Every Little (Bit of Innovation) Helps: Chatbots, Digital Twins, Autonomous Stores, and Drones with Tesco

[00:00:06] You're listening to Retail Disrupted, a podcast that explores the latest industry developments and the trends that will shape how we shop in the future. I'm your host, Natalie Berg.

[00:00:18] Today's episode is brought to you by Centric Software. Centric Software provides an innovative and AI-enabled product concept-to-replenishment platform for retailers, brands, and manufacturers of all sizes.

[00:00:43] As experts in fashion, luxury, footwear, outdoor, home, and related goods like cosmetics, food and beverage, and multi-category retail, Centric Software delivers best-of-breed solutions that optimize planning, pricing, design, product development, sourcing, and production. In a couple of weeks, Centric is hosting a retail event here in London. It's called Centric Connect 2025.

[00:01:11] I'm going to be there. I'll be giving a talk about retail trends, and there are lots of other things happening on the day as well. We have some exciting panel discussions planned. There'll be live demos of AI technology. And of course, there'll be the opportunity to network with your retail peers. The event is on March 13th. If you are a retailer and you're interested in joining us, you can get in touch with me directly or have a look at the show notes.

[00:01:39] And I will make sure to include the registration link so you can check out the agenda and register directly there. Okay, on to today's episode. I am delighted to have Jane Musto joining me on the podcast today. Jane is a Senior Technology Director at Tesco. She's held various global management positions in both the retail and financial services sectors.

[00:02:04] Her roles have encompassed enterprise functions, investment banking products, wealth and investment management, and corporate banking products. Jane recognizes the significance of technology and data as pivotal drivers of value. Currently, she's responsible for corporate functions technology, overseeing all aspects of technology delivery from strategy and product development to engineering and operations.

[00:02:31] Jane's also responsible for Tesco's Technology Innovation Labs, which is a team dedicated to pioneering future advancements in retail. Jane, welcome to the podcast. I am really looking forward to getting your views on technology and how it's going to be. It's impacting grocery retail. Our listeners will be very familiar with the Tesco brand, but they might not know as much about Tesco Labs.

[00:02:59] So to get us started, Jane, can you tell us more about Tesco Labs and how it sits within the wider business? Yeah, great to be here first of all, but yeah, let me talk a little bit about Tesco Labs. So Tesco Labs was set up a while ago now really to look at innovation in the retail space and new tech innovations.

[00:03:19] And to really have a space for us as an organization to look at things on horizons that are much further out than we would normally in our day jobs. Experiment with things that we don't necessarily want to use in the future, may never use, but actually gives us a chance to look at things that are coming down the pipeline and applications of things that actually sometimes you never think you might use,

[00:03:44] but you might very well once you've seen how it works and what it could potentially do. So I think that the Labs is a small team, but a very effective team that works across the group of Tesco to see how it can look, like I said, on multiple horizons out into the technology landscape and see how it can affect what we're doing today. Sounds super interesting. Now, Jane, I'd love to hear more about your role because you are relatively new to Tesco and new to retail. And I know you spent a long time in financial services.

[00:04:14] And of course, this is a sector that's also undergoing a huge amount of transformation. So I imagine there's a lot of crossover, especially when it comes to things like customer experience and keeping things relevant for customers in this digital era. So can you say a few words about your current role and maybe how your past experience has shaped this?

[00:04:34] Yeah, for sure. I mean, look, the current role, as much as I look after Tesco Innovation Labs, which is a privilege in many respects, I also look after something that they call enabling functions in Tesco, which is actually more internal focused. You know, it's looking after those big enterprise wide functions, whether it's people related to technology, finance, legal, property, tax, you know, those type of functions that enable the business to operate.

[00:05:00] And actually, for me, I moved into that space probably now about seven, eight years ago. Before that in financial services, before that, I'd been much more aligned to financial products, you know, the traditional equities, equities derivatives.

[00:05:12] But I think the one thing I would say, and it's the one thing that is palpable moving into a retail organization like a Tesco from a Barclays is the customer and the products that you're selling, the tangible nature of the shopping experience, but also that day to day interaction with the customer.

[00:05:32] And whether it's in a job where you're looking inwardly at the functions of the technology and supporting our colleagues, of which, you know, in Tesco, we have over 300,000, to enable them to be the best that they can be is all about making that customer experience the shopping trip the best it possibly can be by giving them, you know, whether it's the right information at their fingertips, whether it's time back to do the things that they want to do, become more knowledgeable in the products that they are interacting with.

[00:06:01] So, look, there's a lot of transferable things in technology, as you would expect. And I often find it interesting when you work, whether it's in a front online digital domain, in functions, in financial services or in retail, lots of the technologies are the same. And actually, lots of the applications are the same.

[00:06:22] Where it becomes, like you said, very different and very powerful is the market that you're in and that closeness to the customer, which I think for a retailer is something that you, like I said, feel every day. Yeah. Yeah, that's so interesting. And that leads me nicely to my next question, which is about your mission statement. Because before our conversation, I had a quick look on your website. And I'm just going to read this out for our listeners.

[00:06:46] You say, we embrace and navigate uncertainty, leveraging emerging technology to disrupt and create the future of retail with our customers and colleagues. Now, that, of course, sounds very exciting and incredibly relevant for this podcast. But it also doesn't really sound like something you would hear from a supermarket. And I mean that as a compliment. So can you tell us more about Tesco's relationship with technology? You know, how important is it to the business? How has it evolved in recent years?

[00:07:16] Look, it's massively important. I think Tesco has got a bit of a heritage in being a build organization. So they build a lot of the products that we own and use with our various departments, whether it's in distribution, whether it's with the customer-facing technologies. We, of course, buy products as well. But predominantly, we've been very much looking in the build to give us the flexibility and the platform to enable our scale.

[00:07:43] I think, you know, if you look at every stage of that shopping trip from the fulfillment all the way to the serve, it ultimately is underpinned by technology.

[00:07:54] And the small percentage differences that you get in that technology being the best it can be, whether that's producing products on the shelves and the availability of that product, whether it's, like I said, making the colleague more effective by being in the right place at the right time with the right number of hours to support the shopping trip. Then fundamentally, technology underpins all of that. And I think as a business, Tesco has really embraced that.

[00:08:21] The business leaders have really embraced that to make it where it is today. Yeah. And I guess, especially in grocery retail, sometimes it's those marginal improvements that make the biggest difference, right? Whether it's an improvement to on-shelf availability or, as you just mentioned, making your colleagues, you know, enabling them to operate more efficiently. You know, all of those tiny changes can really add up to significant change on a wider scale. Yeah, for sure.

[00:08:46] I mean, if you think of the scale, the sheer scale from an employee base, like we said, of over 300,000 colleagues, every hour matters. Yeah. If you think of the availability, every percentage matters to the tens of hundreds of thousands, millions of products that you're selling week on week. And, of course, availability, as an example, is key, right? If you don't have the product, the customers don't get what they want. And so it's as fundamental as that. So, yeah, absolutely. Those small improvements make all the difference.

[00:09:14] But to do that, to your earlier point around being disruptive and looking at new technologies, that's what we're always having to look at. How do you get that marginal gain? Yeah. So on that topic, I know you describe your projects as typically new to the world or new to retail. So can you give us any specific examples of innovations that have allowed you to better serve your customers or your colleagues? Yeah, of course. I think looking from a lab's perspective, like I said, we very much are always looking at the horizons.

[00:09:42] And over the last few years, and I'll talk about things that have almost progressed to what we would call graduation on a working in life at the moment. But we've had, whether it's a mobile app for our store colleagues to help them sort of understand where products are, the availability of that product, where it might be. Is it in the stock or is it on the shelf? What's in the product? You know, details about that product, whether it's on promotion.

[00:10:06] So this app that we created really is a godsend to colleagues when they come into store and customers are interacting with them and asking them questions. It's very difficult to know in these very large stores where everything is and necessarily if you've even got the product available and how it's constituted and is it on offer, for instance. Whereas that puts everything at the fingertips. So I think that was a great example.

[00:10:30] And personally, we all have to do something called food on the floor every year, which is a great time for us to go out into stores and use them for someone who's not in stores doing that every day. I tell you, it's a lifesaver. But it's great for our customers because it gives them the information they want. The other side is things like Little Helper, we call it. It's our chatbot for our customers, where with the advent of Gen AI and new technologies, which are fundamentally changing everything, really.

[00:10:58] We have introduced, of course, using that and leveraging that type of technology to help with customer queries in a much more personable and much more accurate way. And it saves them time. It takes away that waiting in a queue to talk to someone when actually quite often the query can be resolved much quicker. And so technologies like that have really helped. And then we've got things like GetGo and our frictionless shopping, which, of course, is a completely different experience.

[00:11:26] And actually more of an experiment. You know, other retailers have also done this with Amazon. But I think what we did was, you know, we rolled this out to really understand how that would feel for us shoppers, what that would mean for us. How do you operationalize something that is completely different to the normal shopping trip?

[00:11:47] And then all the way things like Digital Twins, where we were looking at how do, back to the sort of efficacy, how do we make our stores as optimal as possible, both from a flow of customers and where we put products to a serve of our customers? And how and where and how many hours and where those peaks and troughs are across the across your estate? So lots of different examples there and lots of different technologies, some that have been around a bit longer, but maybe the application is different.

[00:12:16] And some that, you know, are more and still actually being developed, if you think of computer vision and some of the things that we use at GetGo. Yeah, it's so interesting because, you know, the pace of change is just relentless. And I think what's really interesting is how technology can be used either to fix problems or to make things better and enhance the experience. And so, you know, on the one hand, yes, you can, you know, improve operational efficiencies, which, as we said, as we've already said, is huge for grocery retail.

[00:12:46] But on the other, there's opportunities to, you know, do things that we didn't think were possible. I guess my question to you now is how do you separate hype from reality? Because there's so much happening. There's, you know, there's things like AI shopping agents, there's drones. There's other things that we thought might have accelerated and then have kind of quietly fizzled or maybe morphed into other things. So just off the top of my head, I would maybe call out voice commerce or the metaverse here.

[00:13:14] As a retailer with limited resources, how do you prioritize what you invest in? That is a big question, Leslie. I mean, it is one of the bigger challenges, right? Because there is so much at the moment. And it is really changing at pace, you know, month to month, week to week. The improvements we're seeing, certainly in the gen AI space, certainly how other vendors and products are being developed at pace as well in the market.

[00:13:44] And I mean, if you look at the plethora of now AI tools that are available, it's quite phenomenal. And of course, you could spend your whole time just researching and looking. And I think being super clear on the problem statements that you're looking to solve for and being quite purposeful about what is important for Tesco, for the customer, and what really we are trying to achieve for our customer is where we will focus some of our tech.

[00:14:11] Now, we'll always probably spend 10% in a labs environment, maybe up to 20 on things that actually are a little bit out there, a bit wacky that we don't actually know much about. And nor, like I said, may come of anything. But unless we have an eye on some of these broader things, we miss out potentially on something that might be actually the one thing that would really help. But I think on the nearer term, the five-year sort of horizon, if you look at that, where the technologies, you know, we talk about hype.

[00:14:41] There is loads of hype. But within that hype, of course, there's a lot of reality. And whether it's reality about now or in the next three years, it's coming. And so I think from a labs perspective and just trying to work with the organization to ready ourselves, it's learning now as much as possible about groups and products. So whether that, like we said, is a computer vision, whether it's things like Digital Twins, whether it's Gen AI,

[00:15:08] whether it's actually how is that going to enable us all to do our jobs in a different way? You know, how are they going to co-pilot with us? What does that mean for office colleagues? What does it mean for store colleagues? You know, and I think it's a really interesting proposition in Tesco because we have such a range of colleagues. And the work that we do is so broad that actually what we try and do, of course, is look at those.

[00:15:33] Like I said, the problem statements where we are going to gain the greatest value, either from a value generation growth, things like personalization, hyper-personization for the customer, or where we can make ourselves more effective and efficient so we can reinvest back into the business, which ultimately does end up with a customer, right? So I think it's being specific and we try not to tackle everything. I think that's, you know, like I said, a small team.

[00:16:02] Yeah, and I think something I heard at a retail event last year that really stuck with me was that you can't do 100 things brilliantly, right? You have to kind of know, you know, who your target customer is, what their needs are, and go after that. Yeah, absolutely. Something else that comes up a lot on the podcast is how cultural change is required in order for such huge transformations to take place in these large organizations.

[00:16:29] So retail leaders often talk about the importance of agility, adopting a test and learn approach, failing fast, you know, throwing ideas against the wall, seeing what sticks. How would you describe the culture at Tesco? And has the culture evolved in order to keep up with all this change? So, super important. I mean, I think it's the make or break, actually, of a lot of organizations.

[00:16:55] And knowing what that culture needs to be, I mean, and each culture should be different for each organization, right? But what is it makes it work for that organization that allows us to be, have the business agility that you want, but at the same time enables you to operate with real efficiency and effectiveness. You know, in low margin businesses particularly, you know, you can't take your eye off the core, right? That is your engine.

[00:17:21] And so I think, look, but the world is changing around us and that core shopping experience, shopping trip is evolving. And to your point, we have to remain and have that business agility to enable us to stay appropriate and relevant for our customers. So what we're lucky with, I think, in a store environment is that test and learn approach is very prevalent, right? You can take a store, you can trial some of these things.

[00:17:48] And we are lucky enough to do that, to really experience, you know, it doesn't matter how much testing you do outside of an environment. What does it really mean? You know, what happens actually with a real customer? And of course, look, I'm sure, you know, with the likes of digital twins and simulations, that will only improve as well and help us get better. But it's nothing like being in a physical store and testing that or online with your A-B testing. But we have the luck and the environments to allow that to happen.

[00:18:18] So that's the first thing that I think we can do. Secondly, I think back to that low margin business, we are and the business leaders are very clear that every little helps, literally. And for them to find ways, you know, they run a machine that's operationally brilliant. And I think, you know, one of the things that's always challenging when you are running something so well is how do you find that marginal gain?

[00:18:44] But that makes all the difference and keeps us going and keeps more investment coming into the new things that are coming. And I think, again, that is a cultural thing where they're willing to try something, willing to give it a go. And not everything works, right? I mean, by far the case is half of the stuff in labs, if not more, 70%, I would say probably 60%, 70% don't really graduate. Maybe it's too early. You know, you talked about drones. We absolutely trial that.

[00:19:10] But they and in essence, it sort of makes sense it should work. But it's really complex. And right now, that's probably not the case. Will it always be that way? Maybe not. We learned a lot. And actually, we'll revisit it maybe another time when it's right or matured even further. But I think the culture part, I think it has to come throughout the organization. And like you said, you have to create the environment so you can absolutely test and learn. Yeah.

[00:19:40] Yeah, because you can't have innovation without failure, right? Failure is a part of it. Yeah, absolutely. Jane, as a female leader in tech, I'd love to spend a few minutes discussing how we overcome some of the very real barriers that still exist today. What's your approach to empowering the next generation of female tech leaders?

[00:19:58] It is absolutely with a focus on all different types of gender, whether it's gender or ethnicity or whatever group that's probably underrepresented, actually, in where you grow up, live, etc.

[00:20:12] I think it's really important that we have the right processes, the right culture again to discuss and openly discuss how we do attract and retain talent from all sorts of diverse backgrounds. Socio-economic as well. It's all sorts.

[00:21:04] I think it's really important. It's one in, one out. One in, one out.

[00:21:34] And that, I think, for lots of organizations is where there needs to be more focus. And I think that we are in Tesco. It's never perfect. It's never done. And I think we are very aware to it and talk a lot about it. I think, look, for tech in particular, I think the world of AI is going to change the whole landscape for everyone. And it has the opportunity for me on the positive of being an absolute leveler.

[00:22:02] And I think it will allow all sorts of individuals from all sorts of backgrounds to work alongside another being, or whatever we want to call this thing, to help us be the better versions of ourselves. And I think, actually, it should open up the global platform, but also our world of work in a very different way to the past, where traditionally, maybe we all had to go to a university. We all were expected to get certain exams done.

[00:22:32] I genuinely think in 10 years, 20 years, the education systems, the way of working will have fundamentally changed. And therefore, we will be looking for different things. And I think this is technology is a way to do that. And I hope, as a result, and the types of technology skills you'll want, you'll still have some that are the same, but the types of roles will be changing dramatically. And they will be new. And so we won't have preconceived ideas of what you have to be good at or what you should be good at.

[00:23:01] Actually, they're going to be created almost by the new generations coming through. And I hope with that, that they create a world where actually that is open to all, irrelevant of gender and any other group. But I generally think it's an opportune moment, I think. That's a really interesting take on AI. And I love that, the fact that we're seeing this democratization of technology almost in real time. Yeah.

[00:23:28] And the positive aspects of it, you know, being in an enabler, being something that will break down those barriers and level the playing field, if you like. So really interesting stuff. Now, just as a final question, I'd love to know what advice you might have for your younger self. What have you learned or experienced that might help tomorrow's female leaders? Be less apologetic. Be clear about what it is you really want. And that's all sorts of things.

[00:23:58] That might be career progression. It might be trying different roles. It might be doing something particular. But own it and do it. And be brave enough, I think. And confident enough to say that. And I think, you know, it's sometimes harder with styles and everything else to have a voice. Get heard somehow. That doesn't mean you have to change.

[00:24:25] It doesn't mean you have to emulate or mirror. It just means you have to find your space to do that with the people who will listen. And there are always people. You know, I've had amazing opportunities with bosses throughout my career who have listened. And I think if you can find that it doesn't always have to be your boss or someone in the organization that you work in, then get the moment with them. But don't be apologetic for what you want.

[00:24:59] Thank you for listening to Retail Disrupted. If you enjoyed this episode and would like to support the podcast, please leave a rating or review or share it with others. It really makes a difference.