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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 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?
Yeah, I'm as old as my UID would suggest.
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...
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?
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.
Conversion Rate Optimisation French / English consultant
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.
a loyalty card with rfid and customers with remote control implants.
"Smedley, there's a customer in aisle 7 with a weakness for cream filled donuts - jerk him over to aisle 3 quick!"
try { do() || do_not(); } catch (JediException err) { yoda(err); }
Welcome to the world of datawarehousing which has been going on for more than a decade. How is this news?
It's news because it's turning into a giant datawhorehousing these days...
"A door is what a dog is perpetually on the wrong side of" - Ogden Nash
Tesco use a Teradata data warehouse analytical/relationship marketing. They're a division of NCR.
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.
Every time i go to Tesco, without fail, they ask me the same question "do you have a tesco clubcard?"! Do i have a fucking tesco club card? do i?? if i had a tesco club card would i be standing there holding out my money without it? would i actually forget to take it out? I know they are trained to do this, they have no choice and i know by the tone of their voice they are fucking fed up of saying it more than im fed up of hearing it, in fact i feel sorry for them - to have to say the same phrase 100's of times a day while listening to people saying it all around you must be hell. Theres hardly any other talking going on at the check-out, the only thing you hear is the total and do you have a mother fucking tesco club card. Sometimes I wonder, should i just get a tesco club card to make them shut up? even having to pull an extra thing out of my wallet every time would make up for it! If getting a card ment just being handed one and not having to fill anything in then i probably would, but it probably takes a form a mile long. If tesco want me to use a card then its going to have to be anonymous and not require me doing anything.
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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....
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?
By the perception of illusion, we experience reality
Ask to use the store card. I have been doing this for years and have never been turned down by the register oprtator.