Thursday, December 04, 2014

Does #Tesco 's Struggles Question The Application Of big Data In The #Retail Business?

Interesting article of the Harvard Business Review, trying to explain the reasons of Tesco's recent struggle in its domestic market. Tesco has been for years considered as one of the best global retailer, and a trailblazer in customer relationship management. But Tesco has lost market shares the past few years, letting hard discounters Aldi and Lidl grow in the UK market, whereas Tesco has based its success on its ability to value its customer experience and the analytics of customer data. Once the modell of a lot of other retailers, Tesco now brings a lot of questionning and the ability of big data to leverage revenue growth. Indeed, Tesco owns both the data (they know pretty much all what could be known of their customers) and have the experience to use it, but it has little impact now. What is even more schocking is that as hard discounters are benefiting of the weakness of Tesco, is that UK customers seem now to prefer a lean shopping experience to the fancy loyalty program Tesco has build up. To me Tesco's issues are simply revealing that before mastering marketing tools, one company should focus on execution. Also, analyzing data to maximizing profit without understanding customer needs is useless. It will be interesting to see how Tesco manages to get back on track to see if they rather lower their investment on their loyalty card program, or if they actually find new innovative way to create extra customer value out of it.