British supermarket chain Tesco will be investing 500 million pound in internet applications this year (600 million euro), an amount that could be tripled over the next three years. This way the company wants to survive the current changes in the world of retail.
Growth of 150% in online sales
“I said that in the future, we would not simply grow by buying more real estate, but instead change the way we engage with our customers and embrace digital retailing”, said CEO Philip Clarke at a retail congress in Singapore. This is already evident in the sales of music and films: the past year physical sales of that segment dropped by a quarter, while digital orders rose by 150%.
According to Clarke, Tesco has to become more than a retail company to stay competitive: “We have to become a technology company too. We all need to be quicker, smarter, more fluid and more interactive. We need to change the landscape, not just adapt to it.”
Clarke wants to see more ‘glocalisation’: global innovations with local applications. “The winners of the future will be those companies which can take ideas from all parts of the planet and apply them in different ways and to different places.”
In this respect Tesco wants to expand its online shopping service in Asia, where the company has physical stores in China, Thailand, Malaysia and South Korea. Clare also announced Tesco currently handles more than 500,000 digital shopping lists per week.
One of the ways Clare wants to commit his customers to Tesco, is the free internet television service for the sixteen million holders of a loyalty card. For this the company uses Blinkbox, a digital platform where consumers can download films and television series that Tesco bought in 2011. Soon e-books will be added to the products on offer as well.