Monday, April 14, 2008

Who's Watching You? Tesco To Monitor Millions Of Consumers Around The World

This story should scare you. If it doesn't you need to read Who's Watching You?: The Chilling Truth about the State, Surveillance, and Personal Freedom by Mick Farren and John Gibb.Tesco is to monitor and record the shopping habits of more than 60 million customers around the world in an unprecedented deal with the "Big Brother" company behind its Clubcard loyalty card scheme.The supermarket chain's partnership with Dunnhumby, the market research specialist, is being rolled out to nine countries where Tesco operates, including Thailand, South Korea and China but not, as yet, the United States.

Dunnhumby has worked with Tesco in the UK since Clubcard was introduced in 1995. Analysts claim that its vast database of shopping preferences has been one of the supermarket’s biggest competitive advantages over the past decade.

Every day Dunnhumby crunches data taken from Tesco’s tills to generate a picture of what its 13.5 million Clubcard holders are buying and why they may be switching products.

Discount coupons and promotions are targeted at individuals based on extensive records of their past purchases.

The new agreement is almost certain to spark yet more controversy over Tesco’s power. It already claims nearly £1 of every £7 spent on the high street and is set to report pretax profits of nearly £3 billion on Tuesday. It will now have the potential to map every tendency of a customer base equal in size to the population of the United Kingdom.

Dunnhumby, which is majority owned by Tesco, generates most of its revenue by selling on the data in an anonymous form to some of the world’s biggest companies, such as Coca-Cola and Unilever, to help them to devise marketing campaigns.

Phil Clarke, Tesco’s international director, told The Times: “We’ve never had this level of insight capability before, and this will help us to improve our ranges, make better price investments and run sharper promotions. Dunnhumby will now be working with us almost everywhere we operate.”

Dunnhumby works with 150 businesses, including Littlewoods in the UK and Kroger, the US supermarket chain, and Home Depot, the world’s biggest DIY group. It convinced Tesco to introduce Clubcard after showing how it had managed to generate sales increases of more than 10 per cent in stores where it pinpointed what managers needed to do to win customers and get them to spend more.