But I generally think the decisions they are able able to help us with will get them bigger and more useful. I also do believe humans will still be there and will be absolutely needed. Hello and welcome to the Retail
podcast. As part of our deep dives into supply chain, following the Doctor Richard Wilding's fantastic episode where we were talking about bimodal Zoomodal's supply chain, I thought it would be interesting to take a look at what one of the largest, oh, sorry, the largest retailer in the, in the UK is doing and also one of the largest across the
globe. And I'm fortunate enough to be joined by Doctor Oliver Wok from who is the CEO of Transcend, wholly owned company of Tesco's. Is that right, Oliver? That's right. And and do I refer to you as Doctor? No, please go on. I'm Oliver. OK, fantastic. Well, welcome to the show, Oliver. Your ex Amazon, you were, but you've been at Tesco's. But maybe if you can just take us through your career, what's
LED you to this moment? And then we'll talk about Transcend. Yeah, so thank you for having me and really excited to be here. I spend most my, my working life in this space, right? Start my background, this, you know, in, in statistics and economics. I, I got the, the, you know, the retail back when I started working for Amazon and spent many, many years there in
fulfilment and supply chain. But then joining, you know, Tesco in one of the the leaders in in grocery and grocery is always regarded as the most, although the the most complex operations in supply chain. And it's been a fantastic journey within Tesco ever since I had multiple roles in here. But my, you know, the the most excited 1 to date is the CEO of Transcend. Transcend to say business.
We, we launched a little while back, we only, you know, talked about it now since 2-3 months in the public, but we are offering the the tried and tested solutions which Tesco has developed over many years to other retailers in the world. So when when you're talking about this, what's the lens that you're using to talk about supply chain?
We like like to focus on on data on having really, really good systems in place and, you know, having the best visibility you possibly can on what is actually going on and supporting the people in in the supply chain. Now, what do I mean by that? Supply chains are alternatively operated by people and people make decisions all the time. I am a great believer of supporting those decisions with the right systems, with the
right tools. Take as much as those decisions away to make, you know, remove the cognitive load and let you know machines where that you know that's possible make make those decisions for them. Quite often those are better than many, many hundreds of thousands of individuals taking certain decisions which are non coordinated. Having the right data to support that decision making is critical
though. I am and the big believer that if you have these things present, you can have a far more standardised outcome, which ultimately we would for more predictable supply chains, more predictable operations. Then the results will come, the the accuracy will get better, then the execution is better. And you know, it all starts with data and having the great, great systems in place to to support people. I got you.
And one of the things I've noticed is how obviously different SAS providers, you know, whether it's your fulfilment centre, whether it's picking from store, whether it's the final mile or, or the OR even micro fulfilment centres. Sometimes you see as a retailer, I'm challenged because I've got 15 different softwares that I'm running for each each component of my supply chain. How, how does that? How's that for Transcend app or what? What is it? What's the secret that Tesco's
has cracked in that space? Tesco has been in this space for so long that you know, we you know, we look at our online operation. We our claim to fame is that the first online order was placed in 1984, a lady called Jane Snowball who placed a, a grocery shopping through the TV through, you know, dial up version of the TV at that time, right. So andtesco.com is, is online since 2000.
So it's, it's been pretty much near 1/4 of century that we've, you know, been in this space, you know, with, with ever growing volumes and the systems were never readily available for us. It was of such critical importance to have the right tool. So we ended up developing many of these ourselves. The moment something is at the core and it makes sense, we want to own the, the logic and, and the software ourselves and the
systems solutions ourselves. And that over time has developed into, you know, quite a, quite a extensive landscape of solution. Tesco operates all over the, you know, the supply chain stores online network. It's about putting, you know, your, your, your very specific grocery knowledge and, and taking it into your own hands. Grocery is very specific. And if, if not the right tools are out there, then it was very important to us to build it ourselves.
That then has, you know, LED us away from, you know, having such patchwork of many, many different solutions and starting to tie them more and more together, which is what we are now quite proud about and and want to share with others. What's top of mind right now? What are those big things that are top of mind? I think most retailers have this conundrum of growing further in a very, very competitive market and Gross quite often comes from an online channel.
Online is a is here to stay. It's been growing, you know, in most countries across the world. If you look at the UK, it's a very, very prominent vocal market when it comes to to online shopping and very predominant here. How that is something you can and want to grow seems to be a, you know, a headache because quite often the online operations are not that easy. They're not very straightforward, yeah, but they might not have the best customer experience. They might not be very, you
know, cost efficient. And growing something like that is a need, but something people don't want to do because it is so challenged in so many ways. So for many people, I think the question is how, how can you relieve those issues? How can you make a much better customer experience? How can you step change your cost base so that growing that
business is fun again? Because if you don't, other people might, you know, take that online share and eventually that might even hurt the, you know, the total growth of the business. You know, the growth has got to come from somewhere and getting it through the online channel is usually one way forward and the predominant way forward at the moment. So when you marry up, obviously normally when I ask leaders, what do you want to do in your business? Are you looking?
Obviously pre inflation, it was all about saving money, right? That was like, because I, I sorry, it was about making money before the inflation crisis or cost of living, I would say to CEO, do you want to make money or save money? They'll say, well, I'm not going to be famous for saving money. I want to make money, right? I want to grow the business. Then obviously inflation hit and everyone was like I need to find another than 1215%. So efficiency sort of came up
in, in the ranks. Did you see them balanced in terms of for example, I don't know last mile delivery, driving efficiency in that or driving more better and shorter delivery times? So Mike, because what you were saying there, happy customers, more customers spend more because obviously we're providing a better experience than that. Where is it? Is it, are they 5050? Are they?
You can definitely get both. I'm, I'm, I'm a firm believer that if you get the efficiencies right and if you're never satisfied with where you are and continuously improve your systems, your processes, it will be the enabler to further growth. And now how, how that's invested depends on, on, on, on, on every single situation. But, but broadly, you know, everything can be more efficient and particularly in in the online space, there's huge efficiency still to be had. Yeah.
And, and reinvesting at least some of this into your growth is for sure the right thing to do. My worry is that if you don't go after the growth, someone else will take it because it is a highly, highly competitive market. What's your opinion on fulfilment? I just I'm just curious on your opinion in what what's better? Do I allow picking from store or should I be looking as a as a retail organisation building more of my dark stores or or my fulfilment sensors? There is a place for all of
those things. The beauty of a dark story is that they are close to the customers. So having short lead times, same day or even faster is usually only enabled at scale across the whole country. If you utilise your stores, you have got other great benefits. I mean the people already there, the inventory is already there. But as you say, it's about how to use that and effectively so you know that with labour cost, particularly labour availability, you get the most out of that store.
Having the right tools to do that job, having the right solutions can and will make your stores a great way to fulfil. However, in larger urban areas and in big cities, having, you know, perhaps a, you know, a stand alone facility, perhaps even automated facility can absolutely make sense just because of the sheer volume. Eventually you can overload a store, I guess too much volume coming out of it. Eventually you might end up not having enough labour to keep
picking manually from store. And then in those selected cases, in those select locations, automating that journey I think is absolutely the right thing to do. However, you'll have to have enough volume to do it. So for for a handful of orders. Usually the balance does not stack up in order to to invest into the capital outlay you'll need for some of these these solutions, you'll need a big
enough problem to to solve. Until then, a manual operation, I think is the right thing to do, particularly when you talk
immediacy, right. So when you talk now, right, 30 minutes, 20 minutes utilising, you know, the smaller stores which you know many retailers have got many of very, very dispersed across the countries and and cities gives great fulfilment points to deliver, you know, pick an order in 10 minutes, deliver it in 10 minutes, something which as you know, a standalone single facility in a larger city could never do. They're great for saying next
day volume in the vicinity. They are not great for immediacy. That's why there's a place for all of it. There is there has to be a balance. For most retailers, having a very, very efficient and in store operations step, changing that is a good way forward into the growth until you're very sure of your volumes and then you can start automating into more centralised other facilities if needed.
Well, one of the things I've been super impressed by Tesco's compared to, you know, I won't name the US sells food, but main food is not its main business. It's a big box retailer. Is the fact that out of stock at Tesco seems to be managed so well, right? You're, you're fulfilling, I don't know, like 1.3 million weekly orders online. But when you go into store, yes, there there's always a there was always that product that that may be out of stock.
I'm just curious in terms of Transcends, because you said it's about the data, how much, how deep do you go into that like in terms of shelf edge availability, is that like another system you're, you are all about the logistics about the, the, the products? Yeah, where does it start and stop and the data outcomes? I'm a, I'm a great believer that every, you know, system you have, let's say, to pick the
items. Yeah, has to be 100% embedded into the store environment into into these operations. So if your operational clock is not aligned right and you'll start picking because before you've replenished, you know, these are very easily avoidable, all guards. So what we typically do is not only provide a software solution, but to embed this solution into the stores in a very, you know, purposeful way. So an, an operating clock is, is one of them, right? Training for the colleagues is
another. And obviously then providing the right data as a, as another very, very helpful tool to, to make the store better. What we see is that stores with an online operation usually are better performing stores as a whole because they get better information from your online customer, right. If an in store customer doesn't find a certain product, they might not tell you about it.
Your online customer will. And as you get this information because your picker can't pick the item, it is on to you. How you manage that will provide all of this information and ultimately the in store customer will have a better customer experience, installs with an online inspiration because you provide the store manager and the local team with more data.
How do you utilise that? What you make out of it and all of that comes with it. Any you know the greatest software in the world is never as good as it could be unless you embedded properly into the environment, and that's where all of these things come to line. So then do you maybe I should have we should have qualified this early on the conversation. So it's transcend then you're looking at the strategy as well as like, you know, best practise
as well as technology, right? It's not just pureplay technology then is that is that is that I understand that correctly? That is right. We can help with strategic thinking in this space and and can consult retailers on on their journey and you know how they want to develop over time. That includes 510 year plans. That's going to be an investment plan that you know, that can be bought packs. That can be all the things you need to consider as you embark on this journey.
As much as we provide, you know, software solutions, hardware solutions for micro fulfilment, right, and all these things along the whole and all of that underpinned, where is operational consulting. We'll train the people, we'll be with you install, we hold the hand along the whole journey. It is not just software by any means. Tesco's has done such a fantastic job globally and you know, is a beacon that people look to, especially in these areas. What's that one metric for you
that's a sign of success? As you know, maybe looking back in your old supply chain, what was the one thing that you always try to achieve? Is this speed of delivery? Is it is it a data point that people haven't thought about? I'm just curious. Customer action CSAT stores What is the sort of. Measures cumulatively, it's the
customer focus, right? You, you have to have a, you know, and whether you measure an NPS, whether it a seat, whatever number you're looking at, the customer satisfaction will be what the, the most telling outcome of it or now there are many leading and lagging indicators and all these things. But alternatively, if your customers like what you do day in day out, your business will grow.
And starting there with, you know, with a customer in mind, working backwards through the proposition into the execution, you know, every single day if the customer is happy, you can manage the cost along the process, you have the right tools to do the job, the growth will come. What I'm curious about is a vision of the future over the
next five years with robotics. With so much different positive technologies and solutions coming into the retail space, what's your vision of the future if you were to paint it rather than not? Not where will would be, but what what the possibilities? What do you think? We, we spoke at the beginning over supporting the individuals,
the humans in this process. And I think that is already something we do quite well by supporting with the right decision making so that the execution day-to-day can be so much more streamlined, standardised and so much easier for the people along the supply chain. And I think the tools will be more and more capable to level up the decision making and supporting individuals. The people will never go away, but having a better foundation
for making, you know, decisions. And eventually, you know, the, the degree of strategicness of those decisions will increase as we get into a world where the tools can be ever more capable of making larger decisions. So that it isn't just a yes or no, this or that question, but a, a more broader approach on, on, on strategic. Now that might be 5-10 years out, but I genuinely think the decisions AI will able to help us with will get a a bigger and more useful.
I also do believe humans will still be there. And yeah, human in the. Loop, the word that I learnt that I love. I never knew that phrase human in the. Loop OK. So, Oliver, one of the things that obviously has been on my mind as we've been talking is about my data as a grocer. That's my business, right? I live and die by the data my
business is creating. And you know, whether it's in Europe and USI don't think Tesco's will will be a direct, maybe some sort of some places in Europe you may be a direct, but what's your approach to data? How do you protect me as a retailer and my my data as a retailer? So, so it is really, really important to us that data and all degree of information is absolutely safe. It is 100% kept away from Tesco. We are a separate legal entity, separate systems.
We will provide you with your own computing cloud instance. So your data is hosted separately, not shared with anyone else. So no other retailer can can get access to those to this. And you know, we'll, we'll take take great care of your data for sure. So then any of the efficiencies, any of the learnings that I'm getting from my data remain mine. Absolutely. They remain yours and we keep developing the solution and and any improvements we'll do, we'll
share with you as we go along. But your data is yours and is not being shared with any other retailer. Fantastic. Thank you so much for that. But where? Where can I find out more about you guys? So you can look at transcendretailsolutions.com where you find more information about us. You're very welcome to come and visit us in the UK and have a look at our solutions. Get in touch, we'll talk more about how you can see what we are doing. You can also come and see us at
the NRF. We will have a booth and we bring a bit of a demonstration with us so. Yeah, see the booth at NRF. Sorry. I don't remember to booth and and we can show you our solutions there and we'll have a, you know, a live demonstration going. So yeah, do come and visit would be great. OK, well, I'll, I'll, I'll definitely come and pop by and say hi, Oliver. Thank you so much. Good. Good luck and all the best for 2025. Thank you very much. Thanks for having me.