Retail 3.0 A Position Paper Series: Paper 1 - Shopper Data

A growing divide is emerging in the retail industry, a divide between two classes of retailers: those that are customer aware, and those that are not. By customer aware we mean those retailers that have some capability to regularly, consistently, and accurately identify shoppers to their transactions.

For too long customer data has been synonymous with loyalty marketing, but this is a misconception. One must separate the means of identifying the shopper to the transaction from whatever marketing initiatives may be enabled by that capability. A loyalty card is simply a way to barcode the shopper, enabling the shopper to be scanned and made part of the transaction record just as any product is. While loyalty cards—with their attendant marketing programs—have been the most prevalent way to identify shoppers, other means of doing so are at hand. Biometrics, RFID cards and tags, mobile phones with near field communication capability, smart cards and others are all proving to be capable shopper identifiers. These new tools, when combined with digital communication channels, open the door to true individualized retail consumer marketing, a quantum leap beyond loyalty marketing.

In the preface to this series we looked at previous power shifts that have occurred in the retail industry: from FMCG manufacturers being the locus of power within the supply chain—Retail 1.0—to that locus shifting to retailers, driven by consolidation and the accumulation of shopper data—Retail 2.0. Retail 3.0 posits the the next shift of industry power to the individual shopper, driven by competition and understanding of shopper value and enabled by technology. Shopperidentified transaction data is the foundation for this next industry movement. Without it retailers will be at a significant disadvantage.