Tesco does not have an innovation or R&D department, it tries to have a culture of innovation, according to executive director (corporate and legal affairs), Lucy Neville-Rolfe. Speaking at the IGD’s Global Retailing Conference, Neville-Rolfe said it was this culture, in which all staff are “expected and encouraged to contribute as part of their everyday job”, that has helped to grow Tesco on every level. Neville-Rolfe said Tesco had focused on what customers want to buy and that Clubcard had been central to the way Tesco conceives and tests innovation. “It allows us to understand changing behaviours of consumers,” she said. A surge in sales of chocolates, wine and flowers ahead of the summer holidays was analysed via Clubcard data, for instance. It showed shoppers were those with children who were buying end of term presents for teachers. Similarly, Tesco will trial products and then read the Clubcard data to gauge the response, said Neville-Rolfe. Through the retailer’s Twist programme, which involves all staff working in-store for a period of time, employees are encouraged to suggest ideas for improvements on working practices. One suggestion to move the barcodes on sandwiches to the front of pack, for example, to save time in scanning, is reported to have saved £500,000. “But change is about action not rhetoric,” said Neville-Rolfe, who added that within Tesco there were many examples of new start-ups and new concepts, as well as launches in new markets. They include Tesco’s non-food catalogue, Tesco direct, which offers 10,000 products and is “giving competitors a run for their money”; and Tesco.com, which serves 250,000 customers a week from 300 stores and has 1m regular shoppers. According to Neville-Rolfe, Tesco will be introducing electrical vans to this service shortly as part of its community plan. Tesco shares best practice via its international team too, said Neville-Rolfe, revealing that the retailer’s expansion in Malaysia and Thailand has helped it to develop its offer for Muslim customers, while its service centre in Bangalor drove innovation on cutting queues at checkouts. “You’ve got to innovate to keep pace,” she added, revealing the retailer’s latest ambitions to help consumers make ethical choices. “Our customers are telling us that something important is happening – they are looking for something else and want us to help them behave in an environmentally sustainable way. “We are determined to be a leader in helping to create this low carbon economy and find a reliable way of measuring the carbon footprint from field to shelf. The way we communicate it has to be clear for customers. It’s not going to be easy but it is important.” Neville-Rolfe added that carbon labelling could play a similar role for environmentally conscious consumers as nutritional labelling does for health-conscious shoppers. “Tesco is not a drugs company or a car manufacturer with classic R&D innovation,” she concluded. “We respond to what consumers want through hundreds of small innovations. “There are new opportunities – premium products, healthy options, local products and those that help us reduce our impact on climate change – it’s an exciting time to be in retail.”
Will tescos also be developing a labelling system to illustrate the impact of their stores on other business in the local area? How about net job losses caused by store in the area, or additional number of car journeys created by creating an out of town centre?
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