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1 secret weapon " dunnhumby, the data mining company is often described as ' Tesco's secret weapon'. We have no doubt that the insight into customer behaviour provided by dunnhumby's loyalty card analysis is one of the key reasons why Tesco has been able to reach the position of dominance it enjoys today." ' dunnhumby - a retailer's secret weapon' Citigroup Global Markets, February 28th 2008

2 Customer data is changing the secrets of competitive success. For companies struggling to navigate their way out of trouble in today's tough economic climate, customer data is the answer. For companies wanting to differentiate themselves from competition - analyse your data. For companies looking for a valid, sustainable strategy that places customers at the heart of decisions - make insight your secret weapon. Data is good for customers, brands and retailers. The story of how customer data can boost the fortunes of companies can be seen in the improving financial results of our three biggest clients since we began working with them. Casino ( trading profit + 7.3% 2008 on 2007), Kroger ( Q4 2008 profits + 8%) and Tesco ( first- half profits 2008 + 11.3%). And contrary to conspiracy theories, data is good news for customers too. From a remarkably innocuous pool of information, ie ' What's in your shopping basket?', we are able to mine insights that help business personalise their offering - from the services they provide, to the marketing messages they send, thus eradicating unwanted junk mail. Moreover, customer data helps companies to identify and thank the most loyal customers. Kroger, Casino and Tesco are creating new standards for loyalty programmes, making the most of their links with individuals to reward loyalty and tailor ranges, prices and promotions to maximum effect, as we'll illustrate in the rest of the chapter. Saying thank you It was Kroger's chief executive, Dave Dillon who first described our work as the secret weapon in fighting Wal- Mart and after many years of losing ground, Kroger has now staged a remarkable recovery. Before dunnhumby and Kroger formed a joint venture in 2003, Kroger was battling Wal- Mart using a Hi- Lo strategy, but it was disadvantaged because it lacked the scale to compete on the same buying terms as its competitor. Instead, following a customer data- driven strategy that targets communication and personalises every element of a store's offer, from range to price to promotions, in order to satisfy customers, has reaped rewards. In Casino's full- year report for 2008, published in March 2009, the French retailer cited: " increasingly effective marketing with dunnhumby" as one of the strategic reasons for its 7.3% any colour you like as long as it's any colour you like