Data Capture

Have you been clubbed ?

Your store card gets you discounts. So what's in it for the store ?

Here's a thing or two you might not know about store cards. I know that because every time I get chatting to people over dinner or in a bar, and the topic arises, my disclosures leave them pretty gob-smacked. It occurred to me, then, that the smartest thing about store cards and their ilk is the blanket of stealth or ignorance (call it what you will) beneath which they operate.

But whose advantage ?

The Myth of Loyalty

OK. I don't mean that quite literally. In that Nectar and your Boots card in fact do make you more loyal to those shops or groups of member outlets. But think about this; if many people already get their health goods from Boots and their weekly food shop from Tesco, what does the loyalty card do for them ? It makes them shop there more often and it makes them spend more than they would otherwise. So what ? you might say.

The deal as it's presented to Jo Public runs something like this; You buy more and the shop gives you a (slightly or significantly) larger discount than you'd get if you bought less. A fair deal ? For sure. 

But that's not the thing......

The thing (the really clever thing) is that the store-card doesn't stop there. The idea that loyalty is the primer behind Clubcard and it's friends is the myth in all this. Because the real holy grail for the shop is data. Your data. That's what it's all about. And they ain't uttering one word about it now are they ? I wonder why?

Here's what gives; using EPOS (electronic point-of-sale technology) and having got you to willingly hand over your name, address, phone number and "permission" when you initially signed up for the card, the company behind the store can sit back and watch clever computers build an entire profile of you and your life. Your daily behaviour. Your likes and dislikes. Your extra marital activities (I'm perfectly serious), and so on. It's like Crimewatch profiling those criminals  but much more complete and intrusive.

In the business we call it "data-mining".

Each time they scan your card for the big shop it's you telling them that you're shopping for a hubby and two kids. That you prefer white wine and microwave meals. That you do in fact cook a good roast on a Sunday. That you have guests round occasionally. That your house has a small garden. That one of your kids is a girl in year ten. That you take a family holiday twice a year, usually for a fortnight ski-ing in January and somewhere sunny in August. And that when you're away on business once a month the old man get's the bit on the side round for the night.

Come again ? Well, besides sun tan lotion, ski goggles, baking flour, trowels and seeds, school diaries and a few bottles of pinot, let's just say that your Iain Banks travel reads for the flight, new make-up for the power meetings followed in a few days by a drop-off in your Radox bath soak and scented candles, coincide nicely with romantic flowers and chocolates, a new man's shirt and aftershave and a distinct absence of the weekly six pack of beers synonymous with couch potato syndrome. And a little sexy number from the lingerie department. He clearly knows what he's doing.

You're calling home from your business trip at nine every night. Tucked in to your executive suite in the South of France (Tesco Mobile) but he's got the patter all prepared and everything's as it should be. In fact he appears to be putting a deposit down on a little cottage in the Cotswolds (Tesco Finance) but maybe you're not in on that particular project. No worries, the computer simply flags up a divorce in the making and a Do-It-Yourself divorce pack is already winging it's way to your other half in the post courtesy of the Tesco Legal Store.

How's that store card looking right now ? Still friends with it ?

The third party company that managed Tesco data from the early days, Dunn Humby, soon came to realise it was rather powerful in terms of the demographic and behaviour profiling it was holding on pretty much a sizeable chunk of the British public. Old Soviet block dictatorships had nothing on this, I like to think. Tesco came in and bought a chunk of the operation. It couldn't very well have Dunn Humby going it's own way with all that juice on it's computer servers, now could it ?

The point is that "data capture" is, and has been for some time, the chief driver of behaviour of the "loyalty card" variety. So much so that the concept of "loyalty" as the project header is misleading at best, and a sham at worst.

This blog is about advertising, and where advertising crosses the line of moral acceptability. At first one might think that all this talk of data capture is a bit of a digression. But hopefully now you can see that in actual fact, data collation of this ilk is really a very clever guise of the classic ad man. It is in fact advertising in reverse. Rather than the traditional method, whereby shops advertise their wares, here we have customers advertising their future needs, so to speak. If you ever considered that Tesco et al getting you to do your own packing, cutting down on till staff and no doubt pocketing the wages savings is a blend of mischief and subtle ingenuity, then know that they are also getting customers to do their own advertising these days. Each time you purchase skin cream, cleansing balm and make-up remover you are effectively sticking your hand up and shouting "Talk to me about health and beauty products! I'm a buyer!" Thanks to store cards, they have all they need to know and your in-depth profile is ever increasing in size and sophistication.

You got a pay rise, a baby on the way or an au pair in residence ? Guess who knows ? It's all in the data. Oh it's just beautiful.

I used to work for a large British data company where everything was done by the book and above board. So I'm not talking about cowboys. Having collected and cleaned the data (people's emails, age, location, marital status, income bracket, choice of car etc), I could often "rent" or "sell" that same data onto third party companies who could target the people on the lists about buying their products too. If I ran an online mechanic getting people to tell me just three things in order to enter a competition to win an iPod, and those three things were email address, their phone network and the date of expiry of their phone contract, and say if I got permission to sell on this data, by making it a condition of entry to win the prize that you ticked the "yes" box where permission was sought, I could then collate all the (let's say) O2 contract holders whose deals expire in the next three months, and I could sell them to, for example, Vodafone. 

Data isn't about loyalty. It is gold in it's own right. I speak from experience in the field.

Writer's Eye View; The Whitbread Group's Costa Coffee is getting in on the act. This is Sunday 7th March in The Lowry Outlet, Salford Quays, near Manchester. The Coffee Club roll-out is in full swing.

Laws do exist to ensure that each person on such a list has given their "permission" to be contacted, but I have used quotes marks over that word because it's not permission in the real sense. It's often awarded unwittingly by the individual in the small print T&C's (Terms and Conditions) that internet users will usually skim or skip over before clicking the "yes" or "opt-in" box. Or permission is acquired venally (see how it was won in the above "win an iPod!" competition two paragraphs back).

Tesco, as far as I'm aware, don't sell your data onto third party companies. They keep it for themselves. But if you've got a weight problem say, and the Clubcard's giving them the whole story so they'll know this, then it doesn't matter whether they're contacting you (by email, post, text etc) with double points for diet products or double points for cream cakes, the point is they know your weak spots and they're hitting you with them for the up-sell.

You have, by now, submitted control.

Tesco is looking at launching a new high street bank this year. It already sells finance, petrol, mobile phone services and a whole range of other stuff besides most groceries. Much like Whitbread PLC which owns Costa Coffee (the above photo) and is also the UK's largest hotel and restaurant company. Although they don't sell your data on, they are free to pass it within the group and given their diversity and size it amounts to the same thing. Your data will be seen and used advantageously by commercial operations much removed from the original service which gleaned the information from you. 

I possess, in sum total, a Nero's coffee shop card and a Waterstone's card. One is data free, ie it's non-membership oriented, and the other is, in essence, for a one-line product outlet (books, obviously). So I don't get too pestered or feel that my privacy, integrity and control is being compromised too much. But the point is that I am making an informed decision. I'm going in with my eyes wide open. That's just because I happen to have worked in the industry. For most shoppers, however, the wool is being pulled. Loyal shoppers are blinded with the smoke and mirrors of "loyalty cards" where they are really anything but. And moreover, they don't even know it.

Supermarkets famously place fresh fruit and veg back-lit with green lights at the entrance point to their stores to create a fresh wholesome impression, and pipe the smell of baked bread through the store, putting "pester power" kids sweets at kid's eye level at the check-out (where kids, like everyone else, have to stand still and wait), and alcohol at the back or far aisle (dedicated drinkers may nip in for the odd bottle but end up checking out with a tasty gamut of fayre having had to walk through most aisles to reach the booze).

Most of us knew about these time-honoured successful tricks of the trade. But loyalty cards are a pretty novel genre, so just think on. They can be a real bargain but the cost of them isn't always what you'd think. The cost is more than loyalty. It's privacy. It's manipulation of the information brought to light when that privacy is flouted and it's all this without your knowledge. Well you know what they say about the truth. Every little helps. 

I have run predominantly with Tesco in the illustrations above but the argument applies to most big-box discount stores and hypermarkets, nationwide chains and household names. The wider the range of products they sell, the deeper the data they can mine and the more intrusive and manipulative they can be. I shop often in Tesco but I don't carry a Clubcard, simply for all of these reasons.

Data capture is as stealthy as land banking*. Personally, I have lots of respect for the marketing genius of these key players. I am a marketer after all. It has been my career and it will be so again, I'm sure. There is intellectual fulfilment in the laws of marketing and it's application. But I'm also a public champion with a vision of transparency. Academic intellect is one thing. But sometimes advertising crosses a line.

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* Big stores are known to buy all surplus land in a town when they build their superstore, thereby preventing competitor stores opening nearby. Tesco was alleged to have refused to yield on this strategy even when local government bodies needed the land in question for schools and local amenities.