Tesco envisages robots and more self-service in future plan

Tesco presented its future plans for growth to investors and analysts at a Capital Markets Day on Tuesday (19 June), and it included growing use of retail technology to boost efficiency.

In a wide-ranging presentation – which hinted at the potential launch of dedicated upmarket Tesco Finest stores, opening over 100 additional One Stop convenience shops, a shift towards more plant-based ready meals, and growth of its Booker wholesale operation – technology plans played a key part.

A section entitled “Utilising technology to improve how we serve customers, to lower the cost base and to improve cash” went into detail about potentially expanding partnerships with Takeoff Technologies and Starship Technologies.

The retailer detailed opportunities to grow the distribution capacity of its eCommerce arm by 35%, which it said could be supported by developing a collaboration with Takeoff, an urban fulfilment centre provider. Takeoff says its technology can be placed wherever a business and its customers need it, and promises to reduce its customers’ last-mile and assembly costs.

Delivery robot company Starship Technologies, a company that Tesco has already been working with to trial automated urban delivery services, was also referenced as a potential partner of the future.

Analysts heard ways that Tesco is mapping out how it could grow its online business through changing its processes. In addition to the in-store picking and fulfilment centres it uses today, it was suggested that storage out the back of Tesco stores could be better utilised for serving online orders.

It also suggested the addition of bikes, use of drop-off lockers, and “crowd delivery” could help enhance delivery productivity by 15%.

Tesco’s slides to investors estimated there is an opportunity to drive £68 million in cash handling savings by migrating more of its in-store transactions to digital, be it via a consumer’s own mobile device or self-service machines that favour debit or credit cards. Tesco indicated it would look to move payments to digital “in line with customer demand”.