dunnhumby | Date: 2014-12-23
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Another big deal in corporate adoption of social media marketing – Tesco’s majority-owned Dunnhumby consumer analyst is buying 10-year-old social marketing agency BzzAgent, in a deal that will turn 800,000 social media users in to online brand adovcates for the grocer chain. Techcrunch puts the price for Boston-based Bzzagent at $60 million. “Together, the companies will use the power of peer influence and word-of-mouth to improve customer insights and product sales for consumer goods companies and retailers,” according to Dunnhumby’s announcement. “The customer today is as influential as the marketing gurus were a decade ago. Customers’ choices are influenced in many places and social media and word-of-mouth are playing a key role for brands and retailers.” Dunnhumby devised Tesco Clubcard, one of the world’s most highly-regarded retail customer loyalty schemes for how it mines data on consumers’ weekly grocery shop to better target new products. “Together, we think we have a huge opportunity to connect the dots between shopper marketing and social media,” says BzzAgent CEO Dave Balter. BzzAgent enlists “agents” to spread awareness of products amongst their peer groups. According to its website: “Wwe give them a full-brand experience that helps them fall in love with your product.” All sounds rather sinister.
Crawled News Article
The next time you walk into a shop, consider this: You may not be using your phone, but it is giving out a unique signal that the retailer may be monitoring. A face scanner may check your age and gender while sensors pick up your body heat to help locate popular parts of the store. Consumers have become used to players like Amazon closely following their shopping habits online, triggering targeted product recommendations, advertising and offers. To counter the online threat, bricks and mortar retailers are playing catch-up, using increasingly sophisticated technology to improve staffing, layout and marketing. Not up to speed with online retail (Image: Getty Images) Some people are less comfortable being watched in the offline world, prompting many in the business to promise to use only anonymised and aggregated data unless shoppers explicitly give their permission to be tracked. But as retailers get more sophisticated and link the data they collect to loyalty card schemes, shoppers are starting to sign up to schemes that follow their movements in return for targeted discounts and apps that help them find products. German fashion house Hugo Boss is using heat sensors to help place premium products. Luxury chocolate store Godiva has installed meters to count shoppers so it can match staffing to peak hours and measure the draw of window displays. “Our customers are trying to run their stores or malls more efficiently,” said Bill McCarthy, Europe and Middle East head of ShopperTrak, the US firm behind the Godiva counters. “They are just trying to get real smart with data in the way the e-commerce guys are smart with data,” he said. The Chicago-based company says its counters, while not a new idea, helped Godiva's store in London's Regent Street improve customer service and hone its window displays, boosting transactions by 10 percent in six weeks. As retailers seek ever more information, ShopperTrak has been investing in high-tech video and phone tracking systems to analyse how customers and staff behave inside a store. “The information that we collect is strictly anonymous. We make extra efforts to ensure we keep nothing that is potentially personally identifiable,” McCarthy said. Tesco, the world's third biggest retailer, drew criticism from British privacy groups earlier this month with plans to scan the faces of queuing customers to determine their gender and rough age to better target adverts. The company, which put the tracking of customer behaviour on a whole new level with its Clubcard loyalty card two decades ago, said it would not record images or store personal data. Its advisers say some other retailers are less responsible. “Too much is happening without consumer consent,” said Simon Hay, chief executive of Dunnhumby, the customer science company owned by Tesco that is behind its loyalty scheme. “You have to be transparent with data, tell people what you're doing with it and why and give them something in return.“ That has long been the philosophy behind loyalty schemes, which are getting ever smarter as retailers link data from more sources. British shoppers now access an average of six loyalty schemes via their mobile devices compared to four in their wallets, a survey by mobile payments firm CloudZync showed. Even if a customer does not use their smartphone while in a store, retailers can already deploy wi-fi signals to track their location to within three metres, said Darren Vengroff, chief scientist at U.S. data company RichRelevance. “Every retailer wants to better understand their customer,” said Vengroff, previously the principal engineer at Amazon who helps clients like Wal-Mart, Sears and Marks and Spencer provide more targeted offers to shoppers. “The challenge is to make it really personal and not just a bunch of technology like 'Big Brother' watching you and 'Minority Report' as you're walking down the street.“ If a retailer identifies that a high-value shopper has just entered the store by their phone signal, it would be better advised to get a member of staff to give them extra attention rather than bombard them with text messages, Vengroff said. Last month, a group of U.S. companies specialising in location data for retailers agreed to a privacy code of conduct which includes signs posted in store to alert shoppers to the use of tracking technology and instructions for how to opt out. “Even in an anonymous state, you can begin to pull together a profile of a customer, when they are coming to store, when they are mobile,” said John Sheldon, global head of strategy at consultants eBay Enterprise. “These are early days for these capabilities,” Sheldon said, adding he expects the advent of wearable computing devices such as Google Glass to accelerate the trend towards more location-based tools to navigate shoppers towards deals. Telecoms group Telefonica, owner of the O2 brand in Britain and other European markets, dropped plans last year to sell location data it collects from its mobile phone customers to German retailers due to a backlash over privacy concerns. But it proceeded elsewhere, saying it gains insights only from aggregated data and does not sell personal information. Telefonica helped Britain's No. 4 grocer Wm Morrison hone its marketing by using phone data to analyse how far potential shoppers would be prepared to travel to a store. That allowed it to target coupons to more households, driving a 150 percent increase in new or reactivated customers. Many consumers are already shrugging off privacy concerns and embracing tracking technology: European retail consultancy Jupiter has seen a 90 percent opt-in rate for a platform which offers marketing and mobile payments on smartphones. “Messages are less and less likely to be annoying because they will become more and more targeted as you interact,” said Robin Bevan, Javelin director of location and analytics. “The system is self learning: it tests the response rate to ensure that people don't get messages that aren't relevant.“ The software is proving popular even in Germany, where data privacy is tightly controlled. Airline Lufthansa has integrated it into its “Miles & More” loyalty app, signing up more than 400,000 users since its launch in 2010. Will customers be OK with targetted ads every time they shop? (Image: Getty Images) On Valentine's Day, Lufthansa offered male app users aged 20-50 in Frankfurt airport a 20 percent discount at jeweller Swarowski. It was redeemed by 30 percent of those targeted, a much higher redemption rate than for normal promotions. Sian Rowlands, an analyst at consultancy Juniper, sees the trend towards such promotions helping triple global spending on mobile advertising to $39 billion in 2018 from $13 billion now. “At the moment, mobile users frequently see irrelevant adverts which are infringing on their mobile experience,” she said. “Being able to target a user whilst they are out shopping versus at home has a greater impact.“ The ability to track customers on their smartphones in the vicinity of a store should help “bricks and mortar” retailers fend off the online threat in other ways too, says Dan Wagner, head of e-commerce and mobile payment firm Powa Technologies. “Geolocation is what is going to transform the leverage that a physical retailer has versus an online retailer,” he said. “If I transmit my location to the retailer, they could say I have a store 300 yards away. You could drop by in half an hour and I'll have your goods for you. Amazon can't do that.“
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For retailers looking for an example of how to win in the big data game, the U.K. supermarket giant Tesco — which clocks in as the second-largest retailer in the world under U.S. behemoth Walmart — is a solid place to start. Tesco was an early adopter of big data techniques in the form of its Clubcard loyalty program, and over the years has managed to strike the often difficult to achieve balance of being predictive of customer needs without being intrusive. Behind much of Tesco's success is the consumer data science company Dunnhumby, which Tesco eventually (and wisely) acquired in 2006. Now as a Tesco subsidiary, Dunnhumby has made some significant acquisitions of its own. In a deal announced Thursday, Dunnhumby bought the Berlin-based digital programmatic advertising company Sociomantic Labs — which was bootstrapped and grown to profitability by ex-Googler Jason Kelly — resulting in an "unprecedented" database of more than a billion shopper profiles. Although Sociomantic is the first advertising acquisition for Dunnhumby, the firm has been testing the purchasing waters for the last several years. In 2010 Dunnhumby acquired the pricing intelligence and optimization company KSS Retail, followed by a 2011 acquisition of BzzAgent, a company that organizes and incentivizes consumers to compete for free products. But according to Dunnhumby CEO Simon Hay, the Sociomantic deal is by far the biggest yet for the company, in terms of both scope and ambition. "We have been learning our way into the acquisition space," Hay said in an interview, "and it's not something we do with a high degree of frequency." What made Sociomantic so attractive to Dunnhumby was its massive customer reach (it holds the keys to more than 700 million online shopper profiles) and the potential to combine services in a way that offers their clients more solutions in more places. The core of those services revolve around the ability to reach customers wherever they shop — in store or online — and offer them personalized communications to build engagement and brand loyalty. In a prepared statement, Thomas Brandhoff, managing director and co-founder of Sociomantic, noted: Claims of consumer benefits aside, the real meat of the partnership is the ad cohesion that customers could begin to see — a facet of the deal that not only benefits Tesco, but also the bevy of big-name brands and retailers already on Dunnhumby's client list, including Coca-Cola, Kroger and Macy's. For instance, any interests that were identified by Dunnhumby via loyalty programs, such as a penchant for pink scarves or a late-night hankering for salt-n-vinegar potato chips, could show up in ads served by Sociomantic. On the other side of the equation, Sociomantic also wins with its ability to leverage the data capabilities within Dunnhumby's portfolio. Yet even with those shakeups, Hay asserted that it will remain business as usual for Sociomantic, as he intends to take the same hands-off approach used with previous acquisitions. Financial details of the deal have not been disclosed.
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Social media is very much an evolving phenomenon. New forms of communication and ways of making connections arise frequently in the digital space. Occasionally one of them sticks – think Facebook, Twitter, Instagram and Pinterest. More often, one has a 'moment' but doesn't quite stick. Think Google Plus, Quora and Flickr. In the early days of social media, sites we thought had stuck came unstuck, or were usurped by young pretenders. Friends Reunited made way for MySpace, which in turn and despite numerous attempts at revamps, acquiesced to Facebook. Twitter is only the second social network to truly stick fast. It has evolved since its inception to house photographs and other media, and successfully monetised itself without driving loyal users away. Crucially it has remained free at the point of use. We have reached the stage whereby companies must add 'a Twitter feed' to their increasing list of things to do, on top of the phone number, website, contact email and Facebook page. This important background explains why certain brands and businesses have opted not to have a Twitter feed. To leap on every social media bandwagon could turn out to be a waste of time. However, given Twitter's huge success relative to other platforms, it also shows prioritising Twitter is essential for brands if they are to successfully engage audiences. Given the proliferation of social media and the increasing ways in which customers can contact businesses – phone, email, website, Facebook – some businesses might consider a Twitter feed superfluous, taking into account the wide range of alternative methods by which customers can get in touch. This thinking is flawed. If your customer or potential customer is on Twitter and can't talk to you, they won't necessarily switch to another method or channel that suits your business. They will, instead, talk to another brand or company that is on Twitter and will engage on this preferred channel. As a result, a Twitter strategy is essential if brands are to simply stand still, let alone engage new consumers and drive growth. It doesn't matter if your company deals in media and communications, orange juice or sanitary towels. Somebody, somewhere is going to be talking about you and they will expect you to be listening. Customers also want to feel a connection with the brands with which they choose to interact. They want to feel their choices say something about them, that their tastes and preferences are reflected, and that their ethical and moral position is upheld or even demonstrated by the brands they choose to buy. A Twitter feed acts as a short, succinct insight into your brand and company. It tells customers about you and your brand, in a language they can understand. Customers aren't going to read lengthy mission statements and press releases written in corporate jargon. Your everyday interactions will tell customers everything they need to know. In one sense companies don't need to think a great deal about a Twitter strategy, because social media is very transparent. A successful Twitter feed is simply an authentic representation of the person or company it speaks for. What this authenticity looks and sounds like is the area in which more thought is often needed. There is no magic formula for the perfect tweet. But there are some guidelines you can follow to ensure that the content on your Twitter feed is relevant, useful and interesting to the people who follow you. A Twitter feed must reflect the 'voice' of the overall brand or business it represents, and in a way it also becomes the voice. For this reason, a successful brand or business Twitter feed is often manned by just one person.