Ocado opts for analytics home delivery as it takes data monetization in-house with Tableau

Madeline Bennett Profile picture for user Madeline Bennett June 30, 2022 Audio mode
Summary:
The online supermarket platform puts Tableau in its shopping basket to give suppliers better data insights.

The cost of living crisis is putting extra pressure on the retail industry. Consumers have less money to spend and are shopping around for the best deals; retailers want to keep their prices as competitive as possible while maintaining a high level of service to retain customers; and suppliers are dealing with rapid fluctuations in prices for everything from raw goods to shipping.

Having a good handle on data is vital to navigating the current environment and changes in customer behavior, something of which online supermarket platform Ocado is well aware. Jack Johnson, Head of Retail Data at Ocado, explains:

If we reflect back on the recession in the late noughties, data was absolutely integral in keeping on top of customer trends, so that suppliers and brands could react really quickly to those changing needs. At any point when things become a little bit tougher - we went through this with Covid and we're going to be going through this really turbulent next 12-18 months - keeping on top of customer trends and using data to make better, data-driven decisions is going to be even more important.

Ocado has recently undergone a data monetization project, developing the Ocado Retail Data Platform for its supplier community, which offers real-time insight into the performance of their brands and should help them deal with today’s pressures.

Home delivery

The major shift for Ocado was switching its data monetization business from third party provision to in-house. The most common approach for retailers is to partner with a company, like dunnhumby in the case of Tesco or Nectar 360 at Sainsbury’s, to monetize data on the retailer’s behalf and operate on a profit-share basis.

But at the end of 2020, Ocado turned to Tableau to provide the technology to bring this business in-house. This has resulted in three core benefits.

Firstly, as Ocado isn’t leveraging third-party technology, it now owns the development of its retail data platform. With the third-party technology it was previously using, Ocado didn't have any control over what it put into the tool, how it looked and what it was giving suppliers. The Tableau-driven platform is much more customizable and supports quick changes. Johnson gave the example of the business wanting to focus on a specific operational KPI, such as availability:

We could put that data point within our platform and communicate to all suppliers that they needed to be looking at that and understanding the impact that your brands and categories are having on that specific metric. We've got a team of Tableau consultants that can easily make changes to our tool and we can publish that the day afterwards.

One of our competitive edges versus some of our competition like Tesco, which would use a dunnhumby, if they wanted any change to their platform, they would have to go on the back of the global product roadmap perhaps and you wouldn't get a change for 12-18 months.

The second benefit with the new data platform is increased revenues, as there’s no profit share model. Third, all the data and visualizations that Ocado is developing for its suppliers can also be shared with internal stakeholders. Johnson says: 

It can save time in client and supplier meetings. Ultimately everyone's using the same version of the truth. This is a really big thing for us as we look to save time for both our suppliers, but also some of our colleagues in buying, who have all sorts thrown at them by suppliers. They’ve got one version of the truth.

Choices

While the data platform rollout came in the midst of the pandemic, it wasn’t the catalyst for the move; rather it was a strategic call due to the ownership and development elements, as well as the revenue opportunity.

There were two main reasons for Ocado choosing Tableau as its technology partner. One is the ready availability of expertise in the market. Ocado has access to consultants from Tableau partner Biztory, which lets the supermarket manage and control its own development.

The flexible Tableau license model was the other factor. Initially, Ocado didn't know how many licenses it would need or the level of ongoing demand, recalls Johnson: 

Having a progressive license model where we could be a little bit more predictive with our overheads, that was something that would benefit us.

Ocado was already using Tableau for various internal data use cases, but this project was a separate entity, specifically designed for external use with suppliers to monetize data.

The data platform has proved popular so far. At the end of the first year, there were around 180 to 200 suppliers signed up to use the platform; there are now over 400, with 800 active users across those 400 suppliers. Ocado has ambitions to reach 700 or 800 suppliers by the end of 2023, which Johnson reckons: 

That's where we think the high water mark will be in terms of Ocado suppliers that want access to this platform.

Benefits 

Johnson outlined three benefits to suppliers that have signed up to the platform.

  • Time saving - The most common question a supplier will have is ‘how am I performing at Ocado?’. When Ocado meets with a supplier, both sides can get the answer to this question quicker as the data visualizations set up within the Ocado platform are the same as those the buyer is using.
  • Growth - The data platform offers suppliers insights into where the opportunities are and how to best optimize media, helping to facilitate growth. Suppliers that have subscribed to the platform grow 4% faster than their counterparts.
  • Data - In terms of data points, Johnson says Ocado is market leading in what it provides to help suppliers understand the e-commerce market better. This includes basket analytics, providing suppliers with intelligence into how customers shop for individual products and how to optimize decisions across category management. Tableau dashboards show whether a customer reaches a product via search, stored favourites, the product description or other means, data that suppliers can use for their e-commerce strategy.

The technology has been designed for ease-of-use. Ocado pulls all the data it thinks a supplier would get value out of into self-service dashboards that exist within the data platform, explains Johnson: 

All the dashboards are designed to ensure that someone who isn't an expert with data can still go in and interpret it and action it. We tend to get a lot of Ocado account managers who are the sales people within suppliers, they don't tend to be very data literate in comparison to a data manager. We need to make sure the tool is really straightforward, and it's all self-serve and easily accessible.

Thanks to the permission and security functionality Tableau offers, Ocado can ensure a supplier only sees their categories and brands within the platform, he adds: 

The security and permission rows are quite easy to use. It’s really simple - someone just logs in and then they can access all their self-serve dashboards. They should not need any level of data expertise to be able to interpret those dashboards and use them for whatever use case they're designed to operate for.

However, Ocado also caters for the more data-savvy people using the platform:

Our development is geared towards making sure someone can go in and export the specific data that they want so they can manipulate and interpret it the way that they would like - you're not hampered by having to interpret data through a dashboard. A lot of people do just want to get the raw data out. We want to be able to give that functionality back to our suppliers as well.

Ocado is now going through a huge replatforming of the data platform, due to launch in September. The firm is redesigning all its dashboards, adding new functionality such as a download center and knowledge hub, and integrating those into the dashboards. It's also leveraging Curator, a website wrapper you can put around Tableau dashboards, which Johnson says makes them look a bit more professional:

We’re adding new visualizations that we know our suppliers want. We've gone through a big process of asking suppliers for feedback. One of the benefits is that we can listen to all that feedback and make it happen. That's a really empowering thing for us as a team.

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