FROM BIG HAIR TO BIG DATAThe Evolution of the Customer Experience

1989 NOW

WHAT A DIFFERENCE 25 YEARS MAKECan you remember what it was like to go shopping in 1989, when Madonna and Phil Collins topped the pop charts, the new Nintendo Game Boy was a leading Christmas gift and “The Simpsons” sitcom debuted? dunnhumby, the world’s leading customer science company, is celebrating its twenty-fifth anniversary and we’re looking back on what it was like to go shopping in 1989, and how technology trends have enhanced the consumer experience since then.

We’re proud to have been instrumental in enabling so many of these improvements—to make the customer experience so much better. Fire up the dunnhumby wayback machine, and join us in recalling how things used to work, and what has happened since.

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PERSONAL TECHNOLOGY From big and bulky to small and ubiquitous.

1989 was the age of big hair and even bigger technology. If you were important enough to own a cell phone, everyone knew it because you were the one holding a brick-sized box to your ear. It’s important to remember that those phones were not collecting or sharing data—and they sure weren’t connected to the Internet. Other consumer devices were disconnected islands, too. The Sony Walkman on your hip held its own cassette tape, for you alone. You couldn’t watch or download videos—you’d have to visit a record shop to buy music or movies.

Now we live in a world obsessed with the latest gadgets—and all of them are connected. We have the Internet of Things, in which all our personal technologies are interlinked. For consumers, this provides great vision into what is available. But there is also the risk of exposure to too much information.

With consumers at risk of being bombarded from multiple directions, dunnhumby works to distill messages that are unique, relevant and useful to the individual consumer. We have

As for shopping, retailers directed their communications to the scattered masses. If you received something in the mail from your grocery retailer it would be a catalogue of special offers and it might have little or no relevance to your current needs.

used advances in technology to furnish consumers with information they want, where and when they want it. Consider for example offers mailed to consumers who have loyalty cards for a particular retailer. We tailor coupons and promotions through the insight we provide retailers. We’re producing in each market we serve tens of millions of individually targeted mailers (including digitally delivered) to individual households that are personalised and relevant. This includes coupons and promotions for the things that they regularly buy.

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PAYMENT METHODSFrom paper to plastic.

1989 was still the era of personal cheques filled out and signed at the register. Queues in shops would stretch around the block as people took their time scribbling their details out onto cheques before handing them to the cashier as payment. And the wait would get even longer if a manager had to be paged for an approval.

Now debit and credit cards dominate checkout lines, and while cash continues to be a factor, the emergence of contactless payment systems is helping end the lengthy waiting times. For retailers, usage of electronic payment systems is like a website owner tracking which Internet browser visitors are using; it’s an indication of what works well for customers. Watching changing usage trends can help retailers serve customers better.

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SHOPPING CONVENIENCE AND DELIVERYFrom consumer labour to point-and-click.

In 1989, a trip to the grocery store was exhausting. Driving through traffic to reach the shopping centre. Scavenger hunt in the parking lot for a space. Shop. Load up the car and haul heavy grocery bags home.

Now the focus is very much on convenience. We can sit on our sofa and do our weekly or monthly shopping from a considerably wider variety of choices. Online tools help with recommendations for us. The shopping list can be stored for easy electronic access. You don’t even have to get up from the sofa because the retailer can deliver your order straight to your door at a time of your choosing.

Retailers are now gathering insights about customers’ wants and needs so they can improve convenience by extending personalised offers and services that meet shopper needs.

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PRICING AND INVENTORYFrom sticker guns to automatic updates.

In 1989, shop assistants roamed the aisles with “price guns” shooting individual products with their own unique price stickers. They would only know when a product line was low by keeping a close eye on how full the shelves were.

Now retail stores in many parts of the world are using digital price displays. These digital displays update prices automatically and monitor inventory levels, alerting retailers when stocks of certain items are low. The transparency allows retailers to track the rate at which specific goods are selling, and which require restocking and when. And, of course, it saves on stickers.

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PRODUCT SELECTIONFrom strictly groceries to a consumer smorgasbord.

In 1989, your trip to the supermarket would have been for groceries alone. If you needed some blank VCR tapes, that was another stop. A book, or maybe a light bulb, two more stops. And the bank, that was a whole other experience, especially if you had to go during your lunch hour. Running errands was an all-day activity.

Now supermarkets offer a wide selection of goods and services. You can pick up a TV after selecting your favourite brand of butter, book a trip as you stock up on bananas, and even open an individual savings account a few yards from the egg shelves.

Instead of going to different stores for groceries, electronics, books, banking, travel planning and more, the supermarket has become a one-stop destination for a wide range of goods and services in one easy-to-access location. A customer who is in the market for a new TV and sees one at the grocery store at a good price can put it in the shopping cart along with eggs and other groceries.

This is another example of retailers catering to consumers’ wishes for convenience. For retailers, this is an opportunity to improve the customer experience and retain loyal shoppers. Those with reward cards can gain more benefits by purchasing a variety of goods and services through their favourite supermarket. The more retailers have to offer customers, the more the customer is going to return to them.

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OFFERS AND PROMOTIONSFrom the same-old coupons to offers designed for me.

In 1989, shoppers scanned collections of coupon sheets, picked up a scissors and hunted for savings certificates that matched what they needed. Paper cuts and blistered thumbs were rife as many an hour would be spent cutting out paper coupons to redeem at the store. There was no personalisation of coupons. If a retailer had 8 million customers, all 8 million would see the same catalogue of coupons.

Now many people choose to receive their coupons digitally across a wide range of devices which can then also be used to redeem the coupons when at the store. Coupons are targeted to individuals. A consumer who does most of her shopping online, for example, will get promotions for specific items she buys on a regular basis. And coupons arrive straight into the palm of a shopper’s hand via a smartphone.

© dunnhumby 2014

STORE HOURSFrom limited access to all-out convenience.

In 1989, time was of the essence because the shop might close early. If you were running late, or if you’d forgotten ground beef for your spaghetti and meatballs, you would be in danger of ruining dinner if your errand did not comply with the store’s hours.

Now we need not stress over a mere missing ingredient. Today’s retailers can use data to listen to customers. Understanding when customers do their grocery shopping, for example, is essential to understanding their lives, and thus, how best to serve them.

dunnhumby has worked with retailers to cater offers to different consumer segments based on our knowledge of when and where and how they shop. For example, Tesco has developed different store formats across London that offer a mix of goods and services that serve different clientele based on

insights gathered by dunnhumby about shoppers who frequent each location. One location might have more “ready meals” to heat up when the consumer goes home from work; another might offer more value priced goods. These insights make the goods on offer more relevant to the clientele who shop there, and when they are most likely to shop.

We know, for example, that across 18 markets Friday is the most popular day to do “top up shopping” (most popular in Brazil, Ireland, Norway, Poland, Slovakia, the UK and U.S.), followed by

Saturday (tops in Colombia, Hungary, Italy, Malaysia, and Turkey). Other markets (Canada, Czech Republic, France, Korea) prefer Monday or Wednesday, with China preferring Thursdays and Thailand preferring Saturdays and Sundays. The most popular time to replenish staple items? Between 9 a.m. and noon in half of those 18 countries. Best to have high-demand items available early in the day.

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THE CHECKOUT LINEFrom waiting in aisle 4 to self-service speed.

In 1989, we would have queued impatiently so we could be served. The line’s progress would halt as the checkout assistant called for a “price check” over the loudspeaker systems.

Now we serve ourselves. Racing through self-service checkouts is one of the fastest growing trends in retail today. In the UK, for example, self-service checkouts have spread from supermarkets to pharmacies and newsstands. Customer utilisation drives the trend. This is another example of retailers using data to listen to customers.

© dunnhumby 2014

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ORGANISING OUR SHOPPINGFrom disorder to multi-channel personalisation.

In 1989, we remembered what to buy by writing it down. Refrigerator doors were littered with magnets pinching handwritten paper scraps displaying scribbled shopping lists. Reminders to buy toilet paper would be there for all to see on display in our kitchen.

Now we can manage our shopping lists online. Personalised accounts remember what we buy regularly and what we like to treat ourselves with occasionally. The lists save paper (and our sense of modesty). In Korea, for example, approximately 65 percent of consumers maintain shopping lists online. And 63 percent of smartphone users shop through their mobile phones. This multichannel engagement leads to customer loyalty. In general, the more channels a customer uses, the more loyal they are. We also know that multichannel customers spend more on average per month than single-channel customers.

The growth of online shopping brings with it the opportunity to better understand customers and to offer what they need—and to inspire them to find things they didn’t expect. The vast opportunities for improved customer interactions through multiple consumer touchpoints is an area in which dunnhumby has innovated in providing shoppers more value. Retailers have tested online channels for suggesting recipes to interested customers, providing meal suggestions and, if a customer chooses, generating a shopping list for the ingredients in the recipe and having the goods delivered.

© dunnhumby 2014

LEAVING THE STOREFrom hauling our purchases to “click and collect”.

In 1989, selecting your goods for purchase was just the beginning of the end of a shopping trip. After trawling through the aisles you would then have to stand in line for the checkout for what seemed like an eternity (made longer thanks to all those cheque writers).

Now we’re cutting back on queuing time with ‘click and collect’ services. You can now order your shopping online and conveniently visit a collection point at the store on your way home to pick it up. No hoping the item is in stock, no surprises about the price, no long lines at checkout, and no fuss. In many places, a store associate will load the ordered items in your car if needed.

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Thanks for the memoriesWhile some of us may miss those times—the big hair styles, shoulder-padded jackets and recording controls on the VCR—there is a lot to be thankful for with the technologies and insights from customer data that have made shopping more convenient and more profitable for both consumers and retailers. At dunnhumby, we look forward to continuing to use customer science to innovate new ways of listening to shoppers and serving their needs and wants.

© dunnhumby 2014

Illustrations designed and created by Signal Noise

© dunnhumby 2014

THE DUNNHUMBY DIFFERENCEdunnhumby is the world’s leading customer science company. We analyse data and apply insights from more than 660 million shoppers across the globe to create personalised customer experiences in digital, mobile, and retail environments. Our strategic process, proprietary insights, and multichannel media capabilities build loyalty with customers to drive competitive advantage and sustained growth for clients. dunnhumby employs nearly 3,000 experts in offices throughout Europe, Asia, Africa, and the Americas and works with a prestigious group of companies including Tesco, The Kroger Co., Coca-Cola, Macy’s, Procter & Gamble, and PepsiCo.

Contact us at dunnhumby.com today to put the customer at the centre of your business decisions.