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35 For example, Tesco has six broad segments it considers in every management decision - upmarket shoppers, health- focused shoppers, traditional cookers, mainstream families, convenience shoppers and price sensitive shoppers. It also has 17 distinct customer groups which include brand loyals, dieters, calorie loaders, adventurous eaters, promotion junkies, ethical, green and so on. Tesco's Clubcard data helped the retailer reconsider what ranges it would stock in its petrol stations a bit more carefully. Previously, Tesco had left the decision to the local petrol station manager. He or she would take a trolley to the supermarket and decide what products to stock. These decisions could be quite random, one petrol station might be full of car accessories and not much else, and another might have ten varieties of jelly. dunnhumby analysed what kind of products Tesco shoppers tended to buy in its small petrol stations and placed them into three categories. First, Toppers would consist of extras like bread and milk, Impulse Buys would include stuff like chocolate and magazines, while Car Buys would feature items like sponges, de- icer and maps. Using this information as a starting point, Tesco petrol stations were classified in terms of these three categories and restocked accordingly, to ensure they were offering the items that customers really wanted. So what's the right balance between making every store distinctive and right for every individual customer and having an efficient distribution model? Where is the happy medium? Tesco, for example, has around 10 classes of store, such as Metro, Express, Extra and Superstore, to appeal to different clusters of customers. It's a compromise between efficiency, standardisation and personalisation. It's the hardest juggling act for any retailer. But the financial performance of retailers like Casino, Tesco and Kroger suggests that interpreting data strikes a compromise that customers are happy with. The rebirth of modern retail? Go back in history to the birth of modern retail when great retailers like Marks & Spencer, Selfridges and Macy's were first founded. custom experience It's a compromise between efficiency, between standardisation and personalisation

36 At the time, these retailers were able to know each of their customers well. With the birth of the modern supermarkets came the benefits of scale - lower prices, more choice, along with the sacrifice of the customer relationship. The $ 64,000 question is: does being clever about customer data enable retailers to recapture that close customer relationship again? We would argue yes, it does. Because of the scale of retailers today, they need to find new ways of recreating a personal relationship with customers again. Modern technology enables them to do this in an efficient way. One of the most vivid illustrations of how customer data is returning retail to the good old days can be seen with Kroger's commitment to returning lost sets of keys to its customers. The US retailer returns more than 1,000 sets of keys each week, guided by the Kroger Plus card key fobs, which help locate the keys' owners. Kroger issues two key fobs with each Plus card; printed on the back of each fob is the request ' If found, please drop in any mailbox. Postage guaranteed.' There are many different stories of thrilled Kroger customers being reunited with their keys, including the Tennessee fisherman who watched helplessly as his keys sunk into Lake Cumberland. His keys were later snagged by another angler and returned to him via Kroger. Similarly, Tesco Clubcard customers who decide to buy their shopping online for the first time through Tesco. com are helped dramatically by the technology. Everyone knows that the first time you food shop online it can be a nightmare, taking ages to find your favourite products outside the familiar aisles of the local supermarket. Tesco. com can fill an online shopping basket with products based on what the customer has bought during their last four trips to the store. A simple offering that strips hours of hassle and stress from the customer's online shopping experience. This is old- fashioned retailing happening on a mass scale, offering a bespoke experience to valuable customers as well as it possibly can. It's not perfect. It's not the same as the intimate experience a shopper would have in their small, local deli, but it's a modern approach to building customer relationships in today's world. It's showing what personalisation can look like when you're a massive global retailer with millions of shoppers any colour you like as long as it's any colour you like