TESCO taps into the power of satellite broadband to create a state-of-the-art "Digital Retail Network."
TESCO, the UK's leading supermarket with over 1,000 stores nationwide and an additional 500 overseas, has seen an increase in market share through a customer-focused strategy that consistently delivers to customers across the UK better value for their money, together with wider choice and more convenience.
Innovation is an element of everyone’s job every day at TESCO. As part of this continuous effort, TESCO decided to evaluate options to further improve their customers’ shopping experience. With its Digital Retail Network, TESCO has been able to match a revenue-generating initiative with a solution that entertains and engages the customers and one which also assists and guides the customers’ point-of-sale decisions. With 13 million customer visits every week and an estimated 70% of buying decisions made at the point of sale, this innovative program creates a huge opportunity for TESCO to add value to their customers’ shopping experience.
TESCO announced in March 2004 plans to create an in-store TV network in 100 of its largest outlets by June, with a view to expand it to 300 stores by the end of 2004. TESCO TV, as the TV network is called, displays news and entertainment, as well as promotional information on both TESCO’s own products and suppliers’ branded products. The suppliers pay to promote their products on TESCO TV as with any advertising medium. Advertising revenues are covering the costs of the program. TESCO’s customers benefit from timely promotional information in addition to enjoying non-promotional content such as cooking instructions, cartoons and other "casual" content, including a news channel running every half hour.
"TESCO is always driving to maximize customer experience in the store," said Bill Pennell, TESCO Media and Revenue Generation Manager. "With this solution, we provide more information to our customers directly at the point of sales and can add real value to their shopping experience. For our suppliers this creates a genuine opportunity to better communicate with their and our end customers. HNSE has been selected by us because of their superior track record, their high-quality, end-to-end solution, and their very professional way of meeting our and our customers’ needs."
TESCO turns to broadband satellite solution
TESCO contracted with Hughes Network Systems Europe (HNSE) for a turnkey solution. In addition to providing the transport infrastructure through its HughesNet® two-way satellite broadband platform, HNSE has overall responsibility for the installation, operation, and maintenance of the entire implementation, inclusive of the screens. Instrumental Media Group (IMG) is responsible for the content that is shown on the screens. Another HNSE partner, Scala, provides the software platform for the content production, enabling the highest flexibility with powerful authoring, editing, and scripting tools. The combination of the Scala software and the HughesNet satellite platforms enables content to be changed and resent to all or a subgroup of stores within minutes.
Bob Clarke, founder and CEO of IMG, said "This implementation is the first of its kind of this scale. TESCO is making a move which will change the landscape of the retail industry. We are very pleased to have HNSE as a partner who, through its experience with similar implementations over several years, is helping us to shape the solution and continuously exceed customer expectations."
Targeted programming delivered to different areas of the stores
In each store where TESCO TV is available, HNSE is installing approximately 50 flat screens of different sizes. Up to eight different channels are available on TESCO TV, each channel specifically intended for a particular zone of the store. The screens in the Counters area, for instance, display different content from the screens in the Wines and Spirits area. The latest music videos are shown in the Home Entertainment department and Health & Beauty has its own channel, too. In the Cafe, customers can relax watching the latest news, sports clips, and other entertainment programs.
The content displayed in the different areas consists of large multimedia files. All files are simultaneously transferred to all locations with the HughesNet satellite service. Satellite-based multicast transmission is the quickest and most cost-effective way to deliver media-rich content to multiple locations simultaneously. The bi-directional nature of the Hughes satellite system makes it possible to verify in real time that each store has received the intended multimedia files. Remote control from a central location of which content is played on each screen, at each store, in each zone, is an absolute necessity. One reason is that advertisers are only obligated to pay for their advertisements if they are shown in the contracted zones and at the contracted times. Another reason is that all elements of the network need to be carefully designed and calibrated, even down to the sound level of the playback machine, in order to have maximum positive impact on customers.
In parallel to the large multimedia files, smaller files with the scripts and programming information are sent to all branches simultaneously or separately, depending on what is required. These scripts are available per channel and define which content is played on which screen at which time. Of course, it is possible to make real-time changes to the schedule enabling TESCO to react within minutes, if required.
For optimal in-store distribution of the screen content, a cabling infrastructure is used instead of wireless components to ensure there is no interference with other wireless devices and standards. High-resolution content is distributed to the screens using cost-effective video distribution equipment. The screens are shelf-mounted or hang from the ceiling. Fully mobile devices could be added, but TESCO decided against that because of the likelihood of having a negative effect on customer flow through the stores.
TESCO realized it was important to know how the customers would react to TESCO TV, and equally eager to gather the opinions of their staff. TESCO had to be assured that all stakeholders were comfortable with the overall initiative, happy with the size, position, and height of the screens, positively influenced by the displayed messages, and not irritated by the sound volumes. During a nine-month pilot phase, HNSE and TESCO carried out thousands of interviews and the data has been used to optimize the in-store layout of TESCO TV, as well as to determine the least intrusive and most engaging environmental conditions for staff and customers alike.
Increased sales, quicker time to market, and improved customer experience
TESCO has high expectations for TESCO TV. TESCO is able to influence sales through the delivery of advertising content on screens positioned at the point of sale. TESCO's trials measured an average increase in sales in excess of 10 percent among the 62 brands featured. TESCO TV has also vastly improved the ability to cross sell and promote other products within its portfolio.
Another important benefit is the improved time to market. Reacting to new trends or competitive offerings is now much faster and more comprehensive than ever. A promotion can be amended, re-distributed, and displayed in all stores within a few hours, thus enabling TESCO to respond to changes in the market in almost real time.
And lastly, according to customer surveys taken, the shopping experience has improved with the vast majority of customers seeing a benefit to receiving information while they are being entertained.
Leveraging the same platform, an e-Learning or back office solution could be added. Train your staff, communicate the corporate message of the day, brief your management team, manage your inventory, connect credit card clearance or an ATM network. Additional costs are minimal once a HughesNet satellite solution is in place.