Analysis Of Data Management Strategies At Tesco

Tesco are a large multinational organisation. Initially Tesco was founded in 1919 by Jack Cohen as a grocery stall in East London, with the first store opened in Edgware in 1929. The first self-service store was opened in 1948 in Hertfordshire, with “a mixed reaction from customers at first” (tescoplc. com, 2018), and Tesco has only grown stronger since. Tesco now operates in countries all over the world, including the Czech Republic and Thailand, with a range of services including online shopping, charitable sponsorship and grocery, clothing and electronic supplies, to name a few. In this report I shall examine the various systems used by Tesco to manage data and the benefits received by all from these systems as well as the issues surrounding the systems and how the systems can be used.

Despite being a provider of many services, Tesco manages to collect and integrate data from all these services. In a supermarket environment, data undergoes many steps when products are put up for sale and sold. Products are assigned barcodes at warehouses before being shipped to stores. These barcodes allow staff to effectively recognise and package products based on category. These barcodes are given meaning to become information. For example, the barcode on a bottle of water contains numbers, these numbers are then input into a system to produce information, in this case being that the product is a bottle of water. Effective data management makes it easier for staff to align the products in stores and easier for customers to locate. When the staff member or customer then scans an item the data will register in the system and allow the customer to see what the product is and the price assigned to the product. All this information is contained in a database which manages the data in a way that is easy to understand, effective and efficient. This data collection method is also very helpful for supporting decision making. Tesco staff can see what products are being sold through real time data and plan for the future based on this. If a product is not selling or selling less than before, Tesco can pull the product or reduce the quantity needed. Dashboards are particularly helpful to illustrate key performance indicators as these can aggregate data from multiple stores to show national or international trends. This real time information also shows warehouse or storeroom workers when stock is running low and whether more produce needs to be brought to the shop floor or ordered from a warehouse.

In terms of online data management, Tesco claims to “collect information about online purchases, information about online browsing behaviour and amount of clicks on adverts and information about devices used to access their services”, all falling under the cookie policy and new GDPR regulation. While this may seem like a lot considering this is just targeted at online shoppers, Tesco use all of the data they can access to their advantage. Adverts are often tailored based on the device used by customers to buy products. For example, someone with a MacBook will receive ads targeted towards more expensive products that someone with a less expensive mobile phone, as the belief is that people with more expensive technology can spend more money. However, Tesco can also use all this information if a customer buys a faulty product and needs a refund or if a batch needs to be discontinued, as occurred recently with spinach containing listeria.

Tesco Labs, a division of Tesco using information systems to “research new technologies which could benefit the supermarket and its customers”, analyse consumer behaviour, emerging business models and environmental impacts using real time analytics. Using Hadoop, Tesco confines all its data within the cloud using a data warehousing system. This makes the data “accessible and useable by any arm of the operation, as and when it is needed”. Tesco Labs also analyse new technology methods that could be used to innovate and add value to projects. Tesco Labs “tackle the most significant opportunities and challenges to Tesco, without operational constraints, and in doing so pave the way for others”. With the many information systems currently being used by Tesco, data can be easily generated, summarised and stored adding great value to the company.

In 2013, Information Age (information-age. com) claimed that Tesco’s supply chain analytics function has saved Tesco “many millions of pounds”. It states that Tesco’s analytics programme has managed to create methods of predicting customer buying behaviour, for example, how the weather influences our purchase behaviour. The analytics team has, since its 2006 founding, grown in numbers and increased value to the company. There are great benefits to Tesco’s data management. Efficient data management allows Tesco to create better customer interactions, which in turn fuels better decision making. Tesco, through its Clubcard system can see what customers buy and repeat purchase and through this offer similar products and offers in future to customers based on trends. Tesco online can now be tailored to customers individual experience. Tesco data management also ensures that all data is safely stored and is more efficient for users allowing them to quickly identify and handle problem areas. The data, being conveniently stored in one location over the cloud, minimises the risk of data becoming redundant or ineffective.

This isn’t to say that Tesco has not encountered problems. In 2016, Tesco encountered a security breach leading to the loss of £2. 5 million from 9000 customers. Andrew Bailey, chief executive of the Financial Conduct Authority referred to this incident as an “unprecedented and serious breach”. While Tesco quickly rectified and apologised for the incident, the Financial Conduct Authority recently fined Tesco Bank £16. 4 million for failing to provide adequate controls and care to prevent the attack, an amount that would have risen to £33. 56 million, had Tesco not cooperated with the FCA. Yet, for such a large corporation with millions of customers relying on their services, it would be expected that substantial data security is in place and that users would not be vulnerable to cybercrime.