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Industry sector: Retail, grocery
Service solution: Intelligent Queue Management
Project size: 1,000 stores
Tesco is a multinational grocery and general merchandise retailer. It is the UK’s largest grocery chain and the world’s second largest retailer measured by profits.
Tesco UK has a “One In Front” (OIF) service commitment to customers, which is advertised widely in-store and within the national media, stating if there is more than one customer in front in the checkout line, they will open another checkout until all checkouts are open.
Tesco monitored service delivery by asking cashiers – every 15 minutes through a POS system – how many customers were in their checkout line. This proved to be unreliable on a number of levels. While the system reported Tesco was meeting its 90% OIF target, customers said otherwise.
Tesco implemented the Automatic One In Front (AOIF) system in 2005 and 2006, using the Irisys Queue Management solution to replace the cashier input and provide an accurate, reliable measurement of in-store OIF performance. Tesco’s requirement was two-fold – both to improve customer service driven and to provide a marketplace differential that drove loyalty and attracted new customers.
Through its loyalty card data, Tesco monitored and measured an increase in frequency of shopper visit, basket size, and overall spend from loyal customers and those who previously had not carried out their main weekly shopping in Tesco. It also released some cashier hours overall, but chose to reuse those on other in-store activities, rather than realize a labor saving.
When asked by a UK financial analyst during Tesco’s second half 2006 results announcement which IT project had the biggest impact on earnings, Sir Terry Leahy, Tesco Chief Executive, stated: “The cameras were a key factor in the Company’s half year pre-tax profits rocketing 10% to £1,092 billion. We monitor and manage the service customers get more precisely – by customer, by store and by minute. Thanks to this, a quarter of a million customers every week don’t have to queue.”
Attila Winstanley, Productivity Director, has said: “Ensuring we offer the best service at the checkouts is one of our core disciplines, and it is also one of our biggest challenges. Historically we have manually captured data on queue lengths at the checkout, but accuracy levels were varied. The system accurately captures our OIF performance in real time, allowing Front End Checkout Managers to deliver better levels of service, while at the same time optimizing the deployment of checkout staff.”
Colin Cobain, IT Director, has said: “The project that has had the most impact on our customers is the implementation of detectors to monitor checkout queues.”