What the founders of Dunnhumby did next…
Having created Clubcard for Tesco and revolutionised the way data is used within the retail sector the co-founders of customer insight firm Dunnhumby are embarking on a new mission.
Following the sale of their last interests in Dunnhumby to Tesco, Edwina Dunn and Clive Humby have recently formed H&D Ventures that – among other things – is potentially seeking to do the same for the mobile phone networks as they did for the retail sector.
Speaking with Retailinsider.com Dunn suggests that having enjoyed her time in retail she wants to “learn some new skills” and the mobile networks are ripe for taking advantage of their rich data.
Such is the all pervasiveness of the mobile phone that this move certainly has the potential to be far-reaching in the way it impacts on consumers and their behaviours.
“You’ve got to follow the data and the telecoms companies have such rich data. But so far they’ve been fast growing companies so their data has just been used for billing and to tell you that you are on the wrong tariff! There is a lot to play for,” she suggests.
In using this data Dunn intends to focus more on things that people “love” and are more loyal to than say supermarkets. As successful as Clubcard has been for Tesco she has long acknowledged that people are not typically passionate about the supermarket they shop in.
By tapping into what people “chat about” on the different social media platforms – increasingly via their mobile devices – Dunn says “we can find the things they are loyal to and what they care about”.
She adds: “It’s what defines the person, and this is what interests us [at D&H]. People are passionate about a few things and so if we can make life easier then they’ll like it. It makes it more fun while they shop and live their lives. This is the [data] model that we believe is sustainable.”
The view is that this will make it possible to identify promotions and offers that are related to what the individuals are really interested in rather than simply delivering broad brush offers. “Everybody is trying to offer the customer something they really want, but all the companies use the same tools and are trying to fit this into their existing [business] scenarios,” she says.
Dunn cites the examples of Starbucks doing a sponsorship deal on a specific book and O2 offering tickets to see a band, but the problem is that every customer of these companies will then receive the same promotional email.
Despite the widespread success of Dunnhumby and Clubcard, Dunn says people still fail to understand data and “still do not believe it is strategic”. When combined with the fact that many companies are “stuck with old technologies and legacy systems” then it does not make for a progressive cocktail.
She says one of the “breaths of fresh air” with starting a new business has been the ability to use the latest software, which today is either free or very cheap.
Big Data: big problem
Dunn also questions the many claims that are being made about the potential benefits of ‘Big Data’ because “most big data that is out there is in the format of photos and films” and it is still tough to make sense of this unstructured data.
She says this is posing a challenge to the likes of Google and Facebook who are collecting swathes of private information on people but these individuals are not necessarily getting a payback on this.
“People are letting it ride because at the moment they are getting the [social media and search engine] platforms for free. But once these organisations have more personal data than people imagine and they are not seeing the benefits of it then people will begin to cry that it is unfair.”
At Tesco, Dunn says the retailer was very aware of striking a balance between the data it collected on individuals and the loyalty rewards it then gave them back: “At Tesco it was always about not asking for anything that they would not then use.”
At the moment both Facebook and Google are finding it hard to build the capability to generate the necessary returns for their stakeholders – and also provide the rewards to customers – from their increasingly high mountains of data.
Making life more difficult is the fact that the brand owners/advertisers tend to, not surprisingly, exert pressure. “They always want to do horrible things with data, like use it to steal customers. Tesco said to the brands that it was not about stealing customers and that they must give something back to the consumer. It was not just about one brand tempting customers to switch from another rival product,” she suggests.
While not admitting that any of these challenges are easy to overcome Dunn and Humby are currently enjoying the opportunity to get back into the thick of the data.