Bengaluru powers Tesco’s tryst with tech with key insights and smart reports

Technology is now the foundational block for many players in the retail industry, and it is no different for the UK-headquartered global retailer Tesco as it continuously engages with various tech platforms to stay ahead in the game.

In particular, analytics plays a vital role in determining how the company prices its products, improves product quality, and tailors experiences for customers. It also assists in the entire backend supply chain.

Tesco is also leveraging generative AI to automate complex tasks that require contextual intelligence. Initiatives include auto-generation of smart reports with AI-generated charts and narratives and processing of product returns to understand the underlying reasons.

A large part of the credit for integrating technology into the operations of Tesco must go to its Bengaluru centre, which was established in 2004. The analytics division in the city is the largest such hub for Tesco globally, delivering key insights that drive the company’s business.

In an e-mail interview with Enterprise Story, Venkat Raghavan, Group Director - Analytics, Tesco based out of Bengaluru throws light on how Tesco uses data and analytics and its engagement with GenAI for positive business impact.

Enterprise Story (ES): Could you give an overview of Tesco’s analytics division?

Venkat Raghavan (VR): We are a bunch of analytics and AI experts with a high fascination for retail. Our unique value comes from the ability to take Big Data and run sophisticated algorithms on it to find patterns, predictions, and recommendations.

However, the first step on this journey is how we partner with the key decision-makers of the organisation, including the CXOs and business leaders, to identify the right problems to go after. We spend extensive time collaborating with the core of our business to understand the key risks, opportunities, and context of our business across customers, products, operations, supply chain, and colleagues.

This gives us the ability to use our superpowers on the right priorities, which helps in delivering outcomes where it matters. Over the last three years, we have helped our business understand and personalise experiences for our customers, take price decisions better, and improve the quality of our products through AI-led customer feedback.

We work across all six markets we operate in, i.e., the UK, Ireland, Hungary, Slovakia, the Czech Republic, and India, and have our leaders and teams located in these countries. We also work across all our business functions, thereby getting a unique view of the business across all parts. In summary, you can visualise our team as the centre of expertise for analytics and AI across the Tesco group.

ES: What are the services provided by the analytics division to Tesco?

VR: We build long-term strategic capabilities on two fronts: understanding and growing the business.

Understanding the business: We stitch together business data to uncover facts and insights, which we surface through reports, dashboards, and strategic deep dives. This team provides invaluable guidance to our business on performance and its underlying reasons.

Growing the business: We gain a strategic advantage by leveraging advanced machine learning and AI to solve business problems better than anyone in our industry. This team focuses on driving quantified impact across sales, profit, and cash. For example, we predict customer behaviour and need to personalise experiences and use cutting-edge AI algorithms to optimise product pricing.

ES: What kind of role does Bengaluru play in Tesco’s analytics operations?

VR: Bengaluru plays a critical role in our journey. It is our largest hub for analytics and AI capabilities. During the initial set-up of this group capability, we found Bengaluru to be one of our go-to destinations, given the availability of skilled graduates and experienced talent pool.

We needed a team of people who can play the roles of a business analyst, a data scientist, and a storyteller in one combined package, and we found Bengaluru to be the place where we could find and build this talent. Over the years, much of our talent has risen through the ranks to take up management and leadership positions and are highly regarded across our global business.

The Bengaluru hub helped us take the capability off the ground and establish trust and credibility within our business by demonstrating the highest quality of commitment and innovation. Banking on this success, the team has now expanded its presence across five other countries, making it a truly global capability.

ES: How is analytics contributing to the overall growth of Tesco?

VR: Our story of contributions to the overall growth of Tesco has been one of continuous improvement. Over the last five years, we have evolved from a trusted source of insights to help us navigate through the COVID crisis to now being a strategic partner to solve the biggest problems for our business. We now start the year with a clear set of ‘top priority’ programmes that are discussed and agreed upon with the Group Executive Leadership at Tesco.

These programmes have key objectives aligned to them, which could be a quantified improvement in customer experience or a commercial number such as sales or cost improvement. This year will be our biggest year of impact delivery, with several of our analytics and AI programmes contributing to market share, sales, and profit growth.

ES: How is the analytics segment engaging with the technologies of AI & GenAI?

VR: Over the last five years, the core focus of this team has been on building the ‘best algorithm’ for the most important business problems. To that extent, we leverage a range of in-house platforms to build our AI models. Once built, we find the best way to scale the power of these algorithms—either through self-serve solutions or enterprise-wide systems.

Over the last 12 months, we have conducted in-depth research into GenAI and developed homegrown capabilities tailored to grocery retail. This capability has helped us mine both structured data and unstructured data (such as customer complaints and reviews) to find actionable insights to refine our strategy and operations.

We leveraged GenAI to achieve operational excellence by automating complex tasks requiring contextual intelligence. Some examples are auto-generation of smart reports with AI-generated charts, narratives, and insights, and processing of product returns made by customers and understanding the underlying reasons for returns across the footprint of our business.