When business models collide

I have just come back from a very frustrating trip to our local branch of Tesco. Need to say right from the start I am not anti-Tesco, but the experience this morning is a warning to us all when  addressing the question, “am I adding a valuable feature to my current way of doing things or, am I adding a new business model on top of what I am currently doing (and am I going to annoy my existing customers?)?”

Supermarkets started life as self-service stores, but in recent times have added web-based ‘full service’ offers. I can now also have my Tesco shopping delivered, or I can go and collect it from a shed in the car park. This is fine if the picking of my shopping is done is a warehouse in Anywherebuthereshire as the business models of served and self-serve operate separately. However what seems to be happening is that supermarkets want to leverage their investment in the bright shiny shop and run both operations from the same  building.

The practical result of this approach was that I counted over 20 large trolleys of industrial construction (plastic pull out trays, etc) being pushed around an already crowded supermarket like a pod of castored whales hoovering up the shopping and generally getting in the way. The end result is that an already unpleasant customer experience turns into a truly nasty one as the self-serving customers are forced to have to join queues to get to things on shelves, endlessly back up my trolley (or is that me just being polite?) and generally wait much longer than needed. I don’t imagine that the generally grumpiness being directed at the Tesco team was fun, or particularly productive for them either.

The obvious answer to all of this is to use the internet service and not visit the shop. However as my wife rightly points out, we always spend less on the web than when I go as there is no opportunity for idle grazing and trying new things.

The lesson for Tesco (and other retailers who do the same thing) is make sure that you recognise when you have created another, and different, business model and understand where bits of those business models overlap and actively manage the contention that may ensue, or I will go elsewhere.


About iansthoughts

Chief Operating Officer at DEFRA, and former council Chief Executive. All views expressed are my own and not formal policy of my employers current or past.
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One Response to When business models collide

  1. Vamsi Pelluri says:

    It is a growing problem across the companies. I guess they will realise it only when their sales drop due to dissatisfied customers.

    Then the question is, do we have any real alternative to Tesco?


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