Innovation & timing – Tesco’s virtual stores

Tesco | Case studies | salesbeat | fmcg | cpg | retail

South Koreans are known to have the longest working hours in the world, with executives often too busy to go shopping for grocery at a traditional store.

Tesco, the UK giant, introduced “virtual stores” in response to this. These ‘stores’ are essentially a display of products on the walls of metro stations and bus stops. Commuters, especially those who are tech-savvy and time poor could scan the QR codes of products on display with their smartphones, and place orders while waiting for their trains or buses.

This initiative was so successful, they decided to launch this in the UK too.

Shopper in Korea buying groceries at Tesco’s virtual store

The UK launch

They decided to trial the first store at Gatwick. 

On 6 Aug, they launched UK first virtual store for passengers who were leaving on holidays holidays. This gave holiday makers leaving from Gatwick North terminal the opportunity to order milk, groceries and other essentials that they needed when they got back from holiday. No one likes coming back home to an empty fridge!

Shopper buying groceries at Gatwick North Terminal, departures

Passengers/shoppers were able to browse basic necessities ranging from milk and bread to toilet paper displayed on vending machine sized screens. Through the app, they could scan bar codes/QR codes underneath those products, buy the products and arrange for these to be delivered on their day of return. 

According to The Drum, Tesco’s internet retailing director Ken Towle, said that the virtual store “blends clicks and bricks” as it brings together the “love of browsing with the convenience of shopping online.”

Right product, Wrong time

While this was a great initiative that should have succeeded, Tesco were ahead of times with this launch. Especially for the UK market. While shoppers in Korea were all tech savvy and used to e-commerce, shoppers in the UK were more inclined to want to go to stores and shop in person. 

So the roll out of any further virtual stores were shelved, unfortunately! 

2020 lockdowns accelerated the adoption of e-commerce and technology (scan & go) in retail in the UK. Had Tesco launched their virtual stores now, they may have seen very different results. 

Author: Veena Giridhar Gopal

After more than 20 years working in the FMCG/retail sector, Veena is now co-founder & CEO of salesBeat. salesBeat has an AI driven platform that uses micro and macro factors to model consumer buying behaviour and makes predictive recommendations of optimal stock levels to FMCG sales people who sell into supermarkets, distributors & wholesalers, ensuring 100% availability of your brands in store and increasing revenues by up to 30%.

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