Tesco and AI

Managing Partner, Retail & Consumer, Neil was recently featured in an article by grocery industry bible The Grocer on the hot topic of Tesco’s Club Card AI. Tesco CEO Ken Murphy recently said artificial intelligence could be used to monitor how customers were shopping to help persuade them towards healthier choices. He said: “I can see it nudging you over time, saying: ‘I’ve noticed over time in your shopping basket that your sodium salt content is 250% of your daily recommended allowance.”

Read on for a Q&A in which he explains why AI has the potential to transform the shopping experience, making it more personalised, efficient, and enjoyable for consumers.

"1. How can AI personalisation feel helpful, not intrusive?

To avoid being seen as creepy, AI personalisation needs to balance helpfulness with respect for consumer boundaries. Transparency is key—if customers understand how and why their data is being used, they’re more likely to view AI nudges as beneficial. For instance, if Tesco clearly communicates that personalised offers are designed to save customers money or improve their health, the tech shifts from feeling invasive to feeling supportive.

Additionally, giving consumers control over how much they want to engage with these features is critical. Allowing people to opt in (or out) of certain nudges or recommendations, for example, empowers them and creates trust. If AI-driven suggestions are framed as optional tips or “helpful suggestions,” rather than directives, it’s easier for customers to see them as a tool rather than an overreach.

2. Do Consumers Know How Much Data Retailers Hold on them?

Most consumers are likely unaware of the full extent of the data retailers hold. While many people know their loyalty cards track purchases, they may not realise how much deeper that data goes—preferences, buying patterns, even potential health indicators.

Should retailers be cautious? Yes, they need to balance data transparency with reassurance. If consumers feel like their personal information is being exploited for profit or surveillance, this could erode trust. However, if this data usage is framed as part of a value exchange—”we use your data to provide you with better, more personalised offers and health tips”—customers are more likely to accept it.

Being transparent about data usage while highlighting the personal benefits (like savings, health insights) helps retailers avoid backlash. Consumers need to feel in control of their data, so it’s crucial to establish clear communication and choice.

3. Do Consumers Appreciate Being Nudged in This Way?

There’s a mixed response to being “nudged.” Some consumers will appreciate it—especially when it saves them money or improves their health or sustainable choices. For instance, being alerted to promotions on their favourite products or advised to make healthier swaps could feel like a personalised benefit. But for others, it may feel intrusive, especially if the nudges are too frequent or too personal.

For example, while I’d appreciate a heads-up on my favourite bulk buy of Mutti tomatoes running a promotion, I’d rather not be gently nudged for my weekly two multipacks of McCoy’s crisps habit. (Look, those snacks are for family sharing— I promise!). We’ve all been there when it feels a little too personal—like if I stock up on wine for the Christmas season (because we all know it’s “just for the guests”), and suddenly I’m reminded about my weekly alcohol intake. Thanks, AI, but let’s keep some secrets between me and my basket.

It’s also important to consider context. A nudge to buy a bit less fresh food due to fact I still have loads in the fridge at home can be practical and reduce waste. A health-related nudge as mentioned, however, might feel like judgment, especially if it’s not handled delicately.

AI nudges should be subtle, helpful, and non-judgmental. They should focus on practical, everyday benefits—like saving money or reducing waste—without making the consumer feel observed or controlled.

4. The Downside of Hyper-Personalised Ads and Shopping Experiences

Hyper-personalised experiences, while exciting for retailers, brands and shopper marketing agencies like us, have some potential downsides. On the one hand, they can make the shopping journey more efficient and relevant for the consumer, creating a seamless experience. On the other hand, there’s a risk of creating “filter bubbles”—where consumers are only exposed to products that fit into their current habits and preferences. This could limit discovery of new products and experiences.

Moreover, the relentless focus on personalisation might overwhelm some shoppers. Not every consumer wants to be nudged constantly (I certainly don’t), and over-targeting can lead to “nudge fatigue”—where people start to tune out suggestions, offers, and recommendations.

The key is finding the right balance. Not every interaction should be hyper-personalised; sometimes, a bit of randomness or exploration in the shopping experience keeps it fresh and engaging. I for one love that sense of unplanned discovery on a shopping trip.

I believe it’s important not to fall into the trap of thinking that consumers want to shop on AI autopilot. While AI can offer helpful nudges and personalisation, shopping experiences shouldn’t become robotic or overly controlled. I believe most people still want the enjoyment of discovery and a bit of spontaneity, whether it’s trying a new product or indulging in an unexpected treat (like that new Ben & Jerry’s Salted Caramel Brownie ice cream that definitely wasn’t on my list—oops!).

AI should enhance the shopping journey, not dictate it. The goal is to use technology to augment the experience, making it easier and more enjoyable, without removing the human element. After all, part of the joy of shopping—especially when it comes to food and drink—is the freedom to make a purely impulse buy or stumble upon a new favourite snack without feeling like you’re being steered by an algorithm.

5. How Far Could This Technology Go? Dystopian vs. Utopian Futures

On one end of the spectrum, this tech could lead to a utopian future, where AI acts as a seamless assistant that helps consumers manage their spending, reduce food waste, and even improve health. Imagine an AI that not only suggests better products but also adjusts to your changing needs over time—creating a sense of well-being partnership with the consumer. For example, it could alert you to eco-friendly alternatives or suggest recipes based on what’s already in your fridge, contributing to sustainability goals.

On the dystopian side, however, it’s easy to imagine a future where AI becomes overbearing or overly predictive, crossing privacy lines. An AI that knows your every preference and behaviour could feel invasive, especially if it anticipates your actions before you even make them.

Retailers need to ensure this tech serves consumers’ genuine interests rather than becoming a tool for over-commercialisation or profit-driven manipulation. Striking this balance will be crucial to gaining consumer trust and acceptance.

Closing remarks

The challenge lies in balancing innovation with transparency, control, and consumer trust. If done right, AI nudges can be seen as empowering; if mishandled, they could easily become the next privacy battleground.

As experts in food and drink marketing, we believe that AI has the potential to transform the shopping experience, making it more personalised, efficient, and enjoyable for consumers. However, the key to success lies in striking the right balance between leveraging data for personalisation and respecting the customer’s autonomy and privacy.

We will continue to work closely with brands and retailers to ensure that AI is something that is used not just as a tool for sales growth, but as a means to enhance discovery and build genuine connections with customers. By crafting smart, thoughtful campaigns, we want to help brands in partnership with retailers to position any AI nudges as empowering—a way to save consumers time, help them find products they love, provide recipe inspiration and even promote healthier, more practical and more sustainable choices. I say bring it on!"

You can read the full article by George Nott here: https://www.thegrocer.co.uk/analysis-and-features/little-helps-or-big-brother-ais-role-in-health-and-obesity/697211.article