How tech can save Tesco

How tech can save Tesco

There used to be a time when Tesco could do no wrong. Recently, it can’t seem to do anything right. From overstated profits, to shrinking market share, everyone’s on a downer about the biggest of the big UK retailers.

Tesco faces serious challenges in the form of discounters Aldi and Lidl. While despite being relative small fry in the UK retail market (Aldi enjoyed 4.8% market share in August, compared to Tesco’s 28.8%, and Asda’s 17.2%) the foreign discounters are enjoying double digit growth, while the likes of Tesco and Sainsbury’s are shrinking.

And these discount chains brands have something all brands want – an aspirational appeal. It is families with BMWs and Audis that shop there now, wanting to appear as savvy shoppers.

A YouGov poll in July saw Aldi top the chart of favourite brands for Brits – beating John Lewis, the BBC iPlayer and Samsung.

But look past Tesco’s recent crop of negative headlines, and there is a business with everything to play for. It’s still the third largest retailer in the world, and has a digital side to the business that puts the competition to shame.

To my mind there is one obvious way that Tesco can defend its leading position: technology.

Let’s explore 3 ways how:

1) Applied learning

Tesco is well known for the sophistication of its Clubcard, the data it knows about its shoppers. The Dunnhumby division – which takes care of the Clubcard database – has been valued at over £2bn.

But how can this data be turned into a tool for enhancing the customer experience, rather than targeting offers.

How can it better work for the customer?

One of the great internet hoo-haa’s is the collection of personal data (seen all those cookie alerts?). But this personal data allows companies to better personalise their customer experience. Google and Facebook use that data to better target and increase revenue from ads. Apple uses it to refine its products.

What could Tesco do to build on its epic database and better personalise your shopping experience? To apply the learning.

I’ll give you an example.

I have three daughters, the eldest is 10. Therefore several times a year – for the best part of a decade – we arrange kids parties, and my wife will shop at Tesco for things like apple juice, bread rolls, and hula hoops.

This pattern could be turned from a reactive last-minute online shop (which it generally is) into a proactive service layer from Tesco.

I’m 100% positive that additional items could have been sold to us: balloons, streamers, cute cups and the like. There could even be suggested “packs” of party goods – from cheap and cheerful, to expensive Cath Kidston-esque.

party

If you know lots of information about my family, why not go the whole hog and really get to know us – making our lives easier in the process. We’d spend more money for the privilege.

2) Redefine shopping

People’s shopping habits are changing, we (apparently) are buying less stuff, more often. We’re also buying more online – and thanks to the likes of Aldi – have more choice than ever before.

Why not take the evolution of shopping a step further. Why do we even need to consciously shop for some items? Like bread, milk, breakfast cereal?

Again from my own experience I know that we buy the same stuff week in week out. Why? Because we like that stuff! So why do you even need me to ‘shop’ for it?

A recurring monthly fee – if you could demonstrably show it was cheaper than the competition – would cover a regular drop off of staples at your door: a 21st Century Milkman.

milkman

This commitment of recurring revenue would allow better forecasting, and a cost saving could be passed onto the customer. All of which could be managed by the existing Tesco mobile app.

Why not go a step further and use tech to facilitate ‘bulk buying’ with neighbours, or work colleagues, so that entire streets could enjoy discounts if they bought together?

Taxi disruptor Uber – somewhat controversially – employs surge pricing when taxis are in short supply (ie the price goes up). Why not do the reverse with your weekly shop – a shared shopping list that drives prices down?

uber

This could be a live feed on a social platform like Facebook – building a viral effect through a shared localised interest amongst friends.

This would play to Tesco’s digital strengths, and its excellent delivery service.

3) Joining the dots

We have acknowledged that Tesco has great data, and a great e-commerce platform. But how about closing the loop – using new tech to take the digital experience into the physical store?

iBeacon technology – now integrated into the Tesco mobile app – could create a personalised service layer within the store.

Installing Beacons around a store would allow Tesco shoppers to map out their shop, being directed (like in Google Maps) around the store based on their shopping lists, or previous purchases. Offers and upselling could be done on a purchase by purchase, customer by customer level.

Bought some mince beef, kidney beans, and tortillas? Why not buy some guacamole, and Corona beer – on offer, but only for you, and only if you buy them right now.

corona

And with multiple logins into the same app, families could benefit from a joint account – so I would be able to get offers when I pop in on the way home – based on my wife’s shop from the mobile app at the school gates.

The opportunity for Tesco – and indeed all retailers – is to reimagine how their businesses can work.

Digital shouldn’t be a thing that happens “online” – it should be a service layer that unites a customer experience, smoothing out the buying process, and allowing personalised benefits.

Get that right and you get the Amazon effect – where you buy something because you trust it’ll arrive, rather than that you’ve saved a few quid.

 

What are your thoughts? I’d love to hear if you have any innovative ideas for ways technology could help today’s retailers.

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