An interesting thought experiment (having spent some time around the Dunnhumby ecosystem) is that if you built it out into a market research/prediction (etc) type agency you could easily double or triple the value (I even know the 10 or so key people they would need to get it moving) - but that's still adjunct size.
As I type this I realise also a lot of the value people assigned to Dunnhumby isn't part of the spinoff, because it was really about the data collection inside the business that improved supply chain efficiency and procurement. It's a lot more valuable for the supermarket business knowing there's a small big significant seasonal pattern in fish finger buying than knowing who is buying and what else they buy.
Thus part of the problem is that the things that add up to "an opportunity so big it's as big as Tesco" (in the UK context, or Walmart in the US context, if you prefer) basically come along once every 5-10 years as new technologies change what can be done. (Boring obvious example, Amazon (e-retailing). All data can do is give you a head start on finding that thing - it doesn't inherently make them any more common as they are a function of a bunch of technological (and possibly other) changes coming together. Much of the rest is more banal improved operational efficiency (which is very valuable overall, but not going to get you on the richest 100 list.
I'm reminded of the introduction of telemetry in cars, which had huge take-up in Italy and lots of people thought was going to revolutionise the car insurance industry. It turned out that actually, bad drivers tend to reveal themselves through claims quite quickly, which makes it very difficult to get a really big gain compared to a straightforward bonus-malus scheme, adjusted for known risk factors of age, car type and gender. Telemetry has been in Italian cars for nearly a decade now, and the only effects seem to be "slightly quicker earning of no-claims bonuses for young drivers", plus "insurance companies get a somewhat earlier heads-up that the latest Peugeot model is a little bit hotter than the competition and has become the car of choice for hoons".
I don’t know if any of this is being put into practice. My last employer sold a telematics product but none of the data ever actually made it to any actuaries
I recently moved from Ontario, where liquor is a government monopoly, to British Columbia, where private sector alternatives coexist with the government system. The private ones all have point cards, and according to one cashier, point theft is a thing? I don't know the mechanism; perhaps people overhear a number read out by a customer in front of them, or perhaps they just guess. I suppose that the payoff is small but the risk is even smaller.
I don't have a point to make, except that data can be corrupted in ways that surprise a naive person like myself.
Seems peculiar; the UK Tesco and Nectar (Sainsburys) cards are tied to an individual, with an address. Tesco will send vouchers to that address. We don't really use Sainsburys enough.
That said, Tesco have fairly recently been discounting certain products to their Clubcard holders, so two different prices on the shelf tag.
In that case, since the Clubcard is basically a QR code, then presenting it at checkout will allow you to claim the discounted price, with any points accruing as normal.
So, if someone has figured out the encoding on the QR code, they're good to go.
Or, they just take a picture of a friend's or neighbour's card on their phone, and present that at the till.
Around lockdown, hardworking NHS staff were offered discounts, on presenting staff ID. Obviously, IDs became valuable due to the discount offered, so the obvious happened.
The way these loyalty cards work is that you present your card (or tell them your card#) at the till as you check out; if you have accumulated enough points, the cashier says something like "oh, you have $10 in your points account, would you like to use it?", and you say "yes", of course. Grocery store cards work the same way.
Hmm, the Sainsbury Nectar card used to work like that at checkout, on presenting/scanning the card, the operator would ask about using the points. My last experience with that was about twenty years ago.
Simply can't remember if you could just tell the operator the number.
I was thinking that there must be something that I'm missing from the description you gave of how the system operates.
So, I was beginning to wonder if I was using national chains as an example, whereas your BC outlets might be local?
Which, if so, I can sort of see how the points theft thing might occur... but.
One of my locals operates this type of scheme, and the landlord does like to change things up (he's on his third on three years, I think). However, it appears that the details of each scheme are heavily dependent on the payment processor he's currently signed up to, the likes of Square fr'instance.
Tesco club card however is free, right? You can take a picture of the bar code and never even install an app. Google wallet makes it a easy to scan multiple cards too.
I can understand the price discrimination effect of charging a price for the consumate shopper with their card number memorized and another for the Spanish kid here on a language learning trip. But does a tesco card really prevents you from getting a Sainsbury one?
you can get cards for all the supermarkets and lots of people do, but even then you will have a points balance which affects your shopping decisions; there's enough there to make it worth investigating for the CMA albeit not such an open and shut case for them to have acted yet.
I laughed at reading "seeing like a supermarket" and made me realize I wanted a publication that was "seeing like a cybernetician" -- that is interpreting the world according to your book. I guess this publication is a first step!
Transaction data is not strictly speaking required to make it work, but essentially for free it improves the performance of targeted advertising on the retail online properties bringing in incremental revenue at 10x the margin.
Related to this is the advice to "shop around", to which I have become increasingly allergic. I like it when the price is the same everywhere and not subject to haggling.
My reading of the Australian situation is that charging higher prices to holders of loyalty cards would be illegal price discrimination. Is that true elsewhere?
Tesco cards are one thing. "Smart" teevees are another. As I understand, manufacturers sell them at or below cost. They are compensated with the data stream coming through on the WiFi, once you've hooked the teevee up at home.
Boringly, generally agree with all that.
An interesting thought experiment (having spent some time around the Dunnhumby ecosystem) is that if you built it out into a market research/prediction (etc) type agency you could easily double or triple the value (I even know the 10 or so key people they would need to get it moving) - but that's still adjunct size.
As I type this I realise also a lot of the value people assigned to Dunnhumby isn't part of the spinoff, because it was really about the data collection inside the business that improved supply chain efficiency and procurement. It's a lot more valuable for the supermarket business knowing there's a small big significant seasonal pattern in fish finger buying than knowing who is buying and what else they buy.
Thus part of the problem is that the things that add up to "an opportunity so big it's as big as Tesco" (in the UK context, or Walmart in the US context, if you prefer) basically come along once every 5-10 years as new technologies change what can be done. (Boring obvious example, Amazon (e-retailing). All data can do is give you a head start on finding that thing - it doesn't inherently make them any more common as they are a function of a bunch of technological (and possibly other) changes coming together. Much of the rest is more banal improved operational efficiency (which is very valuable overall, but not going to get you on the richest 100 list.
I'm reminded of the introduction of telemetry in cars, which had huge take-up in Italy and lots of people thought was going to revolutionise the car insurance industry. It turned out that actually, bad drivers tend to reveal themselves through claims quite quickly, which makes it very difficult to get a really big gain compared to a straightforward bonus-malus scheme, adjusted for known risk factors of age, car type and gender. Telemetry has been in Italian cars for nearly a decade now, and the only effects seem to be "slightly quicker earning of no-claims bonuses for young drivers", plus "insurance companies get a somewhat earlier heads-up that the latest Peugeot model is a little bit hotter than the competition and has become the car of choice for hoons".
So we regret to inform you that Tetlock is Tetlocking again, only this time "AI"-Enabled.
https://arxiv.org/pdf/2402.19379
Lots to pick at here, but I don't have the time to hammer at it .
There’s actually some top research (I should probably read it before I make that judgement) on telematics data, as this survey shows
https://www.sciencedirect.com/science/article/pii/S0167668722000233
I don’t know if any of this is being put into practice. My last employer sold a telematics product but none of the data ever actually made it to any actuaries
I recently moved from Ontario, where liquor is a government monopoly, to British Columbia, where private sector alternatives coexist with the government system. The private ones all have point cards, and according to one cashier, point theft is a thing? I don't know the mechanism; perhaps people overhear a number read out by a customer in front of them, or perhaps they just guess. I suppose that the payoff is small but the risk is even smaller.
I don't have a point to make, except that data can be corrupted in ways that surprise a naive person like myself.
Seems peculiar; the UK Tesco and Nectar (Sainsburys) cards are tied to an individual, with an address. Tesco will send vouchers to that address. We don't really use Sainsburys enough.
That said, Tesco have fairly recently been discounting certain products to their Clubcard holders, so two different prices on the shelf tag.
In that case, since the Clubcard is basically a QR code, then presenting it at checkout will allow you to claim the discounted price, with any points accruing as normal.
So, if someone has figured out the encoding on the QR code, they're good to go.
Or, they just take a picture of a friend's or neighbour's card on their phone, and present that at the till.
Around lockdown, hardworking NHS staff were offered discounts, on presenting staff ID. Obviously, IDs became valuable due to the discount offered, so the obvious happened.
That one made the press.
The way these loyalty cards work is that you present your card (or tell them your card#) at the till as you check out; if you have accumulated enough points, the cashier says something like "oh, you have $10 in your points account, would you like to use it?", and you say "yes", of course. Grocery store cards work the same way.
Hmm, the Sainsbury Nectar card used to work like that at checkout, on presenting/scanning the card, the operator would ask about using the points. My last experience with that was about twenty years ago.
Simply can't remember if you could just tell the operator the number.
Well naturally you have a more advanced form of capitalism than we do in the colonies. (The local paper is literally named "The Times Colonist".)
Ha ha!
I was thinking that there must be something that I'm missing from the description you gave of how the system operates.
So, I was beginning to wonder if I was using national chains as an example, whereas your BC outlets might be local?
Which, if so, I can sort of see how the points theft thing might occur... but.
One of my locals operates this type of scheme, and the landlord does like to change things up (he's on his third on three years, I think). However, it appears that the details of each scheme are heavily dependent on the payment processor he's currently signed up to, the likes of Square fr'instance.
Tesco club card however is free, right? You can take a picture of the bar code and never even install an app. Google wallet makes it a easy to scan multiple cards too.
I can understand the price discrimination effect of charging a price for the consumate shopper with their card number memorized and another for the Spanish kid here on a language learning trip. But does a tesco card really prevents you from getting a Sainsbury one?
you can get cards for all the supermarkets and lots of people do, but even then you will have a points balance which affects your shopping decisions; there's enough there to make it worth investigating for the CMA albeit not such an open and shut case for them to have acted yet.
that's right, didn't think about the vouchers/points which would be a way to tie customers over.
I laughed at reading "seeing like a supermarket" and made me realize I wanted a publication that was "seeing like a cybernetician" -- that is interpreting the world according to your book. I guess this publication is a first step!
This one has been turned on its head with the rise of retail media: https://www.ben-evans.com/benedictevans/2022/3/18/unbundling-advertising
Transaction data is not strictly speaking required to make it work, but essentially for free it improves the performance of targeted advertising on the retail online properties bringing in incremental revenue at 10x the margin.
Related to this is the advice to "shop around", to which I have become increasingly allergic. I like it when the price is the same everywhere and not subject to haggling.
My reading of the Australian situation is that charging higher prices to holders of loyalty cards would be illegal price discrimination. Is that true elsewhere?
I think so, but it's up to the CMA to decide
Tesco cards are one thing. "Smart" teevees are another. As I understand, manufacturers sell them at or below cost. They are compensated with the data stream coming through on the WiFi, once you've hooked the teevee up at home.