Using Data For Competitive Customer Strategies

by Preeti S    Feb 16, 2015

Vinod Bidarkoppa

With emergence of digital customers, the brick-and-mortar stores are making the best use of technology to stay relevant. They are competing to cater to the evolving needs of customers, who want the ability to shop anytime, anywhere and anyhow.

By adopting the latest technologies, Tesco Hindustan Service Centre (HSC), technology centre for Tesco worldwide, is expanding the envelope of customer experience. In an exclusive interaction with CXOToday, Tesco HSC Director (Group IT) and Chief Information Officer Vinod Bidarkoppa says there is a need for CIOs to shift focus from the back-office role to understanding the overall business. He also explains how big data is enabling business decisions at Tesco HSC, which has 7,000 stores across UK, Central Europe and Asia and employs over 6,500.

Recently, after the resignation of Tesco CIO Mike McNamara, the company said it will have a CTO, not CIO, replacing him. What does that mean?

If you look at broad activities we are doing from technology perspectives, we need someone to drive the technology agenda. The focus will be on customer agenda using technology, making business more efficient using technology.  Over a period of time, we have modelled our organization to be able to progress with a CTO instead of a CIO. Hence the decision to bring in the CTO.

With technology becoming a business, how is the role of a CIO changing?

In the last 10-15 years, technology is becoming more complex. For businesses which are lot more consumer facing—whether banking, airline of retail– there is a huge push in the digital space. Technology is making rich contribution towards making a difference to business—driving topline, etc. In a mix of all that, particularly for large companies, you will see a multi-model IT. There are some aspects of technology which will not change rapidly like HR or finance, but there are things that need to change with lot more pace and agility. Finding those areas will help make a difference to the business in real time. So the role of CIO is transforming in driving different models at multiple levels.

The focus is shifting from the back-office role to understanding the business, helping shape digital model and drive the business forward.

In 2014, Tesco announced that it would cut down the IT spends. Why was that?

Any large business goes through cycles. According to the changes in the macro environ and internal strategies to align with changes in industry as well as specific positioning of the company in the market place, different investment decisions are made. In light of the new business investments decision, technology will continue to be a significant part of the overall capital spend.

As e-commerce gains momentum, how do you think the brick-and-mortar stores will compete with online companies?

Tesco is very strong in the digital space. There is a great momentum in that direction. What will drive it ahead is to marry the brick and mortar aspect of a business with the digital space. We are expanding the envelope of customer experience, actually giving the freedom to experience the brand. Be it features like scan at the shop, digital kiosk or using digital wallets, all these are enabling technologies that help drive the business ahead.

What are the new technologies adopted at Tesco shops?

There are several technologies including the hand scanner. When a shopper comes into a store, instead of collecting all products and going to the check-out, he can use handheld scanner with the scan at the shop facility and take images on mobiles and get instant details about the products. We have something called Virtual Eyes, which help expands the range of what is stored in the store. Customers can go and click through the Virtual Eye and select products, and they will be delivered to their homes.

Electronic self-labelling. Instead of a printed label for pricing and promotion, we provide the ability to push the pricing in real time and change the promotions to the e-labels.

We do video analytics. Cameras in the stores provide information about inventory level of groceries or fruits and it will be conveyed to the managers in real-time. Through all these, we bring the ability to provide our customers availability, best price and best range.  It’s all about having satisfied and delighted customers.

In which areas are you using big data and business intelligence?

We are a $100 bn company with presence in multiple countries. The only way we can make better decisions is through data, whose key factors are volume, variety and velocity. Across multiple domains, we see the frequency of changing data that comes in shopping patterns. We capture the transactions of customer and study the patterns. Data helps us know what must be kept in stores. Its seasonality. Should we store it 7 days in advance or one day in advance. Data helps us make better decisions and understand the need for products in real-time.

Another area is video analytics which enables real-time assessment of inventories. The big change in the industry is the way the customers use social media. They leave behind a trail of data online about how they interact with different brands. We will know what the customer is seeking and that is turned into insights to tune our services, products and customer experience.