Tesco has announced a three-year deal with a French tech company to develop “cutting-edge” AI solutions including an overhaul of its personalised Clubcard offers, The Grocer can reveal.
The deal with fast-growing French startup Mistral AI was part of a broader strategy to embrace AI in its retail offer, Tesco said.
The partnership will give Tesco full access to the AI company’s commercial models, including any future developments, as well as its AI engineers.
It includes a commitment for the two companies to work together through a new joint “AI lab”. This will see Mistral AI and Tesco’s technology experts work together to create new generative AI solutions for different parts of the Tesco business.
Tesco said it would focus all its AI investments on improving the experience for its customers, colleagues and suppliers, while also enhancing its wider operations.
The agreement is expected to cover a raft of areas, including content development and document drafting. It is also designed to speed up data analysis, including on its huge Clubcard loyalty base.
Tesco has already doubled the size of its technology team over the past five years and is already using AI, developed both in-house and with partners, across many of its its operations.
They include finding the most efficient routing for online orders to create more delivery slots for customers, helping with demand forecasting to ensure availability, and ramping up personalisation through Clubcard.
It said Mistral AI was the only “frontier” AI company in Europe that was building large language models, with Tesco the first major UK retailer to strike a partnership with the leading European AI player.
The startup has developed rapidly since its launch in April 2023 and has customers including HSBC. It also signed a major deal this month with multinational insurer AXA and car maker Stellantis.
“By bringing together our retail expertise and Mistral AI’s cutting-edge technology, we hope this partnership could ultimately save colleagues time, improve how we do things and help us to better serve our customers,” said Tesco data, analytics & AI director Ruben Lara.
“Innovation has always been part of Tesco’s DNA, and this agreement builds on our extensive track record in developing new technology and AI solutions, in ways that ultimately benefit our customers, colleagues and suppliers.”
Marjorie Janiewicz, chief revenue officer and US GM at Mistral AI, said: “We are proud to partner with Tesco, a leader in retail innovation. Our Applied AI team will collaborate with Tesco’s experts to build customisable, controllable and frontier AI products to improve internal workflows and Tesco’s customers’ experience.”
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