Sainsbury’s has an appetite for data analytics

Madeline Bennett Profile picture for user Madeline Bennett June 12, 2017
Summary:
The UK grocery chain plans to use analytics to grow tastier lettuce and produce better milk.

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Sainsbury’s is one of the UK’s biggest supermarkets, and with the recent acquisition of Argos, one of the country’s largest retailers. However, the firm has a new focus away from groceries and sundry merchandise – data. The company appointed its first chief data officer (CDO) last October, in the hope of improving Sainsbury’s fortunes through analytics.

Andy Day, former News UK CDO, said that when the call came from Sainsbury’s, he cut short a planned career break to join the business. He liked the culture, he liked the firm’s ambition to change, and he saw a CEO who understood the opportunity in data to pivot the organisation:

We're a business with loads and loads of data. We have 191,000 colleagues, which is more colleagues than some organisations have customers. We have loads and loads of products and we obviously have millions of customers through those three data streams, the colleague data, the customer data and the commercial data.

We’re trying to make everything better through analytics. If you can plant that seed in everybody in the business’s mind and they start to think about how you can apply analytics to the particular problem they have, this has become the byword to what we’re trying to be.

Despite CEO Mike Coupe and Day’s shared enthusiasm for data, he didn’t have the best start in his new role and almost missed his first meeting with Coupe. Day left his passport behind for his first-day induction and was promptly marched out of Sainsbury’s Holborn HQ until it could be hotfooted over by his daughter, an experience that demonstrates the culture of equality across the business, according to its new CDO. Passport delivered, Day got to sit down with the CEO as planned on day one, who told him:

We're a really simple business. We buy stuff, we take that stuff, we put it in supermarkets, and hopefully we sell it for more than we pay for it. It’s as simple as that, we’re like market traders.

By day two, Day had discovered the business is actually “fantastically complicated”, with 190,000 employees, 40,000 products, 1,300 stores, a franchise petrol business, a bank, a pharmacy, a fleet of trucks and Argos. By day three, he was starting to see this as an opportunity rather than a problem:

In the complexity of the business, what I started to realise from a chief data officer’s perspective and from an analytics perspective, there was just loads of opportunity, literally opportunity everywhere. Whether you’re talking about the farm or the process through to the fork, there was opportunity to apply data and analytics to create value for our customers and for our business.

These opportunities could range from how data and analytics could help grow tastier lettuce, or produce better milk by looking at feed regimes for cows; to how Sainsbury’s prices products, gets items to stores, arranges merchandise, and manages customers through the digital journey. Day notes:

In a business that turns over close to £30 billion, you only have to move some of those small levers a tiny bit to make a significant difference.

Six months into the role, Day has overseen the creation of a data center of excellence, moving 60 staff in the new team, and has created a data lab function “with a mandate to innovate at the edge”. He explains:

In big organisations, quite often innovation gets killed by what people would describe as corporate antibodies. Increasingly organisations are trying to find a way to innovate without necessarily having to change the entire business.

We’re trying to innovate at the edge. We have a small team of people, it’s cross-functional that we kind of keep clear of everything happening in the day to day business. Their remit is to just try stuff.

This could involve talking to farmers about how to get better data to grow better lettuce, or investigating putting sensors on the side of fridges that can predict if the fridge will break down to provide better customer service.

Day has also already identified Sainsbury’s “moonshots”, the big game-changers that potentially could make millions of pounds of difference to the business, and is busy building teams around these projects.

One key programme of work is a data lake environment, which is already processing 300 transactions per second from tilling sessions, data hungrily being grabbed by the retailer’s data scientists. Day is also focused on building up an enterprise community, bringing together the 600-700 people working around analytics or data.

This is essential. As Sainsbury’s and other big firms hurry to appoint CDOs and start taking advantage of all their precious information, Day calls on businesses to work harder to understand analytics:

Increasingly one of my contentions is that for years, we’ve talked about the fact that we have to educate the analyst community to be able to talk to the business. I think today actually, with the coming of data and analytics driving every part of the business, increasingly important is the business starting to be able to talk the analytics language.

Lessons learned

Day says there are some lessons learned from his first few months at Sainsbury’s that can apply to any job, not just CDO.

Spend time listening to people. During his first two months, Day took 650 pages of notes and met with over 200 people, many of who had worked in the business for 30 or 40 years and had a huge amount of knowledge worth garnering.

Make yourself available. The hours between 9 and 5 are not your own. This might mean your output is pretty much non-existent for the first couple of months, but that’s ok.

Find time to think. After 65 days, Day locked himself away and distilled everything he’d learnt into what he needed to do.

Take a breath. Balance the desire to move quickly with bringing the business with you.

Manage expectations from day one. Day says he succeeded in selling the data vision to the firm, but that led to a ton of demand that needs to be properly managed.

Time is valuable. Day admits he probably spent too much talking to suppliers, especially recruitment people; he should have first worked out what he wanted to recruit and then talked to them.

 

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