The answer to the first question is a big ‘YES, THEY DO!’ It’s just a matter of logic. Otherwise, can anybody think about how can the UK’s largest supermarket chain manage a retail data infrastructure operates in near real-time in its 1,200-plus stores and still being successful? But let’s start by the very beginning.
What’s Tesco? In a very simple way, Tesco is a giant basically focused into developing new products (food and non-food business) and services (financial and telecommunications) in order to ”create value for customers and earn their lifetime loyalty”, according to Sir Terry Leahy, CEO of Tesco since 1997. Tesco is also the world’s largest internet based grocery retailer with operations on three continents and the second largest e-retailer after Amazon.
We could be going and on explaining in more detail all of Tesco’s activities, but let me jump this part and allow me to focus into its core business, that is, supermarket retailing where it is recognized as a role model globally for its stragegy (see steering wheel) and simple goal: ‘bringing prices down’.
In this case, innovation is very different from other industries, such as biotechnology, software development or pharmaceutical. If in these industries innovations are protected through long-lasting patents, here the focus is to highlight innovation in the delivery of goods and services from manufacturer to the customer all day long during the whole year in a dozen different countries. In this process IT generates a competitive advantage.
Particularly important in this process is the contribution of Clubcard, a loyalty program with over 12 million regular UK customers which is used to analyze their shopping patterns. Maybe it sound a bit abstract but let me shed some light with a real example. Tesco realized that just before the summer holidays each year, sales of flowers, chocolates and wine were suddenly going up. After the initial surprise, and thanks to the club card data, Tesco found out that it was families with children who were doing the buying. They were buying end of year presents for their teachers! Conclusion: Tesco is able to target specific service offers to customers with specific profiles which, simultaneously, allow them to collaborate with suppliers to develop more of the products and services that customers want.
And here we go back to the very heart of the process. What do customer want? Given that they have limited budgets and/or limited time, the services need to be delivered as simply and cheaply as possible and it is here where access to communications and information technologies is a key issue and there is a competitive advantage. Getting into more technical details, all this is possible thanks to Sysrepublic Real Time Integrator™ (RTI) along with Microsoft® BizTalk® Server and Microsoft SQL Server™ which has given Tesco head office staff and systems a single, near real-time view of supermarket sales data from all its stores, which was previously unavailable in such detail or in such a timely manner.
A final consideration just I didn’t make my point clear enough. In March 2011 a new CEO is taking over leadership of the company, if you feel curious about who is going to receive the baton, please click here.
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