UKNM: Tesco (was Toys R Us!)

[info]

The whole new media thing is an opportunity, but only if you can 

realise it.  Now, I am not being pessimistic here, just realistic.


I think the Tesco example below is interesting...in summary  

everyone shops online, the bricks and mortar buildings are used for 

something else, and supermarkets make a killing because of the 

reduced overheads.


This is fine once the transition has happened, but hey, how many 

businesses are going to be able to afford the servicing of more and 

more channels and existing ones too.


Take Banking for example (boy do those guys get some stick!).  

Firstly they have a large network of typically 2-3,000 branches.  

Then their customers want Phone Banking, then PC Banking 

(cause the net isn't secure) then they want Internet Banking (cause 

the net is secure).  Then the customer wants to see their balance 

and do flash things on a mobile phone, digital TV and so it 

continues.  In the mean time, the banks get a slating as the small 

local branches are closed down, and non net savvy start using the 

Post Office!


So, loads of channels at extra expense.  Which do you choose to 

service? Okay, database technology should make the servicing of 

many platforms easy, but who's really got to grips with that yet and 

each one is still more expense.  And as for the customer 

expectation, they want all the extra ones for nothing - and the 

earlier ones too.


So yup, pricing models will have to change.  If it is cheaper to 

service the customer it should be cheaper for the customer.  So 

suddenly the Internet supermarket does not make such a rich 

killing for Sainsburys, Tesco etc.


This therefore supports the model of jumping existing infrastructure 

and creating a new Internet Supermarket (i.e. the Amazon type 

model) without any physical branches as a separate new business.


Okay the vision will happen.  Point here is that there will be pile 

ups on the Motorway way before the junction where it joins into the 

Information Superhighway.  regardless of this, I for one am enjoying 

the road race!

Pete

www.QiQ.co.uk


P.S.  It is interesting that the banks charge for PC & Internet 

banking that are supposedly cheaper to service, yet Phone and 

Branch banking is free - at least for a personal account!


    -----Original Message-----

From:Andrews, Stephen 

    [SMTP:

Stephen [dot] Andrewsplc [dot] cwplc [dot] com

]

Sent:28 January 1999 09:35

To:

'uk-netmarketingchinwag [dot] com

'

Subject:RE: UKNM: Toys R US - site, outdated - who does it???

    

    Don't the big retailers need someone to tell them that this 

    whole thing

    is an opportunity rather than a threat (isn't that the new media

    marketeer's message?).

    

    Hypothetically, take Tesco : they move from selling everything 

    off the

    shop floor to selling 70%+ online and then distributing it 

    themselves to

    the consumer or have the consumer "drive-thru" and collect 

    (impulse buys

    and petrol etc still possible).  Suddenly they can put their "brix 

    &

    mortar" to a different use - they utilise what is already a 

    mammoth,

    organised, efficient distribution mechanism for shifting other 

    people's

    stuff.  Overnight (well in conventional re-engineering terms 

    anyway),

    they have moved from retailer to logistics company, have 

    somewhere

    approaching the same level of sales, less cash tied up in large 

    stores

    stocked to the gunnels, lower cost of sale, still get the hugely

    profitable petrol and impulse sales happening, forge closer

    relationships with their customers (if delivery to my home 

    works once,

    why would I then change), compile a bigger/better consumer 

    database for

    other ancillary marketing activities, and still utilise their 

    investment

    in transport/storage/warehousing to a truly profitable end.

    

    Pie in the sky? Maybe but not really beyond the wit of anyone 

    who lets

    the imagination run a bit and doesn't get freaked by the idea 

    that this

    thing is a threat to conventional business/retailing.  Of course it 

    is -

    why should that be a negative?

    

    Spread the word!

    

    Steve Andrews

    Business Analyst

    Cable & Wireless PLC 

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