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Can a Customer Loyalty Database Change a Society?
Retrospeak writes "'Organisations that continue to put the brand at their epicentre and pay only lip service to the notion that the customer is king, will fail. It's just a matter of time.' So says business strategist Clive Humby. His marketing company, Dunnhumby handles the loyalty scheme database for Tesco, the third-largest retailer in world and the biggest retailer in Britain. This fact combined with a strong customer loyalty program means they may have one of the largest databases in the world. The Economist goes on to state that Britain itself is being changed by the secondary effects of Tesco's massive customer-driven database." From the article: "Some of these changes are small. The dust jacket of a book that was to be sold in-store was recently altered because a Tesco buyer did not like it. Others are more fundamental. Before the Clubcard came along, the largest panels that suppliers could use consisted of around 20,000 people. But suppliers can now pay for access to the database and many just rely on Tesco."
As long as customer databases are mistaken for customer service, it'll certainly not change anything for the better.
I seem to remember a hackers conference where it was suggested that everyone should bring along their loyalty cards, and then do a swap.
If enough people did this, the databases would suddenly start to pick up on unexpected trends - customers whose profile suggested eating tofu and lettuce would suddenly be buying cigarettes and crisps etc.
It seemed like rather an interesting idea to me...
Welcome to the world of datawarehousing which has been going on for more than a decade. How is this news?
A database isn't needed for this. If the two Tescos were instead simply two unrelated corner shops, they'd still be selling different things. Local shops tend to do that - sell things that are in demand instead of things that are not in demand. No special database needed.
It's useful for other stuff though, like the article says, customer profiles means you can send a specific set of discount vouchers to each customer based on their preferences. You could get a similar effect by shipping all vouchers to all customers, but I suspect this would be less effective as most people are more likely to use a couple of vouchers that they find interesting rather than look through a booklet of dozens of vouchers to find ones that are interesting to them.
That's a bit silly, really. It leads to bland stuff that has been toned down to not offend anybody. Sure, if it offends a whole bunch of people, it might make sense to alter it, but one person?
This seems like the perfect implementation of an affinity program. I find the closing parapgraphs regarding the OFTs interest troubling.
Tesco is a public company listening to customers, providing them with the goods and services they desire, and doing so for a fair price. Somehow to a group of people (and the OFT) that is improper. Since when did the "small shops" receive some type of right to exist and operate? If Tesco provided a better value for customers then that is where the customers will go.
I did the majority of my grocery shopping in Tesco while living in the UK. The stores were good, and I could even get home delivery. There were a couple small corner shops on the way home from the tube station as well. If I needed a loaf of bread, carton of OJ, or a pack of smokes they were a good quick stop. If stocking up my pantry/fridge for the week I'd go to Tesco. The small shops didn't have the products I wanted to buy.
The village where I live is about 3 miles from the nearest Tesco and, one by one, the small family-run shops are closing. But they themselves are partly to blame - apart from Saturday mornings, they're closed when I'm at home. I would buy my meat fresh the butchers, fruit and veg from the greengrocer, and fresh bread from the bakers, but they don't give me that choice. If they stayed open late, just by a couple of hours, one day a week they'd get my business. At the moment the only people able to shop there are pensioners, the unemployed, housewives and shift workers.
Tesco's power is causing resentment. Most openings of big new stores are greeted by fears for local shops and a campaign to keep Tesco out.
Say what you want about how much nicer Tesco is than Wal-Mart, it seems like they face the same issues in the communities they are entering.
What is the point of this? All it would do is screw up all the marketing research, resulting in them shoving more crap you don't care about down your throat whenever you go to buy groceries.
Personally, I hope to hell they learn everything they can about me so that my shopping experience will go smoother and faster.
Regretably, the fact that Wal-Mart doesn't use loyalty cards is one of the few admirable things about them.
"Lawyers are for sucks."
- Doug McKenzie
The grocery chain (and tesco) really don't CARE about your identity. They are generally perfectly happy to give a loyalty card to a form made out to "Mickey Mouse" and an address of the local city office.
What they want is the BUYING PATTERNS... and they get this IRRESPECTIVE of your identity. The fact that people who buy Milk on Tuesday, also buy Boneless turkey thighs on Saterday is interesting. Who those people are is not terribly interesting.
This is why, chains with loyalty cards PRINT your discount coupons AT THE REGISTER as you go through. No wasting coupons mailing them to people who don't come in. No mailing cost, etc. And once again, your identity is of no consequence.
Go get the discount card. Put a fake name and an address four blocks over. They DON'T CARE....