It has conquered the UK retail market and is hungry for more success. Tesco entered the digital market with the recent launch of its Hudl tablet that sold out in two days with 35,000 people snapping up the £119 device – or £60 worth of Clubcard vouchers – and stores are busy restocking to meet demand.
Independent analysts claim the move into a new market is a significant step in Tesco’s data-driven business and will enable the supermarket giant to significantly add to its giant data pool with the behaviour and insights of more than 16m regular loyalty card holders already on its files.
Tesco’s chief marketing officer Matt Atkinson referred to the Hudl launch as about making technology more accessible and experts believe it is largely aimed at first-time tablet users who are naturally less tech-savvy.
Tesco’s e-marketing promotion of the Hudl last week states the tablet “comes with easy access to the Tesco world” as the device has pre-installed widgets for Tesco banking and Blinkbox, the supermarket’s multi-media streaming service.
Matthew Rubin, retail analyst at Verdict, told The Independent: “What the Hudl really gives Tesco is not just what people are buying but how they are buying it. It has the potential to give them locational data and the time spent browsing.
“The Tesco apps are intertwined into the device and it may give them more information than just your credit card details. The long-term potential is great – it’s following the footsteps of Amazon who have been so successful on the back of customer data and insights.”
Steve Parker, MediaVest’s managing director, said Tesco’s multi-channel strategy promised to offer brands more data about customers and new opportunities to develop commercial partnerships.
He told MediaWeek: “Having enjoyed much success with Clubcard, the tablet allows Tesco to take another step towards a more seamless relationship with its customers to deliver information, value and experience.”
Some analysts believe the Clubcard database is potentially more valuable than the caches of information gathered by Google and Facebook.
Sir Terry Leahy, the former Tesco chief executive who built the company into one of the world’s largest retailers, attributed the company’s success to “the ability to focus its effort around the consumer based on the use of data”.
In a speech to business leaders on Thursday he said: “Around the world Clubcard is more famous than Tesco… but not enough companies are showing a mastery of data.”
Barry Collins, editor of PcPro, said: “There are pre-loaded widgets on the tablet that want you to enter your Clubcard details and Tesco accounts, so it could collect data from those, although is that any more or different to the data it would collect if you logged in on your PC and shopped that way?
“In the sense that it could encourage people to shop online more, it may collect more data, but I’m pretty sure it’s not harvesting web surfing habits. All that data is collected by Google, not the hardware vendor.”
Predicting customers’ behaviour and when they are likely to alter their buying habits is big business in itself. Tesco’s customer science company, dunnhumby, which helped launch Clubcard, has now launched “personalisation programme products” to target Tesco customers by email.
Dunnhumby awarded the five-person team who created the product saying “it is a milestone for dh and Tesco”.
Sixty four per cent of organisations worldwide say they are now investing in, or plan to invest in, big data projects, according to research firm Gartner.
James Hoffmann, MD of Square Mile Coffee Roasters, said on his blog that he discovered how an app from Tesco’s coffee shop chain Harris and Hoole improved his drinking experience.
He said: “When you download the app you’re informed you get a free coffee (essentially the digital loyalty card has already been filled once for you). The app asks you what your favourite coffee is. I picked a small, black filter coffee.
“When you arrive at, or near, a location you check in and can send your order to the till – you don’t have to be inside, just close. By the time I got to the ordering point the barista asked if I was James. She then asked if I wanted to use my free drink, which I did. She then told me it was already being made and I could collect it from the second of their two coffee stations. Impressive.
“I don’t know what data they’re collecting. Simply putting a digital, location aware loyalty card in your customer’s pockets yields interesting opportunities. As Harris and Hoole are connected to Tesco I hope they’re doing more with the data. I certainly would want to! Whether we approve or knowingly consent to this data collection is a large, but separate topic.”
A Tesco spokesperson said: “We have strict policies in place to protect customer information and we have never, and will never, sell our customers' data. We do use anonymised sales data to improve the shopping trip for customers and we send out £500m of rewards to Clubcard holders every year - dunnhumby uses this anonymised data to develop insight into how customers shop and it is this insight, not individual customer data, which they may share.
“Hudl is about making tablets more accessible to more people; we do not get any data from it. We already know our customers well through research and what they choose to tell us.”
A spokesperson for dunnhumby did not return calls.
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