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Tesco launches media platform for brands built on Clubcard data

Tesco is launching a media and insights platform, opening up the wealth of customer data it collects through its Clubcard and in-store insights to brands and… View Article

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Tesco launches media platform for brands built on Clubcard data

Tesco is launching a media and insights platform, opening up the wealth of customer data it collects through its Clubcard and in-store insights to brands and agencies.

The closed-loop platform, called Tesco Media and Insight, powered by dunnhumby, is designed to help suppliers and their agencies better understand changing consumer needs and develop more targeted and relevant ways to serve customers. This in turn, it hopes, will help both Tesco and its suppliers build stronger connections with customers and drive loyalty.

Tesco’s Clubcard loyalty scheme is used by more than 20 million households in the UK, providing the supermarket with a diverse and nationally representative first-party behavioural dataset. The supermarket also has 7 million regular app users, which combined with dunnhumby’s analytical expertise, provides the retailer with a wealth of insight that it believes will help suppliers and agencies improve engagement and develop more effective propositions.

Alessandra Bellini, Tesco Chief Customer Officer, said: “As the UK grocery sector evolves, we want to ensure we provide a more relevant and personalised offer to meet our customers’ changing needs. Our new platform will bring together the wealth of customer knowledge we have, with the insights from dunnhumby, and use it in a way that helps our brands to be more efficient and targeted and ultimately to serve our customers better. We’re excited to work with our suppliers and agencies to drive better engagement with customers and add value to their businesses.”

Dan Hodgkiss, Managing Director (Tesco UK), dunnhumby, said: “This new platform we’ve built with Tesco combines the scale of their customer base and the world-leading data science of dunnhumby to create a powerful closed-loop system, bringing brands closer than ever to their customers to provide unparalleled opportunities.”

Tesco is not the first brand to open up its data to brands. Bellini compared it to Walmart’s Connect and Target’s Roundel media platforms and other UK retailers like high street retailer Boots who launched a similar proposition in September. Boots collects data from its 17 million Advantage Card loyalty members.

Exclusive:
We spoke to Steve Gray, former Managing Director of dunnhumby who said: “dunnhumby have been selling Tesco media (coupons, magazine ads, posters, radio etc) supported by Clubcard data analytics for over 20 years.”

“In the old days the buying, selling and measurement processes were time and people intensive and so expensive to sell, deliver and measure, albeit that the roi was always attractive for brands and generated huge profits for Tesco/dunnhumby – the latter valued at over a £1 billion.”

“Its new platform may bring more automation to the process and so makes it better, simpler, cheaper. What the release doesn’t say is the extent to which Tesco are injecting first party data (knowledge of the shopping habits and personas of their customers) into the online ad marketing that is shown on their websites/apps. This media channel has grown exponentially over recent years. Here buying and selling is done ‘algorithmically’ and via real time auctions as brands compete to show their content to the online shoppers. ”

“This is where there is big opportunity for even greater profits as knowledge that a certain customer who is viewing an ad is, for example, a heavy buyer of petfood or nappies, will significantly increase the bidding from e.g., Mars or P&G respectively. Tesco as media owner, dunnhumby as media seller and brands and their agencies as media buyers all stand to benefit from this new level of automation and applied insight.”

“Other retailers who have the ability to identify individual shopping habits and personas and link these back to purchases and media consumption should follow suit to grab an increasing share of the £29 bn ad market, recognising that as well as sellers of products and services they can also be sellers of media and insights.”

Dunnhumby, founded by Edwina Dunn and Clive Humby, helped Tesco establish the Clubcard loyalty scheme in 1994. It is now a global data science consultancy that is wholly owned by Tesco.

 

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