“Supposedly in eight years, Kevin Rudd’s fibre to the home, 100 mega bits per second, broadband network will be completed and a velvet revolution will be underway. To put this in perspective if every other country stands still (they won’t) Australia will have the fastest broadband network in the world.” Steve Tindall, quoted here from his article on Retail & Buying Intelligence in mUmbrella.com.au is a retail guru in Sydney. This means a lot of businesses are going to have to workout what this “velvet revolution” means for them.
In the UK, Tesco’s Clubcard information allows the supermarket giant to gain information on approximately 16m basket transactions made in-store and online each week, according to Jean-Pierre Van Lin, head of markets at Dunnhumby, the data gurus who turn Tesco data into usable ‘intelligence’ as Tindall would call it. See article in nma.co.uk.
Van Lin says, “We’re looking to leapfrog everyone else and move into an area that is far more targeted, based on purchasing data over a long period of time,” he said. “It’s about providing an understanding of what people are looking for, and, in turn, giving a far richer shopping experience.”
He added: “A simple example might be a supplier of cat food products. It’s very effective for it to communicate only to those people that only have a cat, rather than to people we know only have a dog.”
Another example of data collection capabilities is highlighted by Rory Sutherland in the Spectator Magazine (July08):
“When Tesco relaunched their internet grocery shopping service, they thoughtfully used customers’ loyalty-card data to pre-fill online lists of ‘favourites’. This was intended to help shoppers more easily find online those items they had frequently bought from stores in the past. It was a nice idea. What they had overlooked was that spouses often share a Tesco Clubcard account between them.
“Soon after the launch they received a distraught call from a woman shopper asking, ‘Why have you put condoms on my shopping list, as my husband never uses them?’ They paused. They checked the data. They checked it again. It was sound. They called her back. Being kind people they did not say, ‘Not with you, he doesn’t, darling.’ Instead they explained there had been a glitch in their data and the mistake had now been rectified. In the matter of white lies, every little helps.” Sutherland runs an ad agency in London. At least I think he still does.
Contrast this with the public stance of Myer’s Bernie Brooks, who said over lunch recently (an AmCham gig. I can’t really pretend that Bernie and I have actually met! For other AmCham events see here.) that for Myer, the online marketplace is not about sales it’s just about gifting. Maybe he doesn’t want to tell the competition what he’s up to with his five year online sales plan. (Surely he has one?)
Both Myer and Woolworths have recently upgraded their tills. Why do you think that might be? I’m pretty sure that there’ll be added data functionality to go with the Myer One / Everyday Rewards cards.
Do you remember the song B-movie (a kind of sequel to “the revolution will not be televised”) where Gil Scot-Heron states in his angry tones: “In the last twenty years America has changed from a producer to being a consumer. And all consumers know that when the producer names his tune the consumer has got to dance.” The message here was about the sorry state of affairs that passive consumption creates and a whole load of timely politics. But we should remember this now, because consumption is only passive when producers aren’t listening to the consumer. Listening and doing. Collecting data and turning it into ‘intelligence’ as Tindall calls it.
Nowadays, the manufacturer and retailer can know enough about a significant number of their consumers to be able to talk to them one-to-one. And yet so few are doing it well. Why oh why? It ain’t that hard to start. It ain’t that expensive. I’m working at the moment with some teams that are doing groundbreaking work here in Sydney. It ain’t rocket science. It’s just analysis of data which will set the tune to get consumers dancing. Or rather it’s using data to find the relevant stories for consumers to get them dancing.