This paper is on the Interactive and Digital marketing strategies of Tesco and Amazon.com. The first section of this paper will analyze the websites of Tesco and Amazon.com on the basis of information availability, navigation, surprising facts and information and flaws of the site. The second section of this paper will analyze the difference between retailers that have websites and brick-and-mortar stores (TESCO) and retailers that have sold directly through the website (Amzon.com) and if Tesco encourages their customers to visit their physical shop or remain online shoppers. The third section discusses how both these stores communicate their personality and image to the customers, similarities and differences between their communications, target market of both retailer and the type of communication used to communicate with their target market. The Final section of this paper is on the recommendations for TESCO and Amazon.com about improving their website.
Interactive and Digital Marketing
In 1919, Tesco was founded by Jack Cohen in London after he sold surplus groceries and made a profit of £1. The Tesco brand continued to rise during the 1930s as Mr. Cohen built the warehouse and headquarters in North London and by 1932 Tesco was a privately limited company. Over the years, Tesco has tightened its grip on the United Kingdom market by opening more stores. They have applied aggressive marketing strategies to become the leading grocer in United Kingdom. Tesco.com was launched in 2000 and it continued to increase their range of products from grocery to electrical, clothes and personal finance products. By 2008, Tesco had taken their conquest of United Kingdom grocery market to the optimum level by acquiring rival stores from Somerfield in the Scottish remote island, giving Tesco presence in all but one postal code in the UK (Clark, 2008).
Amazon.com is well renowned Fortune 500 e-commerce giant based out of Seattle, WA. They were one of the pioneer firms that sold products online. It was founded in 1994 by its inspirational leader Jeff Bezos and eventually it was launched in 1995. They started an online bookstore but eventually diversified with the e-commerce boom and have successfully added music CDs, software, electronics, MP3s, video games, VHS tapes and DVDs, clothing, furniture, food items and toys among many others (Pires, Stanton & Rita, 2006). In 1999, Jeff Bezos was named Time Magazine – Person of the Year recognizing his role in popularity of online shopping (Stone, 2011).
Question 1. Describe each retailer’s website. What information is available on each site? How easy was each to navigate? What information did you find interesting and useful on each site? What did you find that you didn’t expect to find at a retailer site? What did you find lacking at each site?
Answer: Tesco is known universally as the leading food retailer in United Kingdom. After building their position as one of the most profitable and largest grocery retailer globally, their online store Tesco.com has become a success story of its own. Tesco.com has a store locator that gives customers to search the nearest Tesco store. Since, everyone is comfortable buying online, this option to locate the nearest store gives the customers to choose the way they wish to shop. There is useful information on opening time, available facilities, product ranges and directions. Tesco.com is easy to navigate and scan, though sometimes a lot of information can be crammed at one page. Since, there are so many elements in a single page, it is very hard to focus and time consuming to find some important information. Tesco.com sign-out facility is impressive, as the customer is given the option to remember their details the next time they visit. This is a great way to encourage the customers to come back and feel free to access their account without any glitch.
Since the site is cluttered, it makes it difficult for the visitors to separate the visual content and the information, they need. New customers might not like this and find it intimidating enough to deter from purchase. The checkout pages need a lot of scrolling, due to the several visual distractions that shoppers have to face. This leads to online shoppers having plenty to time and opportunity to exit the order finalization, when they should be filling the payment details and shipping address. Another feature that seems frustrating is when a customer clicks on the back button, their shopping information gets auto deleted. This can frustrate any customer as; they would require performing the whole adding products exercise over and over again. Tesco.com has diversified and added many new categories to their portfolio. Every time you visit the site after a gap of few months’ customers can purchase something new and different.
Amazon.com is a great marketplace where customers can find anything they need as the site has 34 product categories to offer ranging from antique furniture to movies to clothes. The site offers its customers a great opportunity to buy the products and used items at discounted rates. Getting products listed and setting price on the items at Amazon.com is simple. Within a matter of few minutes the product gets listed and available for sale to customers. Purchase of used products can be done with ease as the user interface, layout, design and graphics make it a cakewalk to perform a transaction and Amazon.com themselves promote the used products available on their site. Amazon search is also a bonus for the customers as customer need to describe the product they need to buy and Amazon.com lists the rates of new pieces along with the cheapest used versions of the same. A single click can take customers to the product they need and also the other options available to them in the same category. Customers are given full information about the product they are buying and availability of free shipping and return policy. This allows customers good knowledge about the product they wish to buy and the return policy in case they are left unsatisfied with the product they order. Amazon.com uses the cookies to keep the user logged in, and their shopping habits are tracked across the store. This enhancement helps customers to view the product they last viewed and the products they might like every time they visit Amazon.com. This customization of user experience on the basis of page views, prior searches, written reviews and purchases help the user get what they want at Amazon.com. Amazon.com is customers-focused and convenient website that everyone can enjoy for browsing and purchasing their favourite products (Webdesignerdepot, 2009).
Question 2. What differences are there for sites that have traditional bricks-and-mortar shops from those that do not? Does the site encourage consumers to visit the physical shop or just to remain an online shopper?
Answer: With the obvious criteria of reachability, Brick and Click have access to potentially more customers in comparison a Pure play (Amazon.com), there are many other differences between them. Apart from the online promotion strategies, the main difference is that the Pure Play retailers (Amazon.com) are much more successful in use of search engines as their promotional tool. Brick and Click (Tesco.com) are more successful in using traditional promotional tools like brochures, trade shows, direct mails and print media than Pure Play. The brick and click firms believe that they are more successful in use of promotion and advertising strategies for retaining customer base and brand building. Brick and Click firms seem to be more successful in use of advertising for the purpose of brand name recognition than Pure Play.
Another criteria for difference, since the brick and click can reach possibly higher number of customers it is obvious to expect that their profit expectation is higher in comparison to the Pure play firms. This is due to the sustainable competitive advantage, differentiated products, competitive barriers, increased cash flow and added value from the brand equity. In contrast to this, the pure play firms enjoy the possibility of international growth in comparison to the brick and mortar stores. Opening a website is easier in comparison to setting up a physical outlet in a foreign nation. These ventures can use the international growth strategy and locate new markets and opportunities. In terms of international revenue, pure plays have greater percentage increase. Also, the international growth is affected positively by the use of internet for products and services distribution. Pure play firms that sell digital products in the foreign markets are more successful than the Brick and Click firms, due to the relative ease in overcoming the logistical problems for exporting when the product can be distributed electronically (Rasheed & Geiger, 2000, p. 18-22).
The website’s store locator tool is specially built for the customers who are not keen to shop online and prefer to go the store and shop. The customers can also find the nearby stores on the basis of postcodes they can generate a list of nearest stores. With the information on opening time, available facilities, product ranges and directions, Tesco offers their customers the encouragement to visit their physical stores.
Question 3. How do the retailers’ communicate the image or personality of their shops? How are they alike? How are they different? If you had no information except that available on the web, would know what types of product are sold, whether the products sold are expensive, prestige products or low-priced products; and what types of consumers each retailer is attempting to attract to its shops? How do they communicate the type of consumer they consider primary market?
Answer: Out of concern, that their competitors might copy and use their marketing techniques, Tesco has refrained from divulging their strategies and techniques. However, it is obvious to see how Tesco targets its customers and attracts them to their stores and online site. Tesco has been known to engage directly with their customers by communicating through e-mailers and subscribed posts, maintaining a constant linkage between their customers to build loyalty through their Clubcard scheme, to make their store more appealing to a wider demographic to have something for all sorts of customers and continuously proving that they are best in quality and value that helps them in beating their competition. For long, it is believed that Tesco Clubcard is their crown jewel that is promoted in their marketing campaigns. This card offers loyalty rewards in the form of points that customers can use as currency for all their future Tesco purchases. This creates the friendly image in the minds of customers and makes them stay with Tesco for long term, as their shopping rewards the customers with points that eventually save them their hard earned money. There are others customer-friendly schemes that attract customers to Tesco, but Tesco Clubcard helps the company in making long term relationship with customers. Tesco’s way of communicating with their customers is based on building strong customer base and loyalty, as customer returns helps them develop repeat business and maintain their profitable business model.
Amazon.com is known to be the online retailer of anything that a customer’s needs. They also are the most trusted brand and in every other trust value. Brad VanAuken the chief brand strategist at The Blake Project consultancy has mentioned that Amazon's exceptional product accessibility, customer experience and functionality converge to form a strong brand that consumers love to trust. He said, “With millions of products, 24/7 access, superior search and browse technology, user reviews and many other sources of in-depth product information, Amazon.com offers a superior purchase experience” (Andruss, 2012). He also added that brands with free shipping on a minimum total and low prices seem to add value to the price customers pay while they save time on ordering after a few clicks at the comfort of their homes. Many customers also rely on Amazon.com for all their product needs, thank to their strong relationship with selling channels as the Partner court merchandise. With such a large array of offers can be perceived as impersonal, Amazon has done an exemplary job to foster relationships with their customers by helping them to make choices on the basis of recommendations from past purchases, rating and user reviews. Customers have the option to create their own profile on the site that includes sharing ratings, wish lists, user profiles and reviews (Andruss, 2012; Ozuem, Howell & Lancaster, 2008).
Tesco over the past few years has developed a major advantage through its ability to take risks and try new things without the fear of failing. This can be demonstrated with the udl tablet that was launched in 2013. With this Tesco, became the first retailer that positioned themselves as a digital media firm. With their own brand hardware at the centre of self-created ecosystem, the only other firms to take this same route have been Amazon and Apple. Though Tesco’s wide product range, stores and loyalty data, the potential scope is much greater in comparison (Thomson, 2013). With time, E-Commerce giant Amazon.com has started to move into online retail of groceries, while Tesco has invested n the Malaysian digital market. This is because the line or gap between online and offline retail is fast evaporating. This makes it important for an online retailer like Amazon.com to widen their horizon or get left behind the Brick-Click stores like Tesco (Gill, 2013).
Tesco has made its name by offering customers with quality products at lower rates, placing the locals first has been one of their prominent reasons for success. The target market of Tesco is categorized into specific segments that help them in targeting their diverse clientele. The core business activity for Tesco is grocery sales. Two things that can be done for inflating a business like Tesco are: Choosing to diversify the core business activity or start to specialize in what they believe they are best. Tesco chose the earlier and has a well developed market base to cash on. Fresh produce and groceries are the need of every home, and marketers have always been will remain as a huge part of independent societies. Like many other businesses, Tesco has always tried to expand their business for keeping up with the competition. Thus, Tesco keeps investing in new products and services for meeting the diverse needs of customers.
Amazon’s marketing engine is powerful in their ability for sorting, segmenting and targeting customers in such a manner that other marketers also use it to categorize their customers. The segmentation at Amazon.com is based on the purchase behaviour, browsing history and cookies that are placed for every customer that visits Amazon.com. This segmentation is dependent on the actions that the customer performs after they visit Amazon.com. Segmentation of customers at Amazon.com is the foundation on which the site decides to target their products to customers from different economical backgrounds (MacLeod, 2006).
Question 4. What recommendations would you make to each retailer to improve its website?
Answer: There are some improvement needed at Tesco.com, some of them are:
Firstly, provide more sorting/filtering options as the website has a large product range, it is important to have means to narrow or sort the choices that prevent customers to trawl through the site pages and results (Wallop, 2012).
Secondly, The Non-Descriptive URLs that Tesco uses similar to the large product ranges applies dynamic databases that produce long, ugly URLs that have no direct connection with the product page (Wallop, 2012).
Thirdly, delivery charges on the product page are a frustrating aspect of shopping online. It should be provided at the product page to ensure that the customer knows how much they need to pay for the product (Wallop, 2012).
Fourthly, register before shopping is a requirement at Tesco. In the case, the customer is unwilling to give their information and get the option to checkout as a guest, it can develop better relation and possibility of repeat purchase (Wallop, 2012).
Finally, better product images are needed by customers that are buying costly product as a customer will be viewing the product from multiple angles (Wallop, 2012).
Just like Tesco, a pure play like Amazon.com also needs some modifications to make it user friendly, these are:
Firstly, Do not let people review the product too early as some customers even review the products that are not even out yet, they have no experience of use, and they only review as they are brand loyal. This creates a flurry of worthless reviews that are not good for anyone (Kelsey, 2013).
Secondly, add filtering options as its helps customers to decide what customers want to check-out for purchase. This feature is advantageous for a site like Amazon.com that has a large variety of product and a new user might not be able to locate the product they need to purchase (Kelsey, 2013).
Thirdly, cleaning up of reviews is necessary as they misguide some customers to buy products that they do not need. Amazon.com is a brand name that customers rely on while checking out the product reviews. This trustworthiness will develop long term customer relationship (Kelsey, 2013).
Finally, remove clutter from the product pages as the length of most pages is comparatively long that makes customers scroll longer. This distracts some of the customers from making a purchase from Amazon.com (Kelsey, 2013).
Pure play firms like Amazon.com use internet as their market entry, whereas Brick and Click firms like Tesco use it as an alternate mode of distribution. Many theoretical frameworks are applied for exploring performance and strategic differences between both business models. Additionally, Brick and Click have higher profit margins as the use Internet as sales channel has a negative effect on the profit expectations. To conclude, both Tesco and Amazon have shown that their business models and marketing strategies work. Both are highly successful at what they do and both have successful interactive and digital marketing strategies that will help them grow and survive for many years to come.
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