BI Case Study

Tesco’s Legendary Big Data Benefits

26 February, 2015

Tesco’s Legendary Big Data Benefits

Tesco, the largest retailer in the UK, was one of the first major companies to discover the endless benefits of big data analytics. Beginning in the mid 1990s, Tesco introduced its own loyalty program with the Clubcard. Many competitors used similar cards as a means to target discounts and coupons, however, Tesco realized the value of the insight it would give into its customers’ behavior patterns.

Tesco began processing the huge flood of data coming in from these cards, and was able to better target mailings of vouchers and coupons to customers, resulting in a huge increase from 3% to 70% in rate of coupon redemption. Seeing its analytics approach work, Tesco began applying it to other fields.

One of the company’s most profitable uses of analytics, was observing historical sales and weather data and using predictive analytics to optimize their stock-keeping system. By being able to forecast sales by product for each store, Tesco was able to save 100 million pounds ($151,718,000 US dollars) in stock that would have otherwise expired and thus wasted.

Now following Tesco’s lead, other competitive retailers are finding creative ways to use big data analytics in order to improve customer satisfaction and increase profits.

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