Why Sainsbury’s isn’t waiting for ‘big silver bullets’ to drive business transformation
An increased focus on data and analytics is allowing Sainsbury’s to solve problems faster and develop new ways of working to ensure it is agile, efficient and unlocking new opportunities across all parts of the business.
It is easy to forget just how big a business Sainsbury’s is. It has more than 1,400 stores nationwide, it owns Argos’s entire estate – 251 of which sit inside its supermarkets – offers its own banking service and has a loyalty scheme with more than 16 million members.
That’s a lot of customers, whether they are down the milk aisle or not, and with that comes a huge amount of data that the company admits it hasn’t leveraged to its full advantage until recently.
Earlier this year, Helen Hunter took on the role of Sainsbury’s first chief data officer. That means not only overseeing 800 people but trying to make sense of the reams of data the group has across every part of the business, right down to the supply chain.
The hardest part, however, is knowing it is a journey that won’t ever be finished.
“As a business we are creating new data all the time. New businesses are being created, new ways of customer shopping, so it will never be done,” Hunter tells Marketing Week, speaking at the Women in Data conference last month.
“But wouldn’t it be great if we could stitch together what Nectar understands about how customers travel from the Nectar travel partners, how the bank can understand who’s using travel money, how Argos can understand who’s buying luggage, and how Sainsbury’s food can understand who’s buying a load of sun cream?
“Surely there’s something in that which can really have meaning if we join it up. We’re starting to see the first signs of that coming to life.”
In a scale business like ours, it’s the execution of thousands of [small improvements] over and over again that drive transformation of the business.
Helen Hunter, Sainsbury’s
When Hunter took on the role in April – eight years on from when she first joined Sainsbury’s as head of loyalty – she says the business was failing at analytics because it was too siloed and not agile enough.
Now, Sainsbury’s is doing “thousands of small things” every day to solve new and existing problems within the business.
“Part of the benefit of working in this agile way is we deliver small incremental value very often rather than waiting for these enormous silver bullets that are going to change the world,” Hunter explains.
“We focus on both things: applying science and analytics to existing problems to make them faster to solve, as well as breaking new ground.”
This has included building stronger relationships with dairy suppliers to reduce milk wastage and developing a replenishment algorithm that is helping colleagues break down pallets more efficiently so they can spend more time on the shop floor with customers.
Hunter says there have been around 35 small improvements like this over the last six months.
“In a scale business like ours, it’s the execution of thousands of examples like that over and over again that drive transformation of the business,” she adds.
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In her previous role as director of innovation, Hunter was responsible for overhauling Sainsbury’s Nectar loyalty programme after it was bought from parent company Aimia for £60m at the beginning of the year.
Since April, it has been trialling a digital-first, app-based scheme in the Isle of Wight. As part of the test, Nectar customers have been receiving points based not just on how much they spend but also on how frequently they shop and how long they’ve been shopping with the retailer. They have also been able to choose their own offers online or via the Nectar app from a curated list based on the products they buy most often, earning points on these rather than on their total spend.
Now, with all the feedback and learnings from the Isle of Wight store, Sainsbury’s is testing New Nectar in Wales, much of which is being integrated back into the core Nectar proposition.
The digitisation of Nectar has also allowed Sainsbury’s to make the loyalty scheme more relevant to Argos shoppers. Just before Black Friday, Sainsbury’s rolled out ‘online redemption’ so Argos customers could redeem their Nectar points online for the first time; previously they could only be redeemed in-store.
There are clear opportunities for cross-marketing across both brands too.
“We tend to talk a lot about the marketing use cases but simple things – like understanding who’s using Argos home delivery versus who’s using Sainsbury’s grocery delivery versus who’s using our one-hour delivery proposition or smart shop proposition – that’s just quite useful from an insight point of view to help the business inform its proposition development.”
And of course, the proposed merger with Asda will undoubtedly have an impact, but Hunter says there haven’t been any conversations about this yet and it is too early to speculate.
The business transformation at Sainsbury’s is as much about people as it is technology and data, Hunter says. Her team plays a “really critical role” in upskilling Sainsbury’s business leaders, including its stakeholders.
As such, Sainsbury’s has developed a two-hour ‘data camp’ programme to train those at the top, although Hunter admits there is still a lot of work to do.
“As humans interact more with machine learning algorithms, it’s critically important they understand what those algorithms are doing,” she says.
“We’re not trying to train business leaders to use [programming language] Python but we do want them to understand what we do as a function and the necessity of real intimacy between the business question and the analytics being provided in the service of that question. There is a genuine skill and ability to ask the right questions so they can be solved as mathematical problems.”
You have to be able to make leaps of intuition and judgement too, she says, and join disparate concepts together and be able to tell stories.
“We can only really change the way the organisation views information if we’re able to explain it in a compelling way,” she concludes.