In 1994 Tesco piloted
their Clubcard scheme, then went on to launch it countrywide in 1995 (Humby et
al, 2004 p.14), although loyalty schemes were also being operated by other
retailers Tesco intended to make further use of the data generated as a result
of it.
Safeway had tried
this with their ABC card which they later abandoned and had suffered with the
too much data issue having compared it to “drinking from a fire hose” (Humby et
al, 2004 p.99). This scenario of too
much data was a common theme throughout the research carried out in the
literature review and often led to the use of data mining.
Dataset content
A huge amount of data
was being created as a result of the Clubcard scheme; till transactions broken
down to product level and attributing to the Clubcard holder that made the
purchase (Humby et al, 2004 p.96).
Dataset analysis
Tesco outsourced the
analysis of the data to a company called “Dunnhumby” as they did not possess
the IT skills or infrastructure inhouse (Humby et al, 2004 p.96). In addition technical limitations of the time
meant that Dunnhumby weren’t able to process all of the Tesco data (Humby et
al, 2004 p.97), in fact in excess of 50 million transactions (shopping trips)
were held in the first 3 months of the scheme (Humby et al, 2004 p.96).
Dunnhumby took the
approach of analysing 10% of the collected data and then worked to apply what
had been learnt to the entire dataset (Humby et al, 2004 p.97).
Dataset quality
Errors contained
within data can cause false positives in data mining (Thrasingham, 1999 p.93)
and Dunnhumby encountered this with the Clubcard data having multiple users of
one card, users holding multiple cards (in the case of loss/theft) or even
local issues preventing customers reaching the store for a period of time (Humby
et al, 2004 p.98). However as the data
was collected by Tesco hardware automatically, there was little likelihood of
missing data or inconsistent data issues to be encountered.
Resistances
Whilst the majority
of the Tesco case study talked about positive feedback (Humby et al, 2004
p.116), there were periods during which there were resistances to the
processing of personal data (Humby et al, 2004 p.177). During 1997 there were 20 complaints made to
the Data Protection Registrar (which was the precursor to the Information
Comissioner), these complaints pertained to the use of the data collected for
the clubcard scheme that was subsequently used in a Tesco Personal Finance
mailing campaign (Humby et al, 2004 p.177).
As a result of the complaints and subsequent meetings with the Data
Protection Registrar Tesco revised their practices to not pass details from
clubcard to third parties (Humby et al, 2004 p.179).
Benefits
Tesco realised a
large number of benefits from the Clubcard scheme, with customers feedback
being that the targeted mailings were viewed separate to other commercial
mailings (Humby et al, 2004 p.116).
Tesco were also able
to more accurately target marketing based on customers buying habits and as
such get a higher return, this marketing was coupon based mailing which results
in customers receiving a bespoke combination of coupons based on their buying
patterns (Humby et al, 2004 p.117).
Summary
Tesco encountered
technical issues at the beginning of the club card project, mainly caused by
the technical limitations of the time.
This resulted in them outsourcing the project to a third party, who then
only analysed a small sample.
Tesco encountered
resistance to their sharing of personal data with third party marketers during
the Tesco Personal Finance mailing, although changed their approach to data
sharing and mailing.
Otherwise the Tesco
viewpoint was that the project was hugely successful and well received amongst
its customers.
