We’ve had a magnificent morning with a Super Session with the former CEO of Tesco, Sir Terry Leahy, and another extremely interesting presentation from top-tier customer Daimler. Sir Terry Leahy is the hero of British retailing. In his 14 years as CEO, he has transformed Tesco from a follower in its home market into one of the global leaders in the industry. At the moment, Tesco is the world Number 3 in retailing. Tesco’s growth is closely associated with the person of Sir Terry Leahy – so closely, in fact, that stock prices fell a few percent when he announced that he was going to retire this year. The Guardian once named him as the most influential non-elected person in Britain – a true mover and shaker who reflected on his last two decades in the Super Session.
Tesco’s former CEO: “Data provides the margin”
Retail is probably the most competitive industry of all. It is characterised by extremely high turnovers and extremely low margins – so you need to take a very close look at your numbers if you want to grow profitably in such a risky environment. It is not a coincidence that most of Teradata’s customers were retailers in our own early days. “For a retailer, data provides the profit margin,” said Sir Terry Leahy during the session. “Data is priceless. But it is amazing how quickly it loses value as it gets older.”
“When I joined Tesco, it was like steering a car in which you can stare at the windscreen but cannot see anything beyond,” Sir Terry Leahy said. His first mission, therefore, was to get a better view of the company’s operations and to understand its customers better. The big thing of the time was loyalty card programmes, and they were soon introduced at Tesco. Sir Terry Leahy quickly realised that it is better to strengthen the relationships you have with your loyal customers than to try and attract disloyal ones: “Our promotional expenses are spent ten times more productively now, because we know our customers and know how to address them.”
Sir Terry Leahy took calculated risks when he expanded Tesco, both geographically and into new market segments and lines of business. All the while, he has kept a close eye on the markets. “Our competitors are our best business consultants. And they do it for free,” he said. “This is a data game where you pull information about your competitors.”
Daimler: Bring out the best
Last year, we had a special automotive track at the Teradata Universe in Berlin, mainly focusing on the potentials of data warehousing for quality management. This year, Daimler presented some details about just such a project that was set up in 2006 and has recently been completed. Daimler has consolidated its analytical environment for quality-related data in a Teradata data warehouse and has made the relevant warranty, servicing, diagnostic and all vehicle-related data available to analysts on a standardised interface. As a company renowned for the high quality it delivers, Daimler has to reconcile customer satisfaction (for example by ensuring “fixed first visit” at its service stations) with profitability. Efficiency is key for these operations – as well as for the company’s IT. By shutting down legacy systems made redundant by the data warehouse, Daimler was able to significantly cut its IT operating costs.
And it won’t stop at quality analysis. As Hermann Wimmer has argued on this blog recently, cars may soon be bought for their software apps rather than their hardware, and what makes these apps intelligent is some data warehouses somewhere. For example, the Spanish traffic authority DGT uses a Teradata data warehouse to identify areas that are prone to accidents while at the same time providing real-time traffic information via the internet. So you can check the map for congestion in Barcelona before you’re climbing into the next taxi to Catalunya and enjoy this balmy evening.
Mario Bonardo
