Groceries 2.0

Whilst not a frequent user, I’m nonetheless pretty darn impressed by Tesco’s online grocery delivery service. Retailing an inventory of tens of thousands of items online is a complex endeavourer and they’ve done an outstanding job of providing a fairly painless user experience.

An e-commerce store faces several interesting challenges in comparison to its physical store counterpart. A store layout systematically guides the consumer, but online, they’re presented with a blank canvas. Tesco relieves this problem its Clubcard members, allowing them to view items recently purchased in-store so that they can quickly add the items they typically purchase. Moreover, repeat orders become increasingly more simple, with a generally improved familiarity with the site and the simplicity of adding your frequently purchased items.

This streamlined process increasing works against Tesco. The shopping experience is reduced to a 10-minute chore, and crucially the consumer is consequently less likely to be lured into making impulse purchases – the bread and butter of driving revenue for a supermarket. There is no snazzy point-of-sale displays and promotions. Eye-grabbing packaging looses it’s effectiveness. It’s now far easier to add previously purchases items than it is to experiment with something new. And the ease of scanning prices creates more rational decision making.

However, I propose that there is great potential for Tesco to capitalize on unique cross-selling opportunities that aren’t otherwise possible. In a traditional store, it’s necessary for items to be separated based on their category (fresh, frozen, dairy and so on), even if they’re complimentary. Online however, there is scope to use data and algorithms to drive cross-selling through recommending complimentary products.

In the hypothetical scenario shown below, I’ve added burgers and burger buns to my shopping basket. Using data-driven knowledge of items frequently purchased together, I’m now presented with a message suggesting that I might also be interested in purchasing some tomato ketchup or some onions. The user can easily ignore the message and proceed on, or they might just think “shucks, I am getting pretty low on ketchup, so I ought to get a bottle. Gee, thanks for reminding me Tesco”. Okay, I embellished it a little – but I’m sure that most users wouldn’t find this to be overly intrusive, but instead adding genuine value.

Tesco Cross Selling

(This is a mockup of how the UI might not, it’s not a screenshot of the current design).

The opportunities are endless: peppercorn sauce with your steak; Naan bred with your curry, and so on. The concept isn’t new and I dig up few related patents that are are rather interesting, such as “Collaborative recommendations using item-to-item similarity mappings”.

Tesco could take a leaf out of the book from the master of e-commerce; Amazon – and discover other ways to utilise transaction data to boost revenue. Possibilities include allowing users to provide product ratings and feedback, view popular items, and see other products purchased by other users with similar tastes.

Update: Since drafting this post, have updated their site; adding some additional functionality and improving the design. They’ve not added any of the features I describe, but they’ve done a great job at improving the usability by making it even more clear what steps the user needs to take.

 Tags: Business, Ideas, Internet   Published: 27th January '08

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