online.
12 markets
with retail operations delivering 85 million customer
shopping trips each week.
Other information
Governance Financial statementsStrategic report
Tesco PLC Annual Report and Financial Statements 2014 11
Our core activities
The virtuous circle