In 2013, Tesco was rated the worst supermarket in the UK. Since then the grocery chain has been investing in repairing its tarnished reputation.
Tesco is one of largest super markets in the UK, but as grand as its presence, as battered is its reputation. In 2013, Tesco was voted as the worst UK supermarket, among the nine major supermarkets in the country according to a poll carried out in October 2012. Since the infamous survey, Tesco has been working tirelessly to improve customer satisfaction. What went wrong and what has the supermarket chain done to improve its customer experience?
The worst supermarket in the UK
In October 2014, a survey conducted by advisory firm Lazarus found that Tesco’s brand suffered greatly after the accounting scandal that revealed a profit deficit of £250 million. Researcher at Lazarus, Mike Tattersall, commented the results gave a sobering insight into a fallen brand that was once highly regarded among consumers. Tesco enjoyed high clientele mainly thanks to its omnipresence, Tattersall added, now opening the doors for discounters such as Aldi or Lidl.
In March 2017, Tesco was fined £129 million by the Serious Fraud Office and Financial Conduct Authority after the 2014 accounting scandal. On top of the fine, the supermarket chain would pay £85 million as compensation for investors who were affected by the overstated profits and the associated legal costs. The total settlement reached an upward of £235 million, nearly the entire gap in its profit reports.
Chief executive of Tesco, Dave Lewis, apologized for the company’s wrongdoings, which have become a source of great regret for all those affected. However, the company had made a turnaround, stating Tesco wasn’t the same as before. The team at Tesco remained committed to restore the trust of its customers, he added. Since then, the company has been on a mission to improve customer satisfaction.
Customer satisfaction at Tesco improves
In January 2017, Tesco was on the right track to improve customer satisfaction, The Grocer reported, citing a recent survey conducted by the UK Customer Satisfaction Index (UKCSI). The supermarket scored 80.1 points out of 100, an improvement of 1.2 points according to the last survey, the news outlet noted. While Tesco scored the food sector’s average of 81.3, with M&S claiming the top position, the supermarket had made significant improvements since 2013.
Tesco saw its ratings improve across multiple fronts, having streamlined its complaint handling significantly, with staff receiving an 85 percent rating for solving issues the first time around. This translated into a higher rating for trustworthiness, which increased from a 7.5 in 2016 to 7.7 out of 10 in 2017. Especially staff’s expertise and friendliness saw major improvements, jumping from 5.8 to a 6.6 over the same period.
Improving across the board, showed that Tesco customers were more likely to return to the supermarket, giving an 8.5 out of 10 as for the likelihood to return for another purchase. CEO of the Institute of Customer Service, Jo Causon, commented on Tesco’s results, noting that the supermarket had suffered major reputational damage after the accounting scandal in 2014, leading to customers losing faith in the brand. The tides finally seemed to turn for the troubled supermarket, thanks to a sharp focus on customer centricity, she added.
The same month, in January 2017, Tesco announced it had appointed Unilever executive, Alessandra Bellini, as the new chief of customer service. Bellini had over two decades of experience in the food category, surveying as general manager for Unilever’s North America and US operations and executive positions for Italy and Eastern Europe. Her appointment marked a tipping point for the company, which started a steady course to recover its tarnished reputation.
Internal support channels
In order to streamline its customer satisfaction, through providing quick and adequate support to colleagues, Tesco selected Zendesk to handle this complex task. Since the roll-out of the system in 2015, Tesco has made great progress in enabling its 330,000 employees across 4,000 retail locations to provide reliable support and help them during their daily tasks. Tesco has been using Zendesk’s full product suite to build robust support infrastructure.
During the initial ramp-up, Tesco wanted to utilize Zendesk Support to “efficiently manage internal technologies queries”, meaning opening up new communication channels for colleagues to reach Tesco’s helpdesk, which had previously been restricted to phone calls online. By allowing additional pathways to reach the central helpdesk, enabling the separation of incoming requests in three distincts channels, namely, Cybersecurity Operations, People Services and Technology. Two additional support channels have been added as years progressed.
In 2016, Tesco launched its first help center, serving as a self-service hub for employees. By expanding this knowledge hub, the amount of incoming support requests was reduced significantly, Zendesk noted. By the end of 2023, the internal help center saw five million visitors annually, clocking 380,000 hours of content viewed. The portal was of tremendous value to internal operations.
Head of Product for Service Desk, Help & Automation at Tesco, Adam Bruce, said the help center provides easy access to essential information, with help articles being highly relevant and of high quality, allowing employees to quickly find answers to incoming questions and issues. The self-service percentage increased from 30 to 73 percent over a period of three years, he added.
Since its implementation, the Tesco team has been expanding Zendesk’s solution to add new functionalities and speed up ticket resolution. The service solution handles 200,000 incoming tickets per month, of which 50 percent are API-raised, Bruce noted. These requests come from third party tools or other monitoring systems. Incoming requests are handled by an upward of 6,500 agents, excluding light agents, who can deliver quick support to their employees.
Setting up the support system through Zendesk has had a tremendously positive impact on employee satisfaction. Tesco notes that 94 percent of employees know where to look for help, with 79 percent stating they can find the answer they are looking for and when questions are raised 76 percent says they receive a response in a timely manner. Over the years, positivity ratings have improved, coming from 68 percent, growing to 83 percent, Bruce highlighted.
A better shopping experience
Tesco has been improving its shopping experience. Apart from enabling employees to resolve customer issues and maintain smooth operations at their stores, retail outlets have seen upgrades to deliver a better, more accessible shopping experience for customers. Changes were made across many areas of the business, from simplifying operations, introducing pay increases and improving the shopping experience for customers with disabilities.
Operational improvements were announced in January 2018, where the company revealed it would revamp operational structures. Management at Tesco wanted to improve efficiency and add clearer accountability to line managers over colleagues and the customer experience. Larger outlets and fulfillment centers in the UK would see positions removed, seeing the People Manager and Compliance Manager role discontinued. The hole of Customer Experience Manager would also be removed, moving the responsibility to the line managers.
The operational changes would impact 1,700 employees across many of its stores. Tesco UK and ROI CEO, Matt Davies, said in the press release that removing these roles would deliver a simpler and more helpful experience to customers and employees. Davies acknowledged the changes, while difficult, were necessary to set up the company for the future in an ever more competitive environment.
In April 2019, Tesco expanded its Changing Places facilities with 35 additional locations for customers with disabilities. The toilet facilities help customers with complex medical needs to be able to safely, and comfortable, shop at Tesco retail locations. The toilets are specifically designed to meet the needs of disabled customers, who are dependent on wheelchairs and hubby’s. Regular toilets can be claustrophobic and hard to navigate for certain Tesco customers. By providing safe toilet options, customers can now focus on their groceries instead of worrying whether a suitable toilet is nearby.
Tesco employees saw a 10.45 percent pay increase over two years, starting in September 2019, with hourly wages increasing by 6.9 percent, coming from £8.42 to £9.00. In October 2020, another 3.3 percent would be added, lifting the wage to £9.30. The pay deal was completed in cooperation with Usdaw and elected colleague representatives, the supermarket noted. While this might directly impact customer satisfaction, allowing employees to receive fair payment for their services, ultimately benefits operations as a whole.
In August 2019, Tesco announced operational improvements for its 153 Tesco Metro stores, aiming to improve daily processes and reduce administrative tasks. The supermarket commented that it wanted to better align store operations with customer’s needs, seeing customers opting for daily shopping, rather than weekly shopping. Tesco said it would reduce the amount of goods stored in the backrooms, placing them straight to the shopping floor and give greater flexibility to colleagues to move around the store.
In December 2019, Tesco expanded on its commitment to improve the shopping experience for customers with disabilities by rolling out sunflower lanyards across all its retail locations. The sunflower lanyard, a key-cord worn by customers, acts as a subtle indication for a hidden disability and signals to staff that a shopper might be in need of additional assistance. The addition of the sunflower lanyard acts as an extension of its disabilities program, which would see an expansion of 27 additional Changing Places facilities over the course of 2020.
Improving Tesco’s digital infrastructure
The retail operations extend into the digital space, where grocery shopping is moving further into the online realm. In order to keep up with growing demand for online grocery shopping and deliver a better online customer experience, the supermarket chain has been expanding its digital capabilities.These improvements made across its supplier network, its logistical operations and customer feedback monitoring.
In January 2015 ,Tesco announced the launch of its new online supplier community. The interactive platform would enhance collaboration between suppliers around the world. Through the platform, the over 5,000 suppliers could exchange learnings related to food waste, innovation and energy. While Tesco’s information regarding the product remained fairly sparse, it was aiming to improve its supplier capabilities.
In March 2018, Tesco hired Guus Dekkers as the Chief Technology Officer, succeeding Edmond Mesrobian, who entered retirement.Tesco would enjoy Dekkers extensive expertise in the digital field, having led large technology transformations at Volkswagen, Siemens, Continental and serving as Chief Information Officer at Airbus. Tesco Group CEO, Dave Lewis, commented in the press release the Dekkers would bring strong expertise in managing large scale IT transformations, which will become crucial to continue the digital strategy set out at Tesco in the last three years.
Together with retail consulting firm Weigandt Consulting, Tesco explored new software solutions to improve its order tracking and customer feedback system, the latter crucial to measure the brand’s performance amongst customers. The need to optimize its online and pre-order operations came when Tesco was unable to manually track the increasing volume of incoming orders. This led to costly mistakes, in turn decreasing customer satisfaction.
Weigandt developed a real-time order tracking and management system based on microservices together with the Tesco development team. The data is moved in real time across the different services, providing continuous order status and payment details. Through customer feedback collection, the team can improve the systems across the entire value chain.
Senior Software Development Manager at Tesco, Sudheer Allampati, praised the solutions provided by the Weigandt team. During seasonal peaks, the order tracking system can manage 5,000 incoming messages per second, managing 2,000 incoming messages on an average day. The system served a crucial part of Tesco’s digital transforming, which is expanding into reactive programming, allowing for agile workflows.
Seamless shopping experience
In October 2021, Tesco opened its first checkout-free store, GetGo, serving a trial to explore a seamless shopping experience. The opening of its flagship store was a testament to the company’s digital advances. The GetGo store is a continuation of a trial program launched at colleague store Welwyn Garden City, who had been experimenting with seamless checkout technologies since 2019.
Managing Director for Tesco Convenience, Kevin Tindall, said in the press release the team was constantly looking for novel ways to improve the shopping experience for its customers. Seamless-checkout was the latest iteration to help shoppers save time. The team at Tesco was looking forward to seeing the customer’s response. The check-out free shop would be accessible to customers with the dedicated Tesco.com mobile app, who will be able to check in and out of the store.
The collected groceries will be added to the digital shopping cart through weight-sensors and cameras, tracking what products have been placed into the basket. Once the customer leaves the stores, the goods are automatically deducted from the respective bank account. The technology is supported by Trigo, with stores operating between 7 am and 11 pm. The roll-out wasn’t without its difficulties. While Tesco prided itself with the technical hoops it had to go through to make the concept work, shoppers had less than stellar experiences.
Senior video presenter & producer at Which, Harry Kind, tested the novel shopping experience that had to mimic Amazon’s Fresh convenience stores, discovering that there was still much to be improved. The issues started when trying to sign-up for the Tesco app, which was cumbersome, Kind noted. This was immediately the product’s Achilles heel, the mandatory sign-up, leaving those who want to pay with cash or card behind. Prices at the GetGo location were comparable to a London Tesco Express.
Rebuilding Tesco
In June 2018, MarketingWeek spoke with Alessandra Bellini, now a little over one year into her new role, and her mission to bring Tesco back on track to become the strong brand it once was. Bellini’s had a clear vision for the supermarket, making it warmer and more loved by its customers once more. She joined during a turbulent time, as Tesco was caught in the middle of its PR-fall out. Bellini stood in the middle of the changes that were rolled out since her appointment, with her vision being foundational to recovering the brand’s reputation.
Tesco’s reputation had crumbled on the YouGov BrandIndex ranking. Since the accounting scandal in 2014, the supermarket has been on a road to recovery. However, the challenge ahead remained great, Bellini explained. Consumers are becoming more savvy, better informed and are met with countless alternatives. The supermarket had to do more than just introduce a new paint job. Tesco had to rebuild its brand to earn back the trust of its customers. A brand deserving of trust. Bellini noted the company had made great progress over three years prior to the interview, but the team was aware that the road ahead was a long one.
In order to drive the message home, Tesco planned to revamp its marketing strategy, which put the customer front and center once again. Through this strategic realignment, she hoped this would translate into higher quality and improve the value perception of Tesco’s products. Improving facilities for disabled customers and rolling out educational programs, allowed the supermarket to reinforce its commitment to reshaping its strategy. However, Bellini said the team would have to bridge the gap and go beyond advertising to change the perception of the brand.
MarketingWeek referenced Tesco’s ‘Food Love Stories’ campaign, which was launched minutes ahead of Bellini’s appointment, serving as the first effort in reframing the supermarket’s tainted image. Bellini described the campaign as humble, aimed to get consumers talking about the brand once more in a different, more positive light. Tesco also upgraded the looks for its ‘Everyday Value’ products, which felt outdated and cheap. Consumers distrusted the product line.
The affordable product range got a make-over to better align with discount competitors Aldi and Lidl. Bellini denied the changes were made to create a competing product, noting that the product range exists for customers who are looking for great deals. The rivalry between Tesco and discounter Aldi became glaringly clear when in March 2020, the supermarket chain announced a new campaign that would match hundreds of products with Aldi’s pricing. Bellini’s role, which centered around customer service, extended beyond her job description.
MarketingWeek notes she is in talks with advertising platforms Google and Meta (previously Facebook) to ensure its content isn’t displayed alongside extreme, policy violating content. The company is now carefully monitoring its brand perception to break the negative spiral it had found itself in. She works in tandem with the supermarket’s main agency, BBH and Mediacom, to ensure its brand values are safeguarded and properly conveyed to its target audiences. Bellini explained that retailers are closely tied to their agencies, with relationships that go beyond briefings.
Bellini believed that with the right approach, the brand will be able to convince customers to give the supermarket a second chance. If Tesco remained humble, showing it had changed its ways, she was convinced the company can make a strong comeback. Marketing communications can only do so much however. Behind the scenes Tesco had been rolling out innovative technologies and optimizing its daily operations to smoothen logistical operations to not only achieve efficiency gains, but also improve the customer experience and employee satisfaction.
Complex operations at Tesco
Rebuilding the trust of customers after a PR-disaster is no easy task. Tesco has long enjoyed steady revenue growth by expanding across the UK, becoming a familiar site across many municipalities. Its omnipresence was the primary driver that fueled its growth. But all came crumbling down after the 2014 accounting scandal, which put a massive dent in the company’s reputation and resulted in hefty compensation fees. This left the door wide open for outside competitors to grab market share, primarily discounters such as Lidl and Aldi were able to benefit from Tesco’s internal chaos.
The fallout at Tesco forced the grocery chain to rethink its ways. The company was confronted with bloated operations which distanced it from its customers. Customers who were dissatisfied with the in store experience and customer service. Tesco executives were forced to cut hundreds of jobs to streamline operations and bring back responsibility to its retail managers. Retail operators were now held accountable for customer satisfaction. No longer could the blame be shifted to middle management.
Tesco improved its technological capabilities through a strong internal support network that allowed easy access to crucial information, enabling employees to provide a better service to customers and resolve operational issues. Zendesk greatly improved employee satisfaction and reduced operational friction. During the Bellini-era, Tesco started to realign its strategic vision. Retail outlets were upgraded to meet customer needs, ranging from a speedier check-out process to a better shopping experience for customers with disabilities.
