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December - 2013 - issue > CIO Insights
Vinod Bidarkoppa
Director (IT) & CIO-Tesco HSC
Wednesday, December 4, 2013
Tesco HSC is the group operating and technology centre for Tesco (LSE: TSCO.L),
a $115 billion turnover company - world\\\\\\\'s third largest retailer with presence in 12 countries.

Rising GDP growth, burgeoning population, greater disposable income, and increasing
consumer spending are combining to drive the global retail industry. The global retail markets are constantly evolving as the shopping
habits of the consumers are changing rapidly while the demand is surging with growing population. We can observe a new phase of global connectivity which is changing the way we source and share ideas. A new wave of creativity has been unleashed where no single country or company has the lead on innovation
today. The flow of ideas is multidirectional
and the front runners will be those who can take ideas from all over and leverage them in different ways and across different places. There is a huge shift taking place from brick and mortar to online and mobile channels.

Increasing role of Technology in Retail

Technology has opened up new possibilities in retail today. New innovations are taking place at a breakneck speed and retail industry must keep up with the pace. Social media, mobile
technology, big data and other upcoming
trends are defining and changing the landscape rapidly. In the retail business,it is about executing the multi-channel strategy which can become successful only when technology becomes a key enabler to implement the strategy. Digital
technology, in particular smart phones,have become a lifeline offering not just myriad choices, information, and access to bargains but also a new and more affordable channel for entertainment and socializing. Significant progress has to be made in this area by understanding and working to improve the customers\\\' experience by reacting quickly and
taking advantage of the technological shifts occurring constantly. Keeping this in mind, TESCO has recently launched the HUDL tablet which hosts all Tesco content - grocery home shopping, general merchandise sales online, loyalty card,music and video streaming services,
banking and many more.

Traditionally, retail companies have always dealt with structured relational databases with huge amounts of data and they were not focusing too much on getting the unstructured data
into their main stream of analytics.
But due to changing trends and rising competition, there are heaps of data being generated; it has now become imperative for enterprises to use big data-derived insights to identify important intelligence like hidden
market trends, customer behaviour and others. TESCO\\\'s internal social media platforms and expense system internally works on cloud hosted
applications. TESCO is always looking to revolutionize offerings on the mobile across platforms and introduce concepts like virtual
shopping at airports.

Though retail industry is in the midst of a massive transformation driven by technological advancements,there are several challenges being
faced by the retail industry. Following are some of the current challenges and the strategies to win over.

Growing Concern Over Food Wastage

Around the world, including Asia,a growing concern about the volume of food going waste is observed.According to an estimate, one-third
of all food is lost or wasted. The solution needs to embark on with greater transparency to discern the points where waste occurs across the
value chain. It is very essential to act more widely, reducing waste across the value chain. Just in time ordering,store ordering and depot ordering with calculated forecasting can help. To monitor and control wastage, TESCO uses video analytics which tells if a product is completely depleted, near end or full and fresh. This cannot be done manually. The replenishment sophisticated models to incorporate sales history and weather to only order what is required is also continuously

Building Price Trust

Internet and hand held technologies have made it easy to check and compare prices of products offered by various retailers. To establish price
trust, TESCO has adopted a \\\"price munch\\\" strategy where the contents of customer\\\'s basket are taken virtually,and price of the shopping is compared with other competitors in UK. This technology was all built at Tesco’s
India facility.

Convenience Shopping

In today\\\'s era of digitization, shoppers prefer to have the convenience of shopping without any time and place constraints. To enhance convenience in shopping, it is required to constantly innovate and develop offerings in online businesses so that customers can be provided a better shopping experience. Online and mobile channels for e-commerce increase
conveniences for customers and give them more options. Adopting multichannel retailing where stores support online offerings and vice versa can notably help. Technology is a great driver for providing additional value to customers.

Success in the future is not just about
having a strong physical presence in any one region. It is about tailoring that presence to suit customers\\\' needs. This approach can be called \\\'Glocalisation\\\'.It is a powerful blend of global strength and local understanding.
If we capture the opportunities of a world of connectivity, we can create new value, not just for customers andsuppliers, but also for wider society.
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