Nick Lansley of Tesco’s is a particular favourite blog of mine and reading his latest blog post on Ocado scraping the Tesco website proves a fascinating insight into how technology is fueling the competition within the supermaket sector.
At the Retail Week conference, Ocado CFO Andrew Bracey admitted that they scrape the Tesco grocery site in order to get Tesco prices with which they price match with 8,000 of their own products.
Sitting in the audience, I was intrigued by Ocado’s admission that they scrape our site (that is, run scripts from client machines that mechanically operate our web site pretending to be a human customer. Such scripts will loop through every department, aisle and shelf, and then harvest the text of all the products that appear on the page).
Only recently I would assume supermarkets would have to rely on specialist agencies to track their competitors pricing with people visiting the shops and recording the costs (I’m certain this still takes place). In such a manual process price data could take several days of lag before moving through to the finance and pricing teams. With server based scripting however data gathering time differential could be reduced to hours and minutes.
As Nick points out the Tesco pricing being scraped by Ocado is not quite real time but I would assume the data is accurate enough to produce exception reports to the Ocado buying, pricing and store management teams that could quickly adjust the pricing. Indeed the process could be taken one stage further and potentially automatically update pricing to reflect competitor pricing.
This example typifies how crucial technology is to a company’s competitive advantage. The ability for a company to generate and capture large data in real time dramatically effects the potential to gain sales and market share. To highlight a negative example on how IT can effect the bottom line the recent sad end to Auto Windscreens was reportedly due to a mis-performing IT system that was delayed and then did not function correctly when released.
The message for me for crucial to any board of directors. Where ever your CIO sits make sure he or she is fully embedded within the strategy and operations of your core business. They can literally make or brake your business.
As a quick aside I wonder if the next generation of cloud computing will see providers such as Google and Microsoft storing company data with offers such as Office 365 and Google Apps and then providing the stored data back to the company in real time with business intelligence applied?
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