Loyalty card databases are big and getting bigger all the time: Tesco has 16 million Clubcard members, for example, and the grocery chain is always sifting through purchase data to detect patterns that will help it improve its marketing, customer by customer. A new initiative is in the works to encourage customers to buy and eat more healthy foods, for example.Yet as the Guardian points out in a recent article, supermarkets don't need your loyalty card to track what you buy and how often. Many big stores aggregate purchases according to individual debit or credit card numbers (without linking personally identifiable details to that number). So if you routinely use the same piece of plastic to pay for your purchases, the stores have a good idea of what you're buying and when. They also notice when you don't shop in one of their branches, because no transactions matching your card number appear in their database.
'It means we know when customers are lapsing because we won't see their card for a week', a Morrisons spokesperson tells the Guardian. But when the card is used again, Morrisons can 'use it to measure the effectiveness of promotions and events'. In fact, product marketers happily pay supermarkets for the right to promote specific items to shopper segments that have purchased competing products in the recent past. Coupons issued to such targeted customer groups, as identified via big data, have extremely high redemption rates. Clearly, the more targeted the offer, the better the response--and this makes the proposition cost-effective for the marketer, of course.
In the future, retailers hope to use big data to assist in-store shoppers in several ways, such as finding the optimal grouping of products that are related to each other in some way. Big data can also help retailers plan for the right merchandise mix according to expected weather patterns, as another example, based on how shoppers have behaved during periods of similar weather in the past. Privacy remains a concern, however, which is why transparency is vital for maintaining customer trust in this era of big data.
