Tesco Plc is the largest grocery and general retail chain merchandising business in the United Kingdom with International priorities, which has more than 2,318 stores all over the world. Every year its profits rise about £2 billion, it employs more than 450,000 people worldwide across all of its business and became the fourth-largest retail business in 2008. It provides online services of financial, banking, and insurance services for capturing the market. Tesco Plc group expects a long-term benefit from the online business. A number of ways can achieve it. The potential benefits derived from the online business venture by Tesco PLC are as follows:
- Reduce delivery time: Tesco’s online service is designed in such a way that, when customers place an order, it channels to the closest outlet of the place of the customer. Thus, it requires not more than 25 minutes to deliver the products. It greatly reduces the time as well as costs of Tesco.
- Large order size: Through the internet, the order system is drastically changed. As a result, the company now can handle more orders than in previous times. Therefore, it increases the efficiency of the ordering system.
- High-profit margin: Tesco can gain a high-profit margin through the introduction of the online system. As the sales volume is gradually increasing, it creates the opportunity to increase the profit margin.
- Alternative product: Through online service, Tesco offer a great verity of product. When a customer places an order for specific goods, and if the product is not available, then it can offer the substitute product to the customer. The customer has the option to receive it or not. By this system, Tesco can increase its sales of substitute products.
- Reduce extra labour cost: Online stores of Tesco create the opportunity for the customer to choose their required product without visiting the store. As a result, the company needs a few numbers of staff for their physical outlet. As a result, it reduces the staffing cost.
- Save floor space: The online store saves physical space for the company. If all customers come to the physical outlet for buying, then the company requires a vast amount of floor space. It also incurs a large amount of investment. Therefore, the internet reduces the cost to a substantial amount.
- Advance Technology: Technologically, Tesco is very advanced. It is using online technology fully in its personal finance operation. Various types of Tesco services are available online, and many different types of technologies are using in every stage of service offerings. This is strength in a manner that this technological orientation can smooth and quick the service delivery and increase the service quality.
- Large storage of data: Through the internet, it can store a large sum of data on customer preference. As a result, it will facilitate to design of the product line according to the customer preference.
Finally, Mauch stated that its sales would increase because all in-store discounts, promotions, and special offers are available for online customers (such as buy one get one free offer), and after placing an order, customers can view it on websites, but customers would charge home delivery fees.