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Tesco steps up its game in the changing technology market

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Tesco steps up its game in the changing technology market

Consumer electronics are 'increasingly big business' for UK's biggest retailer

Electronics and PC sales are rising up the agenda of the country’s biggest retailer Tesco, as it looks to be at the forefront of the 3D and tablet boom in the UK.

While the supermarket has been involved in tech hardware for some time now, it sees this new wave of products as increasingly relevant to the mass market, an area in which it dominates.

“It’s quite clear from the development on our electricals business and what we’ve done there, that we have been serious about this for quite some time,” said Rob Salter, Tesco’s category director for entertainment. “It’s increasingly big business for us. The market is moving at a pace now where the process of a technology going from a high price early adopter market to mass market is seriously narrowing and narrowing. You almost have to ignore that and think about mass market from day one.”

The company, whose 2,482 strong UK portfolio dwarfs rivals, claims it is picking up business from non-techy customers that are put off by specialist retail outlets.

“I think a lot of customers are possibly intimidated by some of those environments, and it’s absolutely on pitch for us to provide that service if customers feel that way,” added Salter.

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Last month, the firm announced the strategic alliance with SoftWide, which has given the retailer access to thousands of software titles. Currently it is only an online initiative, but the firm hasn’t ruled out rolling it out into physical stores.

The mammoth retailer is also planning to boost its presence in the video games market, after a strong year in the sector. “We’ve doubled our market share in both hardware and games. And we’ve invested quite heavily in resources – we’ve got a new team together, we’ve got more space, and we are moving into pre-owned games this year. A lot of it is investment in people, and we are working that market this year.”

Tesco

posted by Castle Computers-Gb Ltd Jul 01, 2010 at 2:16 pm
1

We are expanding into the Grocery market

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big business' for UK's biggest retailer

posted by Norman Ellis Jul 01, 2010 at 3:37 pm
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Dear Rob Salter,

The non-techy customers are put off and intimidated by specialist retail stores. Are They?.

Well as a small independent specialist VAR and retailer I can inform you that they are not. Tesco’s stack shelves high and sell cheap, but please tell me after unpacking their newly bought shiny laptop from Tesco’s where do your non-techy customers go for help when they can’t get on the Internet? Send or receive emails? Write letters or get their new shiny printer to work? Who do they call?

Nope! It isn’t the nice lady on your checkout. It is the small independent VAR’s and specialist retailers like me, who care about their customers and care about providing a service. When we sell new computers, we always set up the customers email and ISP details, so when they get the machine home it works from the box, we also install anti-virus applications and advise customers of threats from bogus and phising emails. We offer this service for free, and most other indies I know do the same.

About time that Tesco’s and other supermarkets realised that desktop computers and laptops need specialist care they cannot be sold from the shelf like a loaf of bread or bottle of milk.

Is it Tesco’s business plan to put their independent rivals out of business? It certainly seems that way to me. It’s high time that this country started supporting the independent SME.

What does the future hold in the UK for our younger generations? A job at Tesco’s? A life on the dole?

Albatros Computers.

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Should I boil or fry this laptop?

posted by Gary Jul 01, 2010 at 5:50 pm
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You've got it Norman... Increasingly, we independents are here to sort out the mess left by the grocery stores...

As I read the article, I muttered to myself that Tesco will need to start building technology corners with staff who know what they are selling, not just where it is! I can see a day where Tesco looks like PC World and PC World will start selling cut price bananas... well, perhaps not. But it is getting silly. (Hmmm... imagine asking somebody in PCW what would be the best fruit for my occasion - probably get a well rounded maintenance agreement with it too!!)

What really does irritate is that customers who buy their shiny laptop or printer at Tesco will then come to me for "a little advice", to "just pick my brains" and generally get me to provide the service that they knew they wouldn't get at Tesco.

I wonder where they will go when I am gone!

CAAOS
Computer Accessories And Other Stuff, IT advisor to (the customers of) the Grocery market

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Tesco T

posted by Stan Cookson Jul 01, 2010 at 6:02 pm
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Whilst I completely agree with the comments made by Norman and Castle Computers we all know that the threat is the most serious facing the Independent Market. Look around your local high street and you struggle to find independent grocers, butchers tetc. Large Supermarket Chains, Town Planners and other factors have made independents difficult to get to and costly to the extent most have been driven out of business.
However t is no good bemoaning this. Independents need to recognise their is a problem and try to tackle this. If Tesco are to be believed that many consumers are put off then either lignore them or assume that is the case and ask yourself what can I do about it. Look how you can overcome any possible concerns and sell your other benefits in a language they understand. Some time ago whilst advising a major e-tailer I suggested they look at the types of potential customers they could target. I suggested they have different shops for different types of potential customers including one for non technical people. One advert for a Hard Drive had a specification which read "fluid dynamic bearing" and which even some of the staff did not understand. It actually made the drive run a lot quieter but they never said that. No wonder some people are put off. The OFT compiled a huge report some years back on access to technology explaining some of the barriers to consumers including terminology, but how many retailers even read it or took any heed? Probably someone at Tesco did. You may not agree there is a problem but that doesn't mean potential consumers perceive things that way.

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The bottom line is profit for the shareholders

posted by Darren Jul 01, 2010 at 8:37 pm
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Having worked for a major PLC in the past and having seen the drive to earn profit no matter at what expense to staff moral and the end customer, then I can understand why Tesco are doing this - All they care about is market share and shareholder profit, not the customer or rivals.

I doubt support was even considered. Jo Public will either support their local VAR (these are the customers I want and look after) or go and buy it cheap from Tesco and then think they have a right to bludge free support from their Independant local store for something they've bought cheaper elsewhere by dropping the odd comment about something they "might buy from you" only to go get that from a pile it high, sell it cheap, no support vendor (these are the bludging customers I can do without - they are usually on benefits this type).

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Er..you can get help setting up from Tesco

posted by Ed Cameron Jul 02, 2010 at 7:09 am
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I bought a cheapish laptop from Tesco but I got pretty good help - their tech support guy in the shop was pretty good and their helpline (0845 456 6767) helped me with a connection problem even though it wasn't strictly to do with the laptop. Also, I know I've got no problems if I have to return anything I buy from them that doesn't work. Buy online and return to the local store if necessary - not sure small retailers are going to be able to beat them in the long run.

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Tesco

posted by scooby doo Jul 02, 2010 at 10:07 am
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Thankfully Ed you are wrong, there will always be a market for Independent Retailers, albeit a diminishing & increasingly specialised one. The key is not to try & take Tesco etc on at their own game, rather to work out where their weaknesses (& they do have them!) lie & exploit those. There are still people out there who appreciate the convenience, expertise & service offered by small local businesses, I suspect that in hard times like we are enduring at the moment this may take a back seat to financial pressures.

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Bigger threat to DSG than us small folks

posted by Allan Jul 14, 2010 at 11:28 am
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As Scooby Doo put it, while we haven't a chance to compete with them on price. We can do things they can't do and being there and looking after our local customers where the big stores don't. We already know how bad the likes of DSG are for shovelling any old tat out to anyone unsuspecting to walk through the door, and we all know we are the ones they come to sort out the issues. Frankly I don't see Tesco as so much more a different threat than the likes of DSG, but they are surely a huge threat to the likes of DSG though compared to us.

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