Tesco’s Successful Open Innovation Experiment

Published Feb-01-11

No matter how smart we like to think we are the crowd is smarter. Realizing this set Tesco on the path to boost its online grocery business via open innovation.

Tesco, United Kingdom

The Story:

Tesco’s Successful Open Innovation Experiment Tesco is an international grocery retailer, headquartered in the UK and like many of its competitors it has expanded into the online grocery sector. For a couple of years it has been looking at ways to instill some excitement into the now familiar internet shopping experience whilst also making it easier, faster and cheaper for its customers.

Creating applications is a time consuming and costly process so it decided on an open innovation approach to use the creativity and imagination of the crowd to drive innovation.

Day of Brainstorming

The retailer set up an open innovation jam, calling it the TJAM and invited interested customers to a day’s worth of brainstorming. Around 70 turned up and they were divided into groups headed up by a Tesco.com staff member.

To keep everyone focused and on the ball challenge briefs were issued to help direct thinking.

There were six challenge briefs in all:

1) Identify ways to make the online shopping experience better than in
store shopping
2) Identify ways to help customers save money on their weekly grocery shop
3) Come up with ways to harness mobile and emerging technologies
4) Provide customers with inspiration for their weekly shop
5) Make the shopping experience easier and quicker for customers
6) Look at how to harness the power of social networking

The day was divided into a number of different stages, the first being idea generation around the briefs. This produced an astonishing 800 coherent ideas within the space of a few hours.

“The day had a two-way buzz: 800 coherent ideas generated by customers, coupled with the anticipation of developers, to make them real.” Nick Lansley, Head of R&D, Tesco.com

Stage two was to flesh out one or a group of ideas into ‘walk through’ concepts where participants were asked to imagine how they would be used by the consumer.

The third stage was for participants to vote on the best idea across the board, which could be worked on by developers.

Open Innovation Winner

The overall winner was a device called the T-Scanner that a customer could have on their key ring. The imagined idea contains a barcode scanner that collects barcodes of purchases to build up a ‘favorites’ list of products for customers. Then before future online shopping trips the customer would insert the scanner into a USB slot on their computer and upload all their product ideas to a personalized Tesco grocery list.

The T-Scanner may be developed for consumer use, but the real importance of this experimental day was that it revealed to Tesco the value of open innovation.

Open Innovation Jams

The jam style of open innovation can deliver a successful outcome when the right partners and participants are selected so that they can work together creatively and dynamically. Participants can include consumers, a company’s own staff members and suppliers. A consequence of this variety of backgrounds is that a jam will benefit from the diversity of viewpoints of those taking part. In addition, an important member of the jam is the facilitator who is fundamental to creating a truly collaborative environment that is status free.

Ultimately the TJAM delivered fresh, exciting and practicable ideas to Tesco from external sources, at a fraction of the cost of the conventional in-house development process.

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