Data and Goliath
A
retailer in
Today’s Wall St. Journal reports that customer data is Tesco PLC’s biggest weapon against the retail behemoth's Asda chain, which is its largest non-American operation. And it’s working. At 31%, their market share of groceries is double that of Wal-Mart.
Tesco collects customer data via “clubcards,” which
allow them to tailor promotions to individual shoppers and understand quickly
which initiatives work. They used their data to aim squarely at Wal-Mart’s
Achilles’ heel – reliance on having the lowest prices.
Their data even shows (here comes the time-tested data
mining example) that “new fathers tend to buy more beer because they are
home with the baby and can’t go to the pub.” Oh, so that’s why diapers and beer
go together!
It really is all about the
data, isn’t it?
Not only is the data helping the retailer but analysis
of its data is purchased by consumer products titans Procter & Gamble Co.,
Coca-Cola Co. and Kimberly-Clark Corp. And in an ironic twist,
Wal-Mart's Asda executives do not think Tesco's programs leveraging the
data has anything to do with their competitor's success! Do they even know what their parent
Wal-Mart does with data?
IT
can be an overhead cost waiting for cost cutting or it can be a strategic asset
for their enterprise. Data warehousing, business intelligence and corporate
performance management are BUSINESS applications if architected correctly and
built with the business (and for the business.)
(The WSJ article is No.
1 Retailer in Britain Uses 'Clubcard' to Thwart Wal-Mart. A subscription
may be required to view it.)
It's not all about getting tailored promotions to customers. The ability to analyze basket level shopping for named customers (so they can track over time) is key and worth the costs of few discounts over a year as payment for the data.
Many other retailers in the UK 'sell on' product data to their suppliers - and for good money too!
Posted by: pete_s | June 08, 2006 at 08:16 AM