IoT has A Huge Role in Retail

What is the role of IT in a progressive multi-channel strategy at Tesco? How does it help in improving customer experience across all touch points—in-store, online and, mobile?

Technology has opened up new possibilities and with changing patterns in consumer behavior and innovations taking place at breakneck speed, the retail industry must keep up. Much of the technology that powers our parent company is developed at Tesco HSC. Over the years, Tesco has capitalized on customer insights, exploited opportunities and galloped ahead of competitors by blunting the start-ups’ advantage by proving to stakeholders that we have what it takes to succeed in the digital economy.

What is Tesco HSC? We have learnt that it is working towards creating revenue generation platforms for Tesco Global Business. Please throw some light. What role does your team play in driving value to the parent company?

Tesco Hindustan Service Center (HSC), setup in May 2004, located in Bengaluru, India is essentially the technology and operations arm which enables UK-based parent company—Tesco PLC’s global businesses. About 70%-75% of our technology business for Tesco is based out of Bengaluru, and the rest is distributed between the UK and the other markets Tesco is present in. Given that technology enables Tesco’s global businesses, the team’s role in driving value to the parent company is significant.

In the last 2 years, the global supermarket chain has created interactive grocery stores in airports and subway stations, developed a tablet and created ‘Labs of innovation’ to foster wisdom from start-ups and larger companies that Tesco is open to working with and create a “unified and focused organization to push innovation in every form, including research, development, open innovation, design and culture.

How do you see the future of mobile technology in the retail industry? Does Tesco make use of mobile-commerce? How is it helping the company?

Digital technology, in particular smartphones have become a lifeline offering in addition to numerous choices, information about bargains and have matured to a new and more affordable channel for entertainment and socializing. Significant progress has been made in this area by understanding and working to improve customers’ experience by reacting quickly and taking advantage of these recurring technological shifts.

Tesco launched the Hudl tablet over a year ago and more recently, an improved version the Hudl 2 was launched in October this year. This hosts all Tesco content—grocery, home, shopping, general merchandise, loyalty card in addition to allowing users to stream music and videos, take photographs and perform e-banking making it extremely convenient for browsing and online transactions.

Tesco is continuously looking to revolutionise offerings on mobile phones across platforms and introduce concepts such as virtual shopping at airports or subway stations.

Do you see the role of big data, analytics, and IoT in your business? How does it change the consumption patterns?

These are central to the retail business. Internet of things (IoT) is very attractive and in the retail industry especially, it is interesting from multiple angles. In large retail stores there is an entire line-up of devices made ‘smart’ with implanted sensors and actuators. Retailers must come to terms with data originating from these devices as well as from the RFID tags applied to high-value goods to track their sales journey.

We perform continuous algorithm improvement on how we need to order or replenish our inventory on an on-going basis. Today, we enjoy the benefit of 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 in-depth. We can customize products and its prices for our customers. For every line of business, whether its property services or store ordering, we have been able to exploit the data to drive insights and make decisions based on them.

What are the recent projects that you have successfully deployed at Tesco?

Tesco has already established online and mobile channels for e-commerce for the convenience of customers and provide them with greater options. Among many projects that were recently deployed, Hudl 2 (Tesco tablet), RFID for Clothing, International Clothing Online, enhanced General merchandise Online, Digital Clubcard Mobile Apps would be noteworthy. To establish price trust, Tesco HSC developed the ‘Tesco Price Promise’, a strategy where the contents of a consumer’s basket are virtually recorded to match the price with those offered for the same goods by other UK based competitors.

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

How do you handle security aspects in your company?

Security is high up on everyone’s agenda, beginning with the architecture and design of systems to the manner in which controls are implemented and governed. From a technology perspective, standard activities such as virus patching, firewall and gateway implementation, and intrusion detection is routine. Additionally, employees go through mandatory security-related training to ensure data-protection measures are adhered to and there are adequate processes in place to ensure they comply with regulations on data sharing. HSC also has standard Security Audits and corrective measures on an ongoing basis in compliance with necessary best practices.

What are your objectives as a CIO in life?

I believe the most effective CIOs need to strike a balance between the strategic and tactical aspects of the role. To succeed in today’s global, fast-changing environment, they must be able to see the larger picture and develop effective technological strategies to enable the business, hire great talent, and motivate teams to implement initiatives to create value for the business. This in-turn helps create better opportunities for the shareholders, business, and employees.

What change has come in a CIOs role in the last couple of years?

Increased adoption of digital models across different industries has necessitated the need to re-imagine people, process and technology to bolster the multi-channel nature of businesses. With greater penetration and the use of social, mobile, analytics and big data, as well as the expectation of speed and agility, CIOs now have to understand the new digital business models and alter the procedures of hiring, development, and implementation.

Do you think that CIOs are emerging from their traditional roles to become better business leaders?

Yes and No. There are examples of where technology executives have taken on business roles when opportunities present themselves and effectively contribute to digital business models but traditional roles will continue to exist and I see nothing wrong with this. A combination of opportunities exists and ultimately, the capability and ambition of the executive is what will determine the outcome.

Who are your role models that keep you motivating in your career?

From the non-technology world, Mahatma Gandhi is a big influencer for me. He was a great transformative leader who without direct authority was able to influence and achieve objectives with simple and powerful messages. In the modern management era, Steve Jobs is unique in that as he was able to pursue the cause of the customer relentlessly and promoted innovation and perfection in everything that was done at Apple.