WOOLWORTHS has opened up a new front in the war over customer data by making a strategic acquisition that will allow it to better analyse the shopping habits of Australians beyond its customer base.
Australia’s largest retailer has outlaid at least $20 million for a 50 per stake non-controlling stake in data analytics company Quantium from employee shareholders. Three of Woolworths’ most senior executives – finance director Tom Pockett, supermarkets managing director Tjeerd Jegen and head of logistics and multi-channel retailing, Penny Winn – will join the Quantium board.
Woolworths plans to double the size of its customer analytics team, based at its Norwest headquarters, and will use Quantium’s data, analytical, media and software services to boost its existing customer analytics capabilities.
In turn, Quantium will be able to tap Woolworths’ de-identified customer data, gleaned from its Everyday Rewards customer loyalty cards, credit and debit cards, to improve services to a wide range of clients including eBay, IAG, Telstra, Suncorp and Qantas.
Customer analytics and ‘big data’ is emerging as a new front in the battle for market share between Woolworths and Coles,which relaunched its customer loyalty scheme, FlyBuys, a year ago and has hired a team of customer loyalty experts from the UK to augment its local expertise.
Big data involves collecting and organising vast quantities of seemingly disparate information. By using smart algorithms and high-speed technology to sift through the data, unexpected and valuable patterns emerge.
Coles has used information gleaned from big data to pick the best locations to build expensive supermarkets. Some US retailers, such as Target, now determine when customers are pregnant based on their shopping baskets before sending them personalised catalogues.
“This is the most exciting development in our business and will help to further seed the business’s growth and development,” said Quantium director Tony Davis, who founded the company 10 years ago with partners Greg Schneider and Adam Driussi.
“It’s a further development of a long relationship we have had with Woolworths,” Mr Davis told The Australian Financial Review.
“For a number of years we have been providing them with a range of services and insights to help their business performance – general insights into understanding what customers want,” he said.
The equity stake in Quantium reflects Woolworths chief executive Grant O’Brien’s strategy to put in place enablers for a new era of growth at the retailer by using customer insights to tailor its product range and come up with more effective promotions and marketing programs.
Woolworths already has 8 million members of its Everyday Rewards customer loyalty program in Australia and New Zealand.
Emily Amos, head of customer insights at Woolworths, said the investment would help Woolworths leverage its Everyday Rewards data to deliver better stores, range and prices for customers.
Ms Amos said the investment was not material to Woolworths and it built on the relationship it have had with Quantium in recent years. The companies will remain separate businesses, with Quantium taking over management of around 20 Woolworths employees.
