STRATEGIC ANALYSIS OF THE BENEFITS OF USING

DATA ANALYTICS IN BUSINESS: THE CASE OF

TESCO

KINGSLEY OKOH

COURSE CODE: MBB7003M

COURSE TITLE: DATA ANALYTICS AND THE BLOCKCHAIN

WORD COUNT 3,255

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TABLE OF CONTENT
PART ONE: BACKGROUND
1.0 INTRODUCTION:
1.1 AI/DATA ANALYSIS/BIG DATA AND BLOCKCHAIN: …………………. 3
1.2 INTRODUCTION TO TESCO……………………………. 3
2.0. PART TWO: DATA AND DATA ANALYTICS IN BUSINESS: THE CASE OF
TESCO……………………………. 5
2.1. AI, BIG DATA, DATA ANALYTICS, DATA VISUALIZATION, AND BLOCKCHAIN
IN BUSINESS: ……………………………… 5
2.2. TESCO AND BIG DATA ………………………… 6
2.2.1. OBJECTIVES OF TESCO …………………………….. 7

2.3.1. TOOLS FOR BIG DATA AND DATA VISUALIZATION IN TESCO…….. 10

2.4. DATA VISUALIZATION IN TESCO ………………….. 12

2.4. DATA VISUALIZATION IN TESCO2.5. BENEFIT OF BIG DATA AND DATA

VISUALIZATION IN TESCO…………………………………….. 14

3.0 CONCLUSION AND RECOMMENDATIONS …………………………. 16

4.0. REFERENCES …………………………………………………………….. 17

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List of Figures

Fig 1: Executive Dashboard to identify trends and decision making

Fig 2: Using Predictive Analysis to forecast Prices of commodity at Tesco

Fig 3: Heat map of tracks of customers in a store

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PART ONE: BACKGROUND

1.0 INTRODUCTION:

1.1 AI/DATA ANALYSIS/BIG DATA AND BLOCKCHAIN:

In today's digital age, businesses have access to an unprecedented amount of data, and companies
that can effectively harness this data have a significant competitive advantage. Artificial
intelligence (AI), big data, data analytics, and data visualization are four key technologies that
businesses can use to make sense of their data and gain valuable insights. AI can be used to
automate data processing and analysis, while big data technologies can help organizations store,
manage, and process large volumes of data. Data analytics tools can be used to identify patterns
and trends in data, while data visualization technologies can help communicate these insights to
decision-makers in a clear and intuitive way.

With the right tools and expertise, businesses can leverage AI, big data, data analytics, and data
visualization to gain a competitive edge in their industries and achieve their goals. The use of Big
Data analytics can also help businesses optimize their operations and improve their bottom line.
For instance, by analyzing sales data, businesses can identify trends and patterns in consumer
behavior, allowing them to adjust their pricing and inventory levels accordingly (Sharma and
Dhir, 2021). Additionally, Big Data analytics can be used to identify inefficiencies in the supply
chain, allowing businesses to optimize their logistics and reduce costs (Sharma and Dhir, 2021).

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1.2 INTRODUCTION TO TESCO

Tesco is a multinational grocery and general merchandise retailer based in the United Kingdom.
Established in 1919, the company has grown to become one of the largest retailers in the world,
with operations in 12 countries and a workforce of over 450,000 employees. As of 2021, Tesco's
revenue was £53.4 billion, making it the ninth-largest retailer in the world by revenue (Forbes,
2021).

Tesco's success is due in part to its focus on customer experience and innovation. The company
has a reputation for being at the forefront of retail technology, with initiatives such as self-
checkout systems, mobile apps, and online shopping platforms. Tesco has also leveraged big data
and data visualization to gain insights into its operations, customer behaviour, and market trends,
enabling the company to make informed decisions and drive business growth (Chandran, 2018).

Tesco's use of data analytics has not only helped the company achieve its goals but has also
created a competitive advantage in the retail industry. By leveraging the power of data analytics,
Tesco has been able to make informed decisions, improve operational efficiency, and provide
personalized experiences to its customers. For instance, Tesco uses predictive analytics to
forecast demand and optimize inventory levels, reducing waste and improving efficiency (Tesco
PLC, 2021). Tesco has also implemented blockchain technology to improve supply chain
transparency and reduce the risk of fraud (Tesco PLC, 2021).

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2.0. PART TWO: DATA AND DATA ANALYTICS IN BUSINESS: THE CASE OF
TESCO

2.1. AI, BIG DATA, DATA ANALYTICS AND DATA VISUALIZATION IN BUSINESS:

Technologies such as artificial intelligence (AI), big data analytics, data visualization, and
blockchain have been transforming the business landscape. These technologies are enabling
organizations to gain insights from vast amounts of data, optimize operations, and create a
competitive advantage. This section will explore the key benefits and applications of AI, big data
analytics and data visualization in business.

2.1.1 AI:

AI has become increasingly prevalent in business, with organizations leveraging machine

learning algorithms to analyse vast amounts of data and gain insights into customer behaviour,
operational efficiency, and other key areas. AI is being used to improve customer experience,
optimize supply chain management, and enhance decision-making across a range of industries
(Gartner, 2021).

2.1.2. Big Data:

Big data refers to the large and complex datasets that organizations generate from various
sources. By analysing this data, organizations can gain insights into customer behaviour, market
trends, and operational efficiency. Big data analytics is being used to optimize pricing strategies,
forecast demand, and identify new business opportunities (Davenport and Harris, 2007).

2.1.3. Data Analytics:

Data analytics is the process of examining large and complex datasets to uncover hidden patterns,
correlations, and other insights. Data analytics techniques such as predictive analytics, data
visualization, and machine learning are being used to improve decision-making, optimize
operations, and enhance customer experience (Sivarajah et al., 2017).

2.1.4. Data Visualization:

Data visualization is the graphical representation of data and information. It enables organizations
to communicate insights and trends quickly and effectively. Data visualization tools such as
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Tableau, Power BI, and QlikView are being used to create interactive dashboards and reports,
enabling employees to access and analyse data in real-time (Few, 2012).

By leveraging these advanced technologies, organizations can gain insights from vast amounts of
data, optimize operations, and create a competitive advantage.

2.2. TESCO AND BIG DATA

Tesco has access to vast amounts of data from a variety of sources, including transactional data
from in-store and online purchases, loyalty card data, social media data, and data from IoT
devices. In total, Tesco collects over 100 terabytes of data each day (Tesco PLC, 2019).

One example of how Tesco uses big data is in its Clubcard loyalty program. Through Clubcard,
Tesco collects data on customers' purchasing behaviour, including what products they buy and
when they buy them. This data is then used to create personalized offers and recommendations
for customers, which can help to increase loyalty and drive sales. For example, if a customer
regularly buys coffee, Tesco might offer them a discount on a new brand of coffee to try (García-
Sánchez et al., 2019).

Tesco also uses big data to gain insights into supply chain operations. By analysing data from
suppliers and logistics partners, Tesco can identify potential bottlenecks or inefficiencies and
make data-driven decisions to optimize its supply chain (Sun et al., 2017). Additionally, Tesco
has used big data to improve its in-store operations, such as by analysing foot traffic patterns to
optimize store layouts and product placement (Berlingerio et al., 2013).

Tesco's use of big data allows the company to gain a deeper understanding of customer
behaviour, optimize operations, and make data-driven decisions that can help to drive growth and
profitability.

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2.2.1. Objectives of Tesco

 To be the preferred choice for customers by providing high-quality, value-for-money

products and services that meet their needs and exceed their expectations.
 To provide shareholders with sustainable, profitable growth and returns by creating value
through innovation, efficiency, and investment in the business.
 To be a responsible corporate citizen by operating ethically, contributing to the
communities in which Tesco operates, and minimizing the impact of its operations on the
environment.
 To provide employees with a fulfilling and rewarding work environment that fosters
personal and professional growth and development.
 To maintain Tesco's position as a leading retailer by continuously innovating and adapting
to changes in the market and consumer preferences.

These objectives are aligned with Tesco's mission statement, which is "To serve shoppers a little
better every day". Tesco strives to achieve these objectives through various strategies, such as
using data analytics to gain insights into customer behaviour and preferences, investing in supply
chain efficiency to reduce costs and improve inventory management, and developing innovative
products and services to meet emerging customer needs.

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2.2.4. Sources of Data in Tesco

The multinational retailer, Tesco, operates as a brick and click store (online and offline). The
company generates and collects a vast amount of data from various sources, including:

 Point of Sale (POS) Data: This data is generated from sales transactions at Tesco's
physical and online stores. It includes details such as what customers buy, when they buy,
and how much they spend. Tesco's POS system records this data automatically as
customers make purchases. The data is collected in real-time, and Tesco can use it to
optimize product placement, pricing, and promotions to improve customer experience and
drive sales (Shukla et al., 2019).
 Customer Relationship Management (CRM) Data: Tesco collects and stores customer
information such as name, address, phone number, email address, and purchase history.
This data is stored in Tesco's CRM system, which is used to personalize marketing
messages, promotions, and offers. Tesco can analyses this data to gain insights into
customer preferences, behaviour, and demographics. The company can use these insights
to optimize product offerings, marketing campaigns, and customer service (Tiwari et al.,
2018).
 Loyalty Card Data: Tesco's loyalty card program, Clubcard, is one of the company's most
valuable sources of data. Clubcard allows Tesco to track customer purchases and
preferences, and personalize marketing messages and promotions based on this data.
Customers can sign up for Clubcard in-store or online, and the data collected from the
program is stored in Tesco's CRM system. Tesco can use this data to identify new
opportunities for growth and optimize product offerings (Shukla et al., 2019).
 Social Media Data: Tesco monitors social media platforms such as Twitter, Facebook,
and Instagram to gain insights into customer sentiment, preferences, and behaviour. The
company can use social media data to improve customer engagement, develop targeted
marketing campaigns, and identify new opportunities for growth. Tesco can collect social
media data using third-party tools, such as Hoot suite or Sprout Social, which allow the
company to monitor mentions and interactions across multiple platforms (Kulkarni et al.,
2018).
 Supply Chain Data: Tesco collects data on its supply chain processes, including
inventory levels, shipping times, and supplier performance. This data is collected using
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 Tesco's supply chain management system and is used to optimize supply chain operations
and ensure timely delivery of products. Tesco can analyse this data to identify
inefficiencies and bottlenecks in the supply chain and take corrective action to improve
efficiency (Tiwari et al., 2018).

2.3. DATA ANALYTICS IN TESCO

Data collected from various sources, Tesco employs a team of data scientists and analysts who
are responsible for managing and analysing the data. The company uses a variety of tools and
technologies, including Hadoop and SQL, to store and process large volumes of data.

 Data Mining: Tesco uses data mining to analyse large volumes of data to identify
patterns, correlations, and trends. For example, data mining can be used to identify which
products are frequently bought together or which products are commonly returned. Tesco
uses this information to optimize product offerings and promotions to meet the needs of its
customers (Shukla et al., 2019).
 Machine Learning: Tesco uses machine learning algorithms to analyse customer data and
make predictions about customer behaviour and preferences. For example, the company
can use machine learning to predict which products customers are most likely to buy or to
personalize promotions and marketing messages to individual customers (Tiwari et al.,
2018).
 Predictive Analytics: Tesco uses predictive analytics to forecast future customer
behaviour and preferences. For example, the company can use predictive analytics to
forecast demand for certain products or to identify potential areas for growth. Predictive
analytics can also be used to optimize pricing and promotions to increase sales (Shukla et
al., 2019).
 Data Visualization: Tesco uses data visualization tools to display large volumes of data in
a visual format. For example, the company can use data visualization to identify trends in
customer behaviour or to track the performance of marketing campaigns. Tesco uses tools
such as Tableau and Power BI to visualize data (Kulkarni et al., 2018).
 Natural Language Processing (NLP): Tesco uses NLP techniques to analyse
unstructured data such as customer reviews, feedback, and social media posts. NLP can be
used to extract meaningful insights from text data and understand customer sentiment and

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 opinions. For example, Tesco can use NLP to identify common complaints or issues raised
by customers and take action to address them. (Tiwari et al., 2018).

2.3.1. Tools for Big Data Management and Data visualization in Tesco

Through the use of various tools and technologies, Tesco has been able to harness the power of
big data to drive business growth, enhance customer experience, and gain a competitive edge in
the retail industry. Some of the tools used includes:

 Teradata: Teradata is a data warehousing solution that Tesco uses to manage and analyse
large volumes of data. Teradata provides a unified data architecture that integrates data
from different sources, such as point-of-sale systems, customer loyalty programs, social
media, and market research. With Teradata, Tesco is able to store and process its data in
real-time, which enables the company to make data-driven decisions and respond quickly
to changing market conditions. Teradata also provides advanced analytics capabilities,
such as predictive modelling, machine learning, and geospatial analysis.
 Hadoop: Hadoop is an open-source distributed computing framework that Tesco uses to
process large amounts of data quickly and efficiently. Hadoop allows Tesco to store and
process both structured and unstructured data, such as transactional data, customer
feedback, and social media sentiment. With Hadoop, Tesco is able to gain insights from
data that was previously inaccessible or too expensive to store and process. Hadoop also
provides advanced analytics capabilities, such as data mining, text analytics, and machine
learning.
 Tableau: Tableau is a data visualization tool that Tesco uses to create interactive and
visually appealing reports and dashboards. Tableau enables Tesco's business users to
analyse data and gain insights quickly. With Tableau, Tesco is able to create visual
representations of complex data sets, which makes it easier for users to understand and act
upon the insights provided by the data. Tableau also provides advanced analytics
capabilities, such as forecasting, clustering, and statistical modelling.
 SAS: SAS is an analytics software that Tesco uses to perform predictive analytics and data
mining. SAS helps Tesco to identify patterns and trends in its data and make data-driven
decisions. With SAS, Tesco is able to analyse customer behaviour, predict demand for

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 products, and optimize its supply chain. SAS also provides advanced analytics capabilities,
such as text analytics, time series analysis, and neural networks.
 Apache Spark: Apache Spark is a distributed computing engine that Tesco uses to
process large amounts of data quickly and efficiently. Spark enables Tesco to run real-time
analytics and machine learning algorithms on large data sets. With Spark, Tesco is able to
process and analyse data in real-time, which helps it to respond quickly to changing
market conditions. Spark also provides advanced analytics capabilities, such as graph
processing, streaming analytics, and deep learning.

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2.4. DATA VISUALIZATION IN TESCO

Tesco uses various data visualization techniques, such as dashboards, charts, and graphs, to
present data in an easily understandable and visually appealing format. The company has
developed a custom dashboard tool called Tesco Explore, which allows its employees to create
and share interactive dashboards that provide real-time insights into the company's operations.
These dashboards can display a wide range of data, such as sales by product category, store
performance, customer demographics, and market trends.

Heat Maps

One of the key data visualization techniques used by Tesco is heat maps, which display data as
color-coded grids. Tesco uses heat maps to visualize customer behaviour, such as foot traffic in
stores and online browsing patterns. For example, Tesco uses heat maps to identify the most
popular products in its stores and adjust its merchandising strategies accordingly. Heat maps can
also be used to identify areas of high demand for specific products or services, allowing Tesco to
optimize its inventory and supply chain operations.

Predictive Analytics

Another important data visualization technique used by Tesco is predictive analytics, which uses
machine learning algorithms to forecast future trends based on historical data. Tesco uses
predictive analytics to identify customer preferences, such as which products are likely to be
popular during certain seasons or holidays. This enables Tesco to adjust its marketing and
promotions accordingly, ensuring that it meets customer demand and maximizes sales.

Overall, data visualization is an essential tool for Tesco to gain insights into its operations,
customers, and market trends. By presenting data in an easily understandable and visually
appealing format, data visualization enables Tesco to make informed decisions that drive business
growth and enhance customer satisfaction.

Tesco's use of data visualization is supported by a team of data analysts and visualization experts
who use a variety of tools and technologies to create compelling visualizations. These include
tools such as Tableau, Power BI, and D3.js, which allow analysts to create interactive
visualizations that can be customized and shared across the organization.

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 Fig 2: Using Predictive Analysis to forecast Prices of commodity at Tesco
Fig. 1: Executive Dashboard to identify trends and decision Source: Mercatus
makingSource: Forbes

Fig 3: Heat map of tracks of customers in a store

Source: Scientific Figure on Research Gate by Lucas Nodus

Scientific Figure on ResearchGate

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2.5. BENEFIT OF BIG DATA AND DATA VISUALIZATION IN TESCO

The use of big data and data visualization has brought numerous benefits to Tesco, including
improved decision-making, customer engagement, and operational efficiency.

One major benefit of big data is the ability to gain insights into customer behaviour and
preferences. By analysing data on customer transactions, Tesco identifies patterns and trends in
purchasing behaviour and tailor its product offerings and marketing strategies accordingly. Data
visualization has further enhance these insights, allowing Tesco to quickly and easily identify
trends and patterns through visual representations of data.

Another benefit of big data and data visualization is improved operational efficiency. By
analysing data on store performance, inventory levels, and supply chain operations, Tesco
identifies areas for improvement and optimize its operations accordingly. Data visualization also
helps Tesco to identify bottlenecks and inefficiencies in its operations, allowing it to make more
informed decisions about where to invest resources.

In addition to these benefits, big data and data visualization has also helped Tesco to better
engage with its customers. By analysing data on customer feedback and preferences, Tesco now
tailor its offerings and marketing strategies to better meet the needs of its customers. Data
visualization also helps Tesco to communicate these insights to customers in a more engaging
and intuitive way.

Furthermore, Big Data and Data Visualization have enabled Tesco to improve their online
shopping experience. Tesco uses data from their online shopping platform to analyse customer
behaviour and preferences. By presenting this data in visual formats, Tesco identifies
opportunities for improving the online shopping experience, such as optimizing the user interface,
suggesting products based on past purchases, and offering personalized promotions. By
leveraging Big Data and Data Visualization, Tesco has been able to increase customer satisfaction
and loyalty with their online shopping platform.

Tesco has successfully leveraged these tools to achieve their objectives, including improved
customer segmentation, supply chain management, and online shopping experience. As the
volume and complexity of data continue to grow, businesses that invest in Big Data and Data

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Visualization are likely to gain a competitive advantage and achieve their objectives more
effectively.

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3.0. CONCLUSION AND RECOMMENDATIONS

In conclusion, Tesco's success in leveraging Big Data and Data Analytics is a testament to the
power of these technologies in driving business success. By analysing customer data, inventory
levels, supply chain operations, financial data, and operational data, Tesco has been able to make
data-driven decisions that have improved the customer experience, reduced costs, and increased
profitability. This success is supported by a strong data analytics team, advanced technologies,
and a data-driven culture.

According to a study by McKinsey and Company, companies that use Big Data and Data
Analytics to drive business decisions outperform their peers by up to 6% in profitability and up to
8% in total shareholder return. This underscores the importance of data analytics in driving
business success and the potential benefits that can be realized.

As the retail industry continues to evolve, other companies can learn from Tesco's example and
leverage data analytics to improve operations, increase profitability, and drive sustainable growth.
The benefits of data analytics are clear, and companies that invest in these technologies and
capabilities are well-positioned to succeed in today's competitive business landscape.

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