Clive Humby

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Clive Humby Chairman, dunnhumby
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Agenda

• Understanding the consumer through data
• Some lessons from the retail world
• Better Promotions
• Better NPD
• Meeting emerging consumer needs
• Challenges

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who are we?
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Influencing 500 million consumers globally
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Consumer is data savvy are you?

• Used to relevance every time they go online
• Amazon, eBay etc all driven by what you have
  done before
• iTunes, WE8, Napster know my favourite music
  etc.
• Facebook, YouTube driven by my profile and
  preferences
• Supermarkets are becoming much more relevant both
  in-store and on-line
• Telephony, Banks and Insurers are beginning to
  get it
• Are you? What will be the price if you are not?

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Customer Loyalty a few myths
Do customers want a relationship with you? I
dont think so, with a few exceptions
Sticking a customer is king poster on the
office wall doesnt work
Are we talking about improving customer service
or driving down customer service costs? They
arent the same thing
Now youve made it clear to the customer you have
all this data on them Have you changed your
behaviours?
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Customers dont get stolen they walk
if you want to protect and enhance your brand
value your offer must be relevant and valued
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Tesco Clubcard
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Loyalty card EPOS data enables retailers to
know customers tailor the offer according to
needs
The process
Customer Data
Customer Insight
Customer Management
Long Term Customer Loyalty
to drive...
to grow...
enables...

• Communication strategy
• Retention
• Growth
• Win-back / prospecting
• Business strategy
• Price
• Promotions
• Assortment
• Availability

• Increased customer Lifetime value
• Sales growth

• Customer segmentation
• Lifestyles
• Shopping Habits
• Promotional Behaviour
• Demographics

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How do we achieve Relevance? Firstly, what
you buy

• What are the key attributes of the products you
  choose?
• Green
• Price Point Cheapest on Display, Mainstream,
  Premium
• On Promotion
• Ease of preparation
• Pack size
• Designed for kids, adults
• Always choose the same brand or cherry pick
  promotions
• Ingredients
• Brand
• Healthy..

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How do we achieve Relevance? Secondly, how
and when you buy

• What are your favourite channels
• Loyal to one store or shop multiple formats
• Share of Wallet/ basket size
• Fill-up with petrol on the same visit
• Use dot.com
• When you buy
• Mid week versus weekends
• Time of day
• One big shop or many smaller visits

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How do we achieve Relevance? Thirdly, your
reaction to offers

• Promotional Behaviour
• Cherry-pick this weeks offers or do a full shop
• Switch brands based on offers
• Trade-up when on promotion
• Clubcard Offers
• Redemption of coupons delivered
• Use of Clubcard Bonus at till
• Green Clubcard points
• Clubs
• Babyclub, Wine Club, Healthy Eating, Food Club

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Making product data powerful Product DNA
Customer DNA of this product Big Box () / Small
Box (-) 1 Healthy 0 Prepacked () / Loose
(-) 0 Fresh () / Longlife (-) -1 Convenience 0 Co
oking from Scratch 0 Branded () / Tesco Own
Label (-) -1 Kids 0 Value 1 On
Promotion 0 Finest 0 Foreign 0 Green 0 High () /
Low (-) Price -1 Vegetarian 0 Meat 0 Adventurous
0 Traditional 0 Low Calorie () / High Calorie
(-) -1 .
Value Chips, 3.6 kg
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Lifestyles are built from a customers DNA
profile
Miss Joness DNA Profile
25,000 products are used to create a customer
DNA We have a DNA profile for every single
customer
A Time Poor Food Rich customer
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Lifestyles Customers are segmented according to
what they buy
Upmarket
Mid Market
Cost conscious
You are what you eat. This gives us an
indication of what motivates customers when they
shop.
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Segmentation allows us to build this picture for
15m customers
Lifestyles Motivations behind shopping
behaviour You are what you eat
This is how our customers behave.
Attitudes
Drivers of Behaviour
Behaviours
Transactions
Profit
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why do we do it?
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What are the key levers for a retailer?

• Right mix of good prices great promotions
• Right range of products on the shelf
• Successful New Product Developments
• Good service in the store
• Relevant personal offers and rewards
• Reacting to changing customer needs

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Optimised merchandising in cleaning products
increased facings of low end products at price
sensitive stores
Sales increase 16 Units increase 48
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Winning House Brand New Product Development
540 new lines, designed to win against Aldi /
Lidl / Netto
Results Between 3 (beauty) and 11 (Household)
penetration of weekly users Typical customer
buys 2.1 discounter items per week
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Driving communications
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Real baskets advertising
Reality Baskets advertising focus is on what
customers actually buy rather than cheap items
with low uptake.
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Retailers today in store
Sampling In store car park
Trolley Talkers
In Store TV
Floor Stickers
Coupons _at_ Till
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Retailers today at home
Loyalty
Themed Mailings
Magazine
Web Internet
Clubs
Coupons _at_ Till
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Retailers today e-channels
Web Internet
Online Communities
Mobile
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Retailers will be able to know consumers
interact in a much more relevant way
Helping me live my life
Smart Trolley
E-Cash / Payment vehicles
Offers direct to phone
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Summary

• We are in an age of in-depth insights targeted
  communication to consumers
• Real time, accurate, actionable, responsive
• Consumers get data
• They understand the loyalty contract you get
  to understand me, I get relevant offers and
  incentives
• They see relevant messages from their
  supermarket, Amazon, eBay etc.
• Are you being relevant to them?
• What are you doing to be more relevant?
• Can you collect data on your customers?
• Can you differentiate the service as a result to
  mutual benefit?
• Do you use the data and show its value?

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Challenge for you

• What are the key levers that drive your customers
  needs?
• Can you collect and harness relevant, timely data
  to improve customer service, financial returns
  and make yourself more relevant to your
  customers?
• How does this work in a market where demand
  exceeds supply?
• What are the consequences of customers being
  disengaged because you are not relevant to their
  lives?