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Technology is the chief ingredient behind running a successful retail business: CIO of Tesco HSC

Shubhra Rishi | Feb. 13, 2013
Tesco, the foreign retail giant, may soon set up its shop in India, but its global services arm will complete nine long years in May 2013. We spoke to Vinod Bidarkoppa, who joined Tesco HSC last year as Director (IT) and Chief Information Officer, and discussed the diverse aspects of his role in the retail business.

Scan-as-you-shop, mobile checkouts, digital kiosks, digital signage--all these are pure technological conveniences, and I can't imagine a world in retail which can run an enterprise as large, complex, as distributed and multi-channel as ours without the secret sauce, technology.

How are you using BI and analytics at Tesco?

We perform continuous algorithm improvement on how we need to order or replenish our inventory on an on-going basis. For instance, when we order groceries for next day / 7days / 21 days, one of the factors we incorporate into the algorithm is the impact of weather or seasonal events. Even the historical data that we capture for the previous week / year / day / month gets factored into this algorithm. So we continuously tweak this model so that we get better and better. We try and increase the availability of our products for shoppers in order to make their shopping trip better. We get as much inventory required into stores so that our customers can pick fresh inventory. That's one way we use BI.

The other way is related to personalization of data. Today, we are fortunate enough to have Tesco's Clubcard, a loyalty card offering which helps us capture a lot of customer data at the point of sale. Therefore, it helps us understand the buying behavior of a customer deeply. We can customize products and its prices for our customers. For every line of business, whether its property business or store ordering, we have been able to exploit the data to drive insights and make decisions based on them.

How do you react to the big data hype?

Big data is no longer just a "hype". The industry cut through the hype cycle a year ago. Today, we are talking about Internet of things, and according to Gartner, the market will be $2.7 trillion worth of connected devices in two years from now. At Tesco, we are in a place where we are mining and analyzing a lot of data. The club cart loyalty program is a legacy that our former CEO, Sir Terry Leahy has left behind. Today, we have more than 60 million customers who use this program. We generate an awful lot of data already.

We collect the sales data for all the transactions, and we bring it back into a data warehouse or into the databases. They have the ability to crunch this data and build insightful business models that tell us how we need to be selling and marketing in the future.

Dunnhumby is our sister concern which does all the analytics for us. Therefore, between the club card, which provides us a humungous amount of data, and the ability of Dunnhumby, we are in a very good position to harness and crunch all data that proliferates. It helps us make meaningful decisions. For us, big data is relevant and we are already sitting on heaps of data which we want to analyze correctly and accurately.

 

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