theibcdaily executive summary 05 The power of big data
“We may have 2 million unemployed in the UK, but we don’t have 2 million unemployed software engineers”
Bricks to clicks Michael Comish
CEO, Tesco Region: UK
Interview by Andy Stout
“When I set up Blinkbox I wouldn’t have said that Tesco was a natural exit for the business,” said Michael Comish, Tesco’s chief of digital entertainment.
“I was thinking of traditional
broadcasters or the internet growth companies. But they said ‘Here is why you’re going to sell your business to Tesco: we can tell you that of the 11 million people who bought a DVD last year, 6 million bought three DVDs or over and 3.8 million bought five or more. We have 16 million Clubcard customers and we really understand their shopping
needs and their behaviours, and on top of that we are one of the largest DVD retailers in the UK, we are one of the largest consumer electronics retailers in the UK, we have 3000 stores and 20 million people a week go through them’. Now that’s a hell of a pitch.”
Numbers like that do tend to be persuasive, which is how Comish now finds himself heading an expanding team of people who will be working in the company’s new North London campus when it opens for business this autumn. “Tesco is an absolute powerhouse of traditional retail and the next wave of growth they’re looking at is from their online stores. We are an important part of that strategy,” he says. Tesco has been using data analytics to understand the behaviour of its consumers, an
approach now being applied to Blinkbox.
“It starts with measuring our brand awareness and goes through to the percentages of people who register, buy and lapse on our services and where in the process that happens. We’re gathering information at each of those stages and combining that with focus groups to increase the level of feedback.” Comish sees Tesco as an
aggregator that will maintain the complementary role to broadcast that its DVD retail heritage suggests. That’s not to say it won’t expand aggressively – it has launched Blinkboxmusic and Clubcard TV this year, with Blinkboxbooks still to come – but he says the Amazon and Lovefilm business models, for instance, are different. “That’s not saying there aren’t opportunities for us
to be doing things exclusively, but commissioning and producing blockbuster television? That’s not for us.” There remain barriers to
progress though. “In the UK there is a
broadband issue outside of the city centres. Broadband is holding us back nationwide. It would be helpful to have a framework from the government, but I think free enterprise will pick up a chunk of it.” And then there’s the skills shortage, which is not simply a perennial problem for broadcast. “We may have 2 million unemployed in the UK, but we don’t have 2 million unemployed engineers who code software. It is very difficult to get the technical skills required to deliver these services. And that’s an issue for anyone doing anything with video and the internet.”
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