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."

Comments

Wegmans v. General Motors

[bgfay]

I live in Central New York where we have the pleasure of shopping at Wegmans Supermarkets. Wegmans uses a shopping card, is very receptive to even the smallest suggestions from customers, and goes out of their way to satisfy all customers. They track purchases carefully and have a giant database from which they mark trends and make changes. To put it simply, they rely less on the brand name and more on continuously improving and changing. For this reason, they have sent at least three different supermarket chains in the area scrambling or out of business. Wal-Mart hasn't even made much headway because Wegmans is so good.

Then there's GM. This dinosaur doesn't give people what they want--a well-built car that lasts a long time and sells for a reasonable price. Simply put, they don't get it. They believe that they have always been and that they have always done things the one true way.

Which company will grow?

Re:Wegmans v. General Motors

[Profane MuthaFucka]

Obviously you don't know what people want in a car either. The biggest factor you forgot is *style*. GM makes ugly and inoffensive cars, but no beautiful cars.

The fact that the Toyota absolutely NAILED the American hip-hop submarket with their boxy Scion while sitting in their offices 10,000 miles away ought to scare the living shit out of GM. They've managed to figure out how to sell 10 year old styling to old people (and not in Korea either) but that's about it.

Re:Wegmans v. General Motors

[rkcarter]

I was just noticing the difference between some stores -- I notice a lot of cashiers these days ask you "did you find everything you were looking for?" I used to auto-answer "yes" (like "have a nice day") but now I answer honestly. I have discovered that approximately half the people just sort of smile and say "oh sorry" or ignore me when I say I didn't find some particular thing; the other half actually have had people go back and double-check, or take down the info as a suggestion, etc. It varies but it's helping me decide where to re-shop.

Tesco has changed Britain, but for the bettter?

[fruey]

The local Tesco store near where my parents live has killed most local commerce and the next town (5 miles away) suffered greatly until a supermarket was given permission to build a large store on a town centre site there.

It is more correct to say that the hypermarket has changed Britain, but Tesco happens to be by far the most successful example. IIRC the statistic is that 1 out of every 3 GBP spent in the UK is spent at Tesco.

In their defense they say "Tesco tries to see off criticism by arguing that it gives customers what they want and keeps staff happy." You could easily turn that around any say that they reinforce customer habits by offering them offers on their usually consumed high value items. You rarely see offers on bread, milk and sugar. Rather more on your favourite desserts and higher margin goods. By suggesting that others purchased Turkey Twizzlers with Claret and then offering other Turkey Twizzlers offers on Claret rather sounds like moving everyone towards a common denominator to me. But one thing is for sure, it sure sells product! So if your goal is to survive in the continual drive to make consumers consume more and more (and at credit too - with the Tesco credit card, Tesco loans and with a Tesco banking service) then you're onto a winner by being just like Tesco.

Not Saving Any Money

[Blackbird_Highway]

Stores that use these tracking card systems always charge more than stores that don't. There have been many studies that have proven it. Check the Wall Street Journal. You can prove it yourself, I did. Just check the prices of items in the store, before and after they go on sale with a card discount. One week the frozen fish is 2.99. The next week, it's 3.79, but you get .80 off if you use your card! You're saving .80! What a bargain! As long as the sheep who shop there think they are saving money, the store is more profitable, so it's all good, right?