Thank you for calling: loyalty cards and data collection

our consultant managing the role
Posting date: 2/20/2015 3:53 PM

If your wallet is anything like mine, it is probably bursting with loyalty cards. They are a fact of life these days particularly in the retail supermarket environment where they are standard practice for most major chains. From the consumer point of view, a loyalty card is an attractive proposition because it brings with it rebates, offers and other benefits. From the supermarkets point of view, it is invaluable for data collection.

Although the loyalty card may not be the best data gathering method for some vital retail information such as spending patterns. (Which are most likely to be best gathered at the till point.) They provide something that the supermarkets cannot otherwise gather, they provide information on the shoppers themselves.

With a nod of recognition to a few notable attempts here and there it is probably safe to say the first genuine linked up loyalty card in the UK was Sainsburys/Homebase spend and save. In fact, the loyalty program as we know it could probably be said to be at least partially a product of the advent of computerised wide area retail systems. After all, there is little point in something like a Clubcard if it is not linked to user data and retail opportunities. The concept of a loyalty card whether a multi-return scheme such as Nectar or a more focused approach such as Clubcard has become endemic in our collective buying process.

From a marketing point of view, the loyalty card has probably now become a war of attrition with each supermarket battling it out in the high street to stop the competition succeeding. There is probably a debate to be had about if the card does generate loyalty in the consumer. There would seem to be some support for this perspective when you place the loyalty scheme in the context of the lack of one from international retail giant Wal-Mart (Asda in the UK); Or the continuing campaigns for BOGOF and Price matching.

For the supermarkets that employ a loyalty scheme, the real melting chocolate middle in the pudding is the data gathered by the card. Underneath the offers and the hype, is a real opportunity to do something often denied to larger corporate stores - the continual and casual gathering of specific consumer data. 

For the data analytics market, the data gathered by loyalty cards is a perfect opportunity to develop a clearer picture of the consumer. With the implementation of good data analysis the ‘who, what and when’ of consumption is taken from a generalisation at the checkout to potentially far more specific applications. Gathering and correct processing of loyalty card data allows the retailer to target promotions specifically, down to individual shopper level. For a retail organisation, the ability to specifically tailor offers and merchandise information to an individual is an astounding use of the data the card provides. If you want to see this in action, take a look at your next statement. When it arrives, notice the individual offers or the ‘usual items’ listing on the online shop that also features your recent retail purchases.

So while the marketing of the card may very well be subject to the ebb and flow of current consumer trends, one thing is for certain.  To the data analysis industry and the professionals within it, loyalty cards are not only an excellent data source, but also one that has clear, practical applications.

Related blog & news

With over 10 years experience working solely in the Data & Analytics sector our consultants are able to offer detailed insights into the industry.

Visit our Blogs & News portal or check out the related posts below.

Harnham's Brush with Fame

Harnham have partnered with The Charter School North Dulwich as corporate sponsors of their ‘Secret Charter’ event. The event sees the south London state school selling over 500 postcard-sized original pieces of art to raise funds for their Art, Drama and Music departments. Conceived by local parent Laura Stephens, the original concept was to auction art from both pupils and contributing parents.  Whilst designs from 30 of the school's best art students remain, the scope of contributors has rapidly expanded and now includes the work of local artists alongside celebrated greats including Tracey Emin, Sir Anthony Gormley, Julian Opie, and Gary Hume.  In addition to famous artists, several well-known names have contributed their own designs including James Corden, David Mitchell, Miranda Hart, Jo Brand, Jeremy Corbyn, and Hugh Grant.  The event itself, sponsored by Harnham and others, will be hosted by James Nesbitt, and will take place at Dulwich Picture Gallery on the 15th October 2018.  You can find out how to purchase a postcard and more information about the event here. 

Breaking Code: How Programmers and AI are Shaping the Internet of Tomorrow

Data. It’s what we do. But, before the data is read and analysed, before the engineers lay the foundation of infrastructure, it is the programmers who create the code – the building blocks upon which our tomorrow is built. And once a year, we celebrate the wizards behind the curtain.  In a nod to 8-bit systems, on the 256th day of the year, we celebrate Programmers’ Day. Innovators from around the world gather to share knowledge with leading experts from a variety of disciplines, such as privacy and trust, artificial intelligence, and discovery and identification. Together they will discuss the internet of tomorrow.  The Next Generation of Internet At the Next Generation Internet (NGI), users are empowered to make choices in the control and use of their data. Each field from artificial intelligent agents to distributed ledger technologies support highly secure, transparent, and resilient internet infrastructures. A variety of businesses are able to decide how best to evaluate their data through the use of social models, high accessibility, and language transparency. Seamless interaction of an individual’s environment regardless of age or physical condition will drive the next generation of the internet. But, like all things which progress, practically at the speed of light, there is an element of ‘buyer beware’, or in this case, from ‘coder to user beware’. Caveat Emptor or rather, Caveat Coder The understanding, creation, and use of algorithms has revolutionised technology in ways we couldn’t possibly have imagined a few decades ago. Digital and Quantitative Analysts aim to, with enough data, be able to predict some action or outcome. However, as algorithms learn, there can be severe consequences of unpredictable code.  We create technology to improve our quality of life and to make our tasks more efficient. Through our efforts, we’ve made great strides in medicine, transportation, the sciences, and communication. But, what happens when the algorithms on which the technology is run surpasses the human at the helm? What happens when it builds upon itself faster than we can teach it? Or predict the infinite variable outcomes? Predictive analytics can become useless, or worse dangerous.  Balance is Key Electro-mechanical systems we could test and verify before implementation are a thing of the past, and the role of Machine Learning takes front and centre. Unfortunately, without the ability to test algorithms exhaustively, we must walk a tightrope of test and hope. Faith in systems is a fine balance of Machine Learning and the idea that it is possible to update or rewrite a host of programs, essentially ‘teaching’ the machine how to correct itself. But, who is ultimately responsible? These, and other questions, may balance out in the long run, but until then, basic laws regarding intention or negligence will need to be rethought. Searching for a solution  In every evolution there are growing pains. But, there are also solutions. In the world of tech, it’s important to put the health of society first and profit second, a fine balancing act in itself. Though solutions remain elusive, there are precautions technology companies can employ. One such precaution is to make tech companies responsible for the actions of their products, whether it is lines of rogue code or keeping a close eye on avoiding the tangled mass of ‘spaghetti’ code which can endanger us or our environment. Want to weigh in on the debate and learn how you can help shape the internet of tomorrow? If you’re interested in Big Data and Analytics, we may have a role for you. Check out our current vacancies. To learn more, contact our UK team at +44 20 8408 6070 or email us at info@harnham.com.