The global retailer is at the forefront of the digital revolution in terms of 'Clubcard', the loyalty programme, and their innovations in grocery home shopping. Tesco Bengaluru is leveraging India's expertise in analytics.
When you meet 57-year-old Glen Attewell, CEO of Tesco Bengaluru, you assume that he is one of those CEOs who is going to talk about the achievements of the group, and what India means to the $67.8-billion global business. But then he looks at the reporter and asks the questions like, 'Do you know how operations research came about?' For curiosity’s sake, the reporter entertains the thought, and there it begins - a tale that began with World-War II and went on to privatisation of big infrastructure in England and birth of new-age technologies that changed retailing across the world.
But Attewell maintains that the only thing that is fairly consistent amidst global upheavals in retail business and the convergence of technology is “how a person or company interprets data gathered from operations for the business to benefit.
Here are the excerpts of the interview with the CEO who wears his working-class roots on his sleeve, and is now spearheading India’s progress to become the centre of innovation for Tesco globally in analytics and research.
YS: Now that you have got us curious you have to tell us what operations research is and why it is necessary in retail?
GA: Now all that I am going tell you applies to retail. Operations research was born in World War II when the British got scientists, physicists and geographers together to figure out the precise movement of German airplanes. The research objective was to reduce the anti-aircraft artillery, which was reduced by a third, and be as effective in shooting down planes. The same principle was applied to determine the colour of planes that could track and destroy U-Boats. Remember, the U-Boat was not the classic submarine; it surfaced every few hours. So research showed that planes painted black were easier to spot than those painted white. Back then most bombers were painted black. But data collected from the number of U-Boats hits made between black or white planes turned research in favour of white painted planes. These look like simple problems, but there is a lot of study and parameters that go into determining the objective. Now let us look at the present; this method was used by British Gas to distribute gas between pipelines during peak load and non-peak load. By apportioning gas from one pipeline to another they could utilise existing gas—in the pipelines—instead of pumping gas from the central plant. This avoided wastage. I started my career in British Gas after a garnering a degree in Mathematics and Operation Research. This helped me build a career in retail. I had an affinity towards numbers and I have used data to create new revenue streams for Tesco and execute processes.
YS: How does this apply to retail?
GA: Operations research is the heart of retail. When I joined Tesco in 1985, big supermarkets—spanning more than 50,000sqft—were just about becoming popular. So Tesco had the problem of finding the best sites to set up a retail store. So they instituted a team of data scientists and engineers who would determine, with linear regression models, competition, consumer travel time, population density and the potential spending patterns of the consumer. This is how Tesco bought freehold property. This was crucial, and still is if you are to understand the consumer. The only added metric is that today we have to understand consumption patterns on smartphones.
YS: They say you went from being a data engineer to becoming a store manager; what did managing stores teach you?
GA: Yes, I asked for a transfer myself and headed a store in Essex. You have to remember that to work in a store in England you really have to know the culture of the people that you are going to be working with. University graduates never came and ran a store. Here I was running a store and people thought I would have a tough time managing the place. But my roots, which is from working class Nottinghamshire, helped me.
I just went to a normal state school and my influences were my parents who supported me. My mother worked in the textile industry, and my father was a weaver who then worked for John Player, the tobacco company - normal guys who worked hard and spent time and effort raising their kids well. I couldn’t have asked for a better start in life. So this helped me manage a couple of stores culturally.
But I was also able to do a couple of things, which is make the stores efficient with the use of data on what was selling and what wasn't. I made sure reporting of data was robust. I went to manage a store in Middlesex too. My research background helped me in my next role at Tesco, which was to manage private label products that could become premium products. I was part of the team that was entrusted with the task of turning around a business that was generating £ 80 million in revenues by retailing premium products. I began to build affluence scorecards and began to study the product line 'Finest, which at the time was selling to one percent of the shoppers. I began to identify gaps in product range, which could be upgraded and offered to aspiring population groups. In less than two years, in the early nineties, we converted the business into a £200-million business.
YS: So retailing is about the details?
GA: It’s about building trust and relationships. You build relationships with consumers and manufacturers. If you’re persuading a supplier to invest millions of pounds in a factory, he has to be able to trust that you’re in it with him. That takes time and the right kind of behaviour from the whole team. Tesco was at the forefront of the digital revolution in terms of 'Clubcard' – the loyalty programme, and our innovations in grocery home shopping. We own our own data analytics company, Dunn Humby, and continue to invest and innovate in this area. Whilst we had a headstart, there are now some major heavyweight competitors, so we can’t rest on our laurels.
India is therefore an important location for us; it is moving away from being a backend operation. The centre is focussing on high analytics for the global teams, and technology developments are being done here. Yes, there is more to be done for the Indian region and how it can become a prominent centre for the world.
YS: You have worked in South Korea and other Southeast Asian regions. What is the role of the CEO in managing global teams that are today being connected because of communications technologies?
GA: You have to understand the culture of the region and the individual. You have to build on capabilities, culture is a challenge but you must strengthen relationships. Look at the way people have adopted to retail. From the 1900s to 1960 Europe and the US were filled with neighbourhood stores. After that the big box retailers emerged, and now you see the Internet used as a powerful sales channel. It's a world that evolves and leaders evolve by learning from culture, technology, consumers and management, Tesco, like many other companies globally, is focussed on innovation, and India is a centre where we are going to build knowledge capabilities.