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Customer Science Blog

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Long before he became dunnhumby’s Retail Director, Dave Clements was part of the original Clubcard team at Tesco. Since the mid-nineties he’s been pioneering how retailers use data to better understand customers and build long-term loyalty. That’s given him ample opportunity to observe the trends shaping today’s retail environment.

In this session of the Customer Science Podcast, Dave scans the horizon to predict what the future of retail holds in store, covering themes from transparency, social media, and the sharing economy to accelerating globalization and the rise of health & wellness.

 

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Long before he became dunnhumby’s Retail Director, Dave Clements was part of the original Clubcard team at Tesco. Since the mid-nineties he’s been pioneering how retailers use data to better understand customers and build long-term loyalty. That’s given him ample opportunity to observe the trends shaping today’s retail environment.

In this session of the Customer Science Podcast, Dave scans the horizon to predict what the future of retail holds in store, covering themes from transparency, social media, and the sharing economy to accelerating globalization and the rise of health & wellness.

 

01 Sep 2015

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Published on Brand Republic 

Last week was the queen's birthday in Thailand. 

Mother’s Day is also celebrated on the same day, as a tribute to Queen Sirikit, the mother of all Thai people. 

The sight of households and public places decked out in lights, decorations and portraits of the queen always prompts me to reflect on what is special about Thailand and why, as a result, it can become a regional powerhouse for the advertising industry.

Specifically, Mother’s Day reminds me of the increase in support I have seen for working mothers, which is reflected in Grant Thornton research that found 38 per cent of senior management roles in Thailand are occupied by women, compared with 20 per cent in the UK. I also see real diversity in the make-up of the Dunnhumby Thailand office, which is 65 per cent female. 

The job isn’t finished, but there has been enough progress for agencies in Thailand to begin realising the power of diverse teams to more effectively reach diverse consumer groups. 

The use of data in Thailand is also unusually sophisticated for an emerging market. The pace of change and diversity within the country mean data plays a central role in understanding consumer behaviour and motivations. Technologies that allow a more sophisticated approach to targeting and measuring advertising and media spend are in huge demand as a result. 

This appetite for data usage is matched by a desire to bring all media elements together to deliver consistent, device-agnostic messaging. That means digital display retargeting could be matched with in-store advertising, for instance, to create holistic conversations. The era of seamless media consumption has truly reached Thailand. 

The excitement generated by sophisticated integrated campaigns and data use is playing a role in business and political leaders recognising the strategic opportunity for Thailand to act as a regional powerhouse. Ensuring that messaging is effective and relevant, whether in downtown Bangkok or up-country Myanmar, will be challenging but will also inspire new levels of creativity. 

All of these factors are set to transform the status of our industry in Thailand. Singapore has traditionally been recognised as one of the world’s most important markets by building on its business and financial roots to also establish itself as a key media centre, and Thailand looks set to evolve similarly. 

With Thai agencies reaping the benefits of diversity and launching sophisticated data-based integrated campaigns, the groundwork has been laid for Thailand to emulate the Singaporean success story.

 

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Published on Brand Republic 

Last week was the queen's birthday in Thailand. 

Mother’s Day is also celebrated on the same day, as a tribute to Queen Sirikit, the mother of all Thai people. 

The sight of households and public places decked out in lights, decorations and portraits of the queen always prompts me to reflect on what is special about Thailand and why, as a result, it can become a regional powerhouse for the advertising industry.

Specifically, Mother’s Day reminds me of the increase in support I have seen for working mothers, which is reflected in Grant Thornton research that found 38 per cent of senior management roles in Thailand are occupied by women, compared with 20 per cent in the UK. I also see real diversity in the make-up of the Dunnhumby Thailand office, which is 65 per cent female. 

The job isn’t finished, but there has been enough progress for agencies in Thailand to begin realising the power of diverse teams to more effectively reach diverse consumer groups. 

The use of data in Thailand is also unusually sophisticated for an emerging market. The pace of change and diversity within the country mean data plays a central role in understanding consumer behaviour and motivations. Technologies that allow a more sophisticated approach to targeting and measuring advertising and media spend are in huge demand as a result. 

This appetite for data usage is matched by a desire to bring all media elements together to deliver consistent, device-agnostic messaging. That means digital display retargeting could be matched with in-store advertising, for instance, to create holistic conversations. The era of seamless media consumption has truly reached Thailand. 

The excitement generated by sophisticated integrated campaigns and data use is playing a role in business and political leaders recognising the strategic opportunity for Thailand to act as a regional powerhouse. Ensuring that messaging is effective and relevant, whether in downtown Bangkok or up-country Myanmar, will be challenging but will also inspire new levels of creativity. 

All of these factors are set to transform the status of our industry in Thailand. Singapore has traditionally been recognised as one of the world’s most important markets by building on its business and financial roots to also establish itself as a key media centre, and Thailand looks set to evolve similarly. 

With Thai agencies reaping the benefits of diversity and launching sophisticated data-based integrated campaigns, the groundwork has been laid for Thailand to emulate the Singaporean success story.

 

20 Aug 2015

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Simon Hay joined dunnhumby in 1991, as the company’s first full-time hire. Back then his job duties included taking out the bins on Tuesdays. From those humble beginnings he moved on to manage dunnhumby’s engagement with Tesco, establish and grow the US business, and eventually become Chief Executive Officer. In that time he’s seen a lot of change, but has taken pride in what remains the same: dunnhumby’s unique company culture.

In this edition of the customer science podcast, Simon shares his insight into the importance of company culture, how it drives innovation, and is crucial to engage employees for the long term.

 

 

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Simon Hay joined dunnhumby in 1991, as the company’s first full-time hire. Back then his job duties included taking out the bins on Tuesdays. From those humble beginnings he moved on to manage dunnhumby’s engagement with Tesco, establish and grow the US business, and eventually become Chief Executive Officer. In that time he’s seen a lot of change, but has taken pride in what remains the same: dunnhumby’s unique company culture.

In this edition of the customer science podcast, Simon shares his insight into the importance of company culture, how it drives innovation, and is crucial to engage employees for the long term.

 

 

11 Aug 2015

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Published on The Grocer

A recent Nielsen study found that 58% of UK price promotions are loss making for retailers. More recently, the Competition and Markets Authority found evidence that supermarkets are misleading consumers with confusing price promotions.

If promotions are simultaneously offering a bad deal to retailers and consumers, we can’t understate the transformative potential for our industry of getting smarter about pricing.

It’s clear a new approach is required. One that places the customer at the centre and makes proper use of data in order to deliver truly personalised promotions on goods and services.

It’s understandable that the rise of discounters and the arrival of new entrants like Amazon Fresh and its delivery service should prompt a rush to introduce price promotions. But for most, joining this me-too race is a broken strategy that diverts focus to rivals, instead of customers.

Proper customer science – detailed analysis of shopping habits – needs to be applied to price and promotions strategies, just as often as it is to optimising product ranges or shelf spaces.

Sophisticated data use and a customer-centric approach can lead to a number of key steps being taken to offer smarter pricing that can deliver for retailers and consumers alike:

1. Remove ineffective promotions to conserve margin. Understanding at a fine-grain level how customers react to pricing changes and promotions allows a retailer to make better decisions. Data can include: the location of an item for sale in a store floor plan, how it was advertised and its position in a promotional flyer. In a business with low margins, understanding what drives consumers to switch choices from one brand to another is a game-changer.

A soft-drink promotion may work with some customer segments, but not others; analyzing customer data determines which shoppers found the offer appealing. Advanced analytical tools can highlight whether these customers also filled their shopping baskets with other goods, or if they were only interested in the soft drink. Retailers also need to understand category cross-effects and other unintended consequences of their promotions, to identify whether they are really making the desired impact or just cannibalising other sales.

Likewise, data analysis should be used to identify which products are most important to key customers. Promotions can then be focused on these price-sensitive items to enhance loyalty from these customers to drive sales volume. Promotions that cover an entire product category should also be avoided, as these are bound to waste precious resources while not yielding data relating to customers’ real preferences.

2. Invest in targeted, personalized loyalty rewards (or rolling campaigns) for valuable customers. In this omnichannel world, customers expect retailers to offer personalised promotions.  Individualised offers demonstrate the retailer understands what is important to those customers by giving a special deal on goods and services the customer likes.

Understanding what your customers bought, are buying and are likely to buy, enables you to offer the right prices, promotions and discounts, at the right time, over the right channel.

3. Compete on price but do not overinvest. Competitive pricing data has become widely available, but it’s important to react intelligently to competitors’ moves rather than responding to every action. With data showing which customers care about which products, retailers can target competitive price discounts on goods that price-sensitive shoppers care most about, and avoid leaving money on the table.

4. Target assortment competitiveness to demonstrate brand quality. Selecting the right product range is a big part of customers’ price perception. Including top-quality products in the array of offerings allows the retailer to appeal to a range of consumer segments, including price-sensitive and high-value customers.

This is especially important in supermarket fresh goods categories like fruit, vegetables, meat and fish. Display a competitive range of offerings, including upmarket products at premium prices. The mix of products a retailer offers drives customers’ perception of price.

5. Manage the full product portfolio to retain pricing integrity. A price and promotions strategy must make sense to customers to retain their trust. The two-litre container of a soft drink shouldn’t cost more per millilitre than the smaller container, for instance.  Prices also need to make sense across different brands in a category. Retailers that want to sell more private-label yogurt should leverage automated size and parity rules to ensure that the price is lower than the national brands. All of this is difficult to do with tools like Excel; a science-based optimization solution can help ensure price consistency.

These steps will help retailers grow their customer base, improve profitability and the perception consumers have about pricing policies, while enhancing customer loyalty. We could move from an approach that isn’t working as well as it should be, to one that works well for everyone. And it’s difficult to put a price on that. 

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Published on The Grocer

A recent Nielsen study found that 58% of UK price promotions are loss making for retailers. More recently, the Competition and Markets Authority found evidence that supermarkets are misleading consumers with confusing price promotions.

If promotions are simultaneously offering a bad deal to retailers and consumers, we can’t understate the transformative potential for our industry of getting smarter about pricing.

It’s clear a new approach is required. One that places the customer at the centre and makes proper use of data in order to deliver truly personalised promotions on goods and services.

It’s understandable that the rise of discounters and the arrival of new entrants like Amazon Fresh and its delivery service should prompt a rush to introduce price promotions. But for most, joining this me-too race is a broken strategy that diverts focus to rivals, instead of customers.

Proper customer science – detailed analysis of shopping habits – needs to be applied to price and promotions strategies, just as often as it is to optimising product ranges or shelf spaces.

Sophisticated data use and a customer-centric approach can lead to a number of key steps being taken to offer smarter pricing that can deliver for retailers and consumers alike:

1. Remove ineffective promotions to conserve margin. Understanding at a fine-grain level how customers react to pricing changes and promotions allows a retailer to make better decisions. Data can include: the location of an item for sale in a store floor plan, how it was advertised and its position in a promotional flyer. In a business with low margins, understanding what drives consumers to switch choices from one brand to another is a game-changer.

A soft-drink promotion may work with some customer segments, but not others; analyzing customer data determines which shoppers found the offer appealing. Advanced analytical tools can highlight whether these customers also filled their shopping baskets with other goods, or if they were only interested in the soft drink. Retailers also need to understand category cross-effects and other unintended consequences of their promotions, to identify whether they are really making the desired impact or just cannibalising other sales.

Likewise, data analysis should be used to identify which products are most important to key customers. Promotions can then be focused on these price-sensitive items to enhance loyalty from these customers to drive sales volume. Promotions that cover an entire product category should also be avoided, as these are bound to waste precious resources while not yielding data relating to customers’ real preferences.

2. Invest in targeted, personalized loyalty rewards (or rolling campaigns) for valuable customers. In this omnichannel world, customers expect retailers to offer personalised promotions.  Individualised offers demonstrate the retailer understands what is important to those customers by giving a special deal on goods and services the customer likes.

Understanding what your customers bought, are buying and are likely to buy, enables you to offer the right prices, promotions and discounts, at the right time, over the right channel.

3. Compete on price but do not overinvest. Competitive pricing data has become widely available, but it’s important to react intelligently to competitors’ moves rather than responding to every action. With data showing which customers care about which products, retailers can target competitive price discounts on goods that price-sensitive shoppers care most about, and avoid leaving money on the table.

4. Target assortment competitiveness to demonstrate brand quality. Selecting the right product range is a big part of customers’ price perception. Including top-quality products in the array of offerings allows the retailer to appeal to a range of consumer segments, including price-sensitive and high-value customers.

This is especially important in supermarket fresh goods categories like fruit, vegetables, meat and fish. Display a competitive range of offerings, including upmarket products at premium prices. The mix of products a retailer offers drives customers’ perception of price.

5. Manage the full product portfolio to retain pricing integrity. A price and promotions strategy must make sense to customers to retain their trust. The two-litre container of a soft drink shouldn’t cost more per millilitre than the smaller container, for instance.  Prices also need to make sense across different brands in a category. Retailers that want to sell more private-label yogurt should leverage automated size and parity rules to ensure that the price is lower than the national brands. All of this is difficult to do with tools like Excel; a science-based optimization solution can help ensure price consistency.

These steps will help retailers grow their customer base, improve profitability and the perception consumers have about pricing policies, while enhancing customer loyalty. We could move from an approach that isn’t working as well as it should be, to one that works well for everyone. And it’s difficult to put a price on that. 

11 Aug 2015