Tesco’s Analytics Engine: Driving Relevance, Speed and Loyalty

Over the last five years, Venkat has built his team into a pivotal unit within Tesco's group strategy. This transformation includes establishing the Analytics Centre of Excellence (CoE), partnering with CXOs, and delivering significant commercial impact alongside cultural change by addressing a blend of daily decision-making challenges and large-scale transformations—such as customer personalisation, category management science, demand forecasting, cost base optimisation, and experimentation science—across various group businesses.

In a conversation with CiOL, Venkat Raghavan, Director of Enterprise Analytics at Tesco Business Solutions, explores the analytics-driven shifts reshaping global retail. He highlights hyper-personalisation, extreme convenience, seamless omnichannel experiences, and the practical integration of emerging technologies—positioning analytics and AI as Tesco’s core strategic differentiators. Excerpts.

Retail is undergoing a structural shift, with customer expectations shaped by hyper-personalization and instant fulfilment. From your vantage point, what are the most critical analytics-driven shifts reshaping global retail? How is Tesco navigating this transformation?

I believe there are 2 key shifts shaping retail industry. The first is Relevance – retail is shifting from the traditional concepts of buying and selling and into a place where customers seek highly relevant and meaningful engagement. When they connect with us through any of our touchpoint, they want us to show that we know them and can connect with them on an individual level. This will be a trend that will take a few years to build as retail industry shifts from the traditional thought process of addressing segments of customers with similar needs.

At Tesco, we bank on our strategic program named “I Love My Tesco Clubcard” to constantly understand, anticipate and serve our customers and their needs. We leverage our key strength in connecting with over 23 million customers in the UK through the Clubcard program to design highly relevant experiences. This includes our fast-evolving capability around personalisation, digital experience, and loyalty program. We reach out to our customers with millions of personalised offers and messages and hear back from them to learn what works best for them at an individual level.

The second key shift is the need for extreme convenience – the question is, how big is the time gap between the customer thinking about a need and getting it in their hands. This means we need to connect with customers in as many channels as possible and prepare our supply chain to deliver the needs as close as possible to the speed of their thought. ‘Easily the most convenient” is out strategic program at Tesco that focuses on delivering this connected and convenient experiences. Tesco was one of the first customers to foray and scale online food business model, introduce the Click and Collect model, and more recently have introduced Whoosh which is our instant delivery proposition to our customers. Along with our significant physical store presence in UK, these digital propositions create a truly omnichannel gateway for our customers to meet their needs.

I personally feel this is the most fascinating time to be in retail - with every single theory in retail being questioned across Customer, Product, and Supply Chain.

As the lines blur between physical stores and e-commerce, how should retailers think about creating truly unified experiences? Is it more about technology, culture, or customer empathy? And where does data tie it all together?

I would definitely say it “Customer first” culture, leading to everything we think and do. Tech and AI are enablers to build the culture. Customer centricity is not a new discussion topic in retail, however, its meaning is evolving dramatically. About a decade ago, Customer centricity was a focus of a few teams that Serviced customers in Stores, built digital fronts such as .com and apps, and solved customer issues through contact centres. Today, Customer as a theme is now moving to the core of merchandising, pricing, supply chain design, and even supplier strategy.

We at Tesco feel every channel is a gift to make the customer experience more seamless. Our starting point is a deep understanding of our customers at the most granular level to guide them to find the best of Tesco. This entails building a deep repo of AI models to understand customer preferences, choices, and needs. These are then aggregated at channel-mission levels to create the right propositions in stores, online, app and other touchpoints. In many ways, our 30 years of experience in growing our Clubcard loyalty program has taught us that the more we understand our customers and their unique needs, the more we can orchestrate across our channels to help them get the best out of Tesco.

Click & Collect has become a defining feature of hybrid retail. But beyond operational efficiency, what signals from customer behaviour are emerging in this space? How is Tesco translating these insights into better design or service outcomes?

Like I mentioned earlier, Tesco was the first UK grocer to introduce Click & Collect in 2010. Since then, we have scaled this proposition to over 500 stores and it is now an integral part of our “Easily the Most Convenient” strategy. This serves a sizeable part of our fast-growing online revenues.

In addition to the channel helping millions of our customers pick up their baskets with ease, it has also taught us the need for frictionless handover experience – which is about ensuring that the orders placed by the customers are delivered on-time, in-full and with great picking quality. This mission has helped us find ways to improve our operating procedures in the stores, train our colleagues, and keep the click & collect queue time to the least even during our busiest trading days (which is one of the best in the industry!)

We are also exploring ways to make the visit to our click & collect location more exciting for our customers – one of our recent innovations is our partnership with Ikea in Republic of Ireland – where customers can place order on Ikea and visit one of our store car parks to pick up their products. We have learnt that in addition to making Ikea’s product range more accessible our customers also appreciate this as a more sustainable delivery option.

Much is being said about the ‘store of the future’. In your view, how realistic is this concept in the near term? How are emerging technologies like AI, AR or real-time data being grounded in Tesco’s day-to-day retail operations?

I believe the ‘Store of the future” will be defined by the meaningful propositions and value creation as opposed to glamorous innovations with little tangible impact.

We are on the journey of constantly exploring “What’s next” in our store concepts. Over the last 5 years, we have tested multiple innovations some of which are thought provoking, including the 5 checkout-free “GetGo” stores that we have opened in the UK since 2021. The way these stores work is once a customer signs up for GetGo, they can just scan the QR code at either the entrance or exit, depending on the store, and shop as usual. Using a combination of cameras and weight sensors, GetGo stores can tell what customers picked up and will charge them automatically when they leave the store.

These experimental stores help us understand the gap between technical possibilities and human readiness to embrace them in a retail set up.

More recently we have also been testing concepts that deliver a Food++ experience for our customers. For example, in one of our recently refurbished stores in UK, our customers will now be able to get advice, treatment and virtual GP appointments for a range of health concerns in a new dedicated in-store health zone. This new concept brings together food, health and wellness ranges, alongside enhanced pharmacy and healthcare services, to enable customers to manage all aspects of their wellbeing in one place. The key question we are trying to answer here is, how many key customer needs can we serve without them having to make another visit to a different place.

Looking forward, what role will enterprise analytics play in shaping the next decade of retail? Do you see the future being driven more by automation, anticipation of customer needs or agility in responding to market disruptions?

Enterprise Analytics is our group capability for enabling intelligent decision making using the power of analytics & AI. We are present across all 5 operating countries of Tesco which gives us the power of local context which then coupled with our industry leading AI capabilities results in new growth and profit pools. We foresee our role to remain the same over the next decade – and if anything, become more accentuated.

We believe retail is all about Speed. If we can be the first and fastest to understand our customers, supply base, and competition better than others we will continue to build the right foundations for our business to succeed. We put this in practice by laying down tangible principles such as “12 weeks to show measurable commercial impact” of any AI programs we pick.  We are also frugal in how much we invest and expect most of our AI programs to self-fund after an initial period of seed investment.

Today, AI happens to be our best superweapon – and via AI we envision helping our business understand customers better, simplify our operations, and anticipate our competitive playfield. We are already building a portfolio of differentiated solutions across these areas and will continue to accelerate the progress.

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